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ICICI Securities Report
ZF Commercial Vehicle Control Systems Ltd.'s operational performance was in-line with our estimate, with Ebitda at Rs 1.46 billion versus our estimate of Rs 1.5 billion (+ 35% YoY).
Original equipment manufacturer/export/aftermarket segments' revenues came in at Rs 4.5 billion/Rs 3.2 billion/Rs 1.2 billion, up ~29%/~23%/~15% YoY, driving overall revenue by 25% YoY. Ebitdam was at 14.7% (flat QoQ) and ZF Commercial Vehicle is planning to improve Ebitdam led by improving mix (of better margin new generation components at the cost of lower margin commoditised products), improving productivity and better cost pass through.
We are building in ~24% revenue compound annual growth rate for FY23-25E with mean Ebitdam of ~16%.
Maintain 'Hold' with a revised discounted cash flow -based target price of Rs 14,903 (earlier Rs 12,810), implying 45 times FY25E earning per share.
Change in target price led by higher earnings in FY25E and rollover by a quarter.
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