fce wabco india 10jun16

7/26/2019 Fce Wabco India 10jun16

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Document code: FOTL_090620164_4 Copyright 2016 Firstobject Technologies Ltd. All rights reserved

WABCO INDIA LTDResult Update (PARENT BASIS): Q4 FY16

CMP: 5686.00 JUNE 9th

, 2016

Overweight ISIN: INE342J01019

Index Details SYNOPSIS

Wabco India Limited designs, manufactures and

markets conventional braking products, advancedbraking systems, and other related air assisted

products and systems.

Revenue for the quarter rose by 47.84% to Rs.

5665.19 million from Rs. 3831.97 million, when

compared with the prior year period.

During the quarter, EBIDTA is Rs. 907.49 million

as against Rs. 622.64 million in the corresponding

period of the previous year.

During Q4 FY16, the companys net profit jumps to

Rs. 572.86 million from Rs. 303.98 million in the

corresponding quarter ending of previous year, an

increase of 88.45%.

During Q4 FY16, Profit before tax stood at Rs.

759.26 million against Rs. 5000.03 million in Q4

FY15.

EPS of the company stood at Rs. 30.20 during the

quarter, as against Rs. 16.03 per share over previous

year period.

The company has recommended a dividend of Rs.6/- per share, i.e. 120% for the year ended March

31, 2016.

During the FY2015-16, revenues stood at Rs.

18382.71 million as against Rs. 13479.63 million in

FY2014-15.

PAT was at Rs. 2046.17 million in FY16 as

compared to Rs. 1206.60 million in FY15.

Net sales and PAT of the company are expected to

grow at a CAGR of 23% and 29% over 2015 to2018E respectively.

Stock Data

Sector Auto Parts & EquipmentBSE Code 533023

Face Value 5.00

52wk. High / Low (Rs.) 7449.00/5172.00

Volume (2wk. Avg.) 579

Market Cap (Rs. in mn.) 107852.05

Annual Estimated Results(A*: Actual / E*: Estimated)

YEARS FY16A FY17E FY18E

Net Sales 18382.71 22059.25 25368.14

EBITDA 3275.50 4180.49 4899.19

Net Profit 2046.17 2750.51 3249.97

EPS 107.87 145.01 171.34

P/E 52.71 39.21 33.19

Shareholding Pattern (%)

As on Mar 2016 As on Dec 2015

Promoter 75.00 75.00

Public 25.00 25.00

Others -- --

1 Year Comparative Graph

WABCO INDIA LTD S&P BSE SENSEX

PEER GROUPS CMP MARKET CAP EPS P/E (X) P/BV(X) DIVIDEND

Company Name (Rs.) Rs. in mn. (Rs.) Ratio Ratio (%)

Wabco India Ltd 5686.00 107852.05 107.87 52.71 10.23 120.00

Federal-Mogul Goetze Ltd 336.40 18703.50 7.91 42.50 3.78 0.00

Minda Industries Ltd 1190.00 18863.90 50.04 23.76 4.21 70.00

Amara Raja Batteries Ltd 847.50 144106.00 28.65 29.45 6.58 425.00


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QUARTERLY HIGHLIGHTS (PARENT BASIS)

Results updates- Q4 FY16,

Months Mar-16 Mar-15 % Change

Revenue 5665.19 3831.97 47.84

Net Profit 572.86 303.98 88.45

EPS 30.20 16.03 88.45

EBIDTA 907.49 622.64 45.75

Revenue for the quarter rose by 47.84% to Rs. 5665.19 million from Rs. 3831.97 million, when compared with the prior

year period. EBIDTA is Rs. 907.49 million as against Rs. 622.64 million in the corresponding period of the previous yearThe companys net profit jumps to Rs. 572.86 million from Rs. 303.98 million in the corresponding quarter ending o

previous year, an increase of 88.45%. Reported earnings per share of the company stood at Rs. 30.20 during the quarter

as against Rs. 16.03 per share over previous year period.

Break up of Expenditure

Break up of

Expenditure

Value in Rs. Million

Q4 FY16 Q4 FY15%

Change

Cost of Materialsconsumed

3811.15 2224.78 71%

Employee benefits

expenses

466.95 394.03 19%

Depreciation andamortisation expenses

146.71 120.91 21%

Other expenses 913.22 594.01 54%


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COMPANY PROFILE

WABCO INDIA LIMITED was established in 1962. The company was formerly known as WABCO-TVS

(INDIA) Limited and changed its name to WABCO India Limited in August 2011. WABCO India Limited is a

subsidiary of WABCO Asia Private Limited. WABCO INDIA designs, manufactures and markets conventional

braking products, advanced braking systems, and other related air assisted products and systems. The company

has grown significantly in the Indian commercial vehicle market. WABCO INDIA serves its aftermarke

customers through a wide national distribution network. With five world-class manufacturing facilities,

software design center and a test track in India, WABCO INDIA excels in engineering and manufacturing.

With its outstanding engineering and manufacturing capabilities and local sourcing network, WABCO INDIA

designs, manufactures and markets conventional braking products, advanced braking systems and other related

air-assisted products and systems, directly serving customers locally and through WABCO internationally.


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FINANCIAL HIGHLIGHT (PARENT BASIS) (A*- Actual, E* -Estimations & Rs. In Millions)

Balance Sheet as of March 31, 2015 -2018E

FY15A FY16A FY17E FY18E

SOURCES OF FUNDS

Shareholder's Funds

Share Capital 94.84 94.84 94.84 94.84

Reserves and Surplus 8535.54 10444.72 13195.23 16445.20

1. Sub Total - Net worth 8630.38 10539.56 13290.07 16540.04

Non Current Liabilities

Deferred Tax Liabilities [Net] 164.52 99.38 69.57 55.65

Other Long Term Liabilities 0.30 0.30 0.32 0.35

Long Term Provisions 187.19 192.47 200.17 210.182. Sub Total - Non Current Liabilities 352.01 292.15 270.05 266.18

Current Liabilities

Trade Payables 1779.00 3463.58 4779.75 5974.69

Other Current Liabilities 233.15 760.61 1133.31 1439.30

Short Term Provisions 140.25 184.68 221.62 252.64

3. Sub Total - Current Liabilities 2152.40 4408.87 6134.67 7666.63

Total Liabilities (1+2+3) 11134.79 15240.58 19694.79 24472.85

APPLICATION OF FUNDS

Non-Current Assets

a) Fixed Assets 3413.70 3732.68 4105.95 4311.25

b) Non-current investments 22.02 22.02 22.24 22.69

c) Long Term Loans and Advances 229.18 342.10 427.63 508.87

1. Sub Total - Non Current Assets 3664.90 4096.80 4555.81 4842.80

Current Assets

Current Investments 370.00 2180.00 3876.30 4980.43

Inventories 1179.70 1756.37 2318.41 3268.96

Trade receivables 2991.51 4357.27 6100.18 8418.25

Cash and Bank Balances 2230.51 2130.36 2066.45 2107.78

Short-terms loans & advances 681.26 705.82 762.29 838.51

Other current assets 16.91 13.96 15.36 16.12

2. Sub Total - Current Assets 7469.89 11143.78 15138.98 19630.05

Total Assets (1+2) 11134.79 15240.58 19694.79 24472.85


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Annual Profit & Loss Statement for the period of 2015 to 2018E

Value(Rs.in.mn) FY15A FY16A FY17E FY18E

Description 12m 12m 12m 12m

Net Sales 13479.63 18382.71 22059.25 25368.14

Other Income 202.99 346.10 432.63 510.50Total Income 13682.62 18728.81 22491.87 25878.63

Expenditure -11446.09 -15453.31 -18311.38 -20979.45

Operating Profit 2236.53 3275.50 4180.49 4899.19

Interest -3.61 -1.52 -1.60 -1.76

Gross profit 2232.92 3273.98 4178.90 4897.43

Depreciation -466.64 -562.37 -629.85 -673.94

Profit Before Tax 1766.28 2711.61 3549.04 4223.49

Tax -559.68 -665.45 -798.53 -973.51Net Profit 1206.60 2046.17 2750.51 3249.97

Equity capital 94.84 94.84 94.84 94.84

Reserves 8535.54 10444.72 13195.23 16445.20

Face value 5.00 5.00 5.00 5.00

EPS 63.61 107.87 145.01 171.34

Quarterly Profit & Loss Statement for the period of 30th

Sep, 2015 to 30th

June, 2016E

Value(Rs.in.mn) 30-Sep-15 31-Dec-15 31-Mar-16 30-Jun-16E

Description 3m 3m 3m 3m

Net sales 4289.19 4577.97 5665.19 5778.49

Other income 91.79 60.60 102.09 110.26

Total Income 4380.98 4638.57 5767.28 5888.75

Expenditure -3637.76 -3801.40 -4859.79 -4793.26

Operating profit 743.22 837.17 907.49 1095.49

Interest 0.00 0.00 -1.52 -0.03

Gross profit 743.22 837.17 905.97 1095.46

Depreciation -139.48 -142.03 -146.71 -154.05

Profit Before Tax 603.74 695.14 759.26 941.41

Tax -120.63 -179.90 -186.40 -284.78

Net Profit 483.11 515.24 572.86 656.64

Equity capital 94.84 94.84 94.84 94.84

Face value 5.00 5.00 5.00 5.00

EPS 25.47 27.16 30.20 34.62


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Ratio Analysis

Particulars FY15A FY16A FY17E FY18E

EPS (Rs.) 63.61 107.87 145.01 171.34

EBITDA Margin (%) 16.59 17.82 18.95 19.31

PBT Margin (%) 13.10 14.75 16.09 16.65

PAT Margin (%) 8.95 11.13 12.47 12.81

P/E Ratio (x) 89.39 52.71 39.21 33.19

ROE (%) 13.98 19.41 20.70 19.65

ROCE (%) 31.32 36.41 36.20 33.69

Debt Equity Ratio 0.00 0.00 0.00 0.00

EV/EBITDA (x) 47.06 31.61 24.38 20.57

Book Value (Rs.) 455.00 555.65 700.66 872.00

P/BV 12.50 10.23 8.12 6.52

Charts


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OUTLOOK AND CONCLUSION

At the current market price ofRs.5686.00, the stock P/E ratio is at 39.21 x FY17E and 33.19 x FY18E respectively.

Earning per share (EPS) of the company for the earnings for FY17E and FY18E is seen at Rs. 145.01 and Rs. 171.34

respectively.

Net sales and PAT of the company are expected to grow at a CAGR of 23% and 29% over 2015 to 2018E

respectively.

On the basis of EV/EBITDA, the stock trades at 24.38 x for FY17E and 20.57 x for FY18E.

Price to Book Value of the stock is expected to be at 8.12 x and 6.52 x for FY17E and FY18E respectively.

Hence, we say that, we are Overweight in this particular scrip for Medium term investment.

INDUSTRY OVERVIEW

The Indian auto-components industry has experienced healthy growth over the last few years. Some of the factors

attributable to this include: a buoyant end-user market, improved consumer sentiment and return of adequate liquidity in

the financial system. The auto-components industry accounts for almost seven per cent of Indias Gross Domestic Product

(GDP) and employs as many as 19 million people, both directly and indirectly. A stable government framework, increased

purchasing power, large domestic market, and an everincreasing development in infrastructure have made India a

favourable destination for investment.

The Indian auto-components industry can be broadly classified into the organised and unorganised sectors. The organised

sector caters to the Original Equipment Manufacturers (OEMs) and consists of high-value precision instruments while the

unorganised sector comprises low-valued products and caters mostly to the aftermarket category. Over the last decade, the

automotive components industry has scaled three times to US$ 40 billion in 2015 while exports have grown even faster to

US$ 11 billion. This has been driven by strong growth in the domestic market and increasing globalisation (including

exports) of several Indian suppliers.

According to the Automotive Component Manufacturers Association of India (ACMA), the Indian auto-components

industry is expected to register a turnover of US$ 100 billion by 2020 backed by strong exports ranging between US$ 80-

US$ 100 billion by 2026, from the current US$ 11.2 billion.

Outlook

The rapidly globalising world is opening up newer avenues for the transportation industry, especially while it makes a

shift towards electric, electronic and hybrid cars, which are deemed more efficient, safe and reliable modes of


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transportation. Over the next decade, this will lead to newer verticals and opportunities for auto-component

manufacturers, who would need to adapt to the change via systematic research and development.

The Indian auto-components industry is set to become the third largest in the world by 2025. Indian auto-component

makers are well positioned to benefit from the globalisation of the sector as exports potential could be increased by up to

four times to US$ 40 billion by 2020.


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Name of the Analyst Qualifications

Sectors

Covered

Exposure/Interest tocompany/sector Under

Coverage in the CurrentReport

Dr.C.V.S.L. Kameswari M.Sc, PGDCA,M.B.A,Ph.D (Finance)

Pharma &Diversified

No Interest/ Exposure

U. Janaki Rao M.B.A CapitalGoods


B. Anil Kumar M.B.A Auto, IT &FMCG


G. Amarender M.B.A Diversified No Interest/ Exposure

M. Vijay M.B.A Diversified No Interest/ Exposure

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10/11


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Document code: FOTL 090620164 4 Copyright 2016 Firstobject Technologies Ltd All rights reserved

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fce wabco india 10jun16

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