Buy ZF Commercial Vehicle Control System with Target Price of Rs. 12,160 : ICICI Direct

ZF Commercial Vehicle Control System (ZFCV) Outlook

The company operates under the ZF WABCO brand and is the market leader in conventional brake products, advanced brake systems and other air-assisted related technologies in India. Additionally, the company is also known for providing software development services.

The current market price of ZFVCS is Rs. 10,175, and the market capitalization of the stock is Rs. 19,292 Crores. The stock is on strong momentum and can potentially exceed the target of Rs. 12,160 according to ICICI Direct’s report.

Current valuation and business outlook

Current valuation and business outlook

According to reports from ICICI Direct, “ZF Commercial Vehicle Control Systems India (ZFCV) (formerly Wabco India), now part of the ZF Group, is the market leader in CV braking and a complete solution provider focused on technology”.

Further on the valuation, the report states, “With FY22 being the first year of the bull cycle, significant double-digit M&HCV volume growth is expected in FY23, FY24, industry volumes expected to exceed their FY2019 peak at some point in FY25.”

Buy Call of ICICI Direct on ZFCV

Buy Call of ICICI Direct on ZFCV

“ZFCV share price increased by around 12% CAGR from Rs. 5,640 in September 2017, outperforming the Nifty Auto index during this period with advanced technologies supporting its quest for increased content/vehicle reads the report decoding their call for purchase Summarizing the report in one sentence with the ICICI report’s header, “New Technology Offerings to Drive Industry-Leading Growth.”

Main triggers for a good performance of the title in the near future

Main triggers for a good performance of the title in the near future

There are two key triggers mentioned in the ICICI Direct. The report says,

• “Amid a cyclical recovery, we built a CAGR of around 29.8% of sales in fiscal years 22-24E.
• With potential kit value set at ~3x from current levels of ~| 45,000-48,000/unit, along with cooling input costs and offering premium products, margins are expected to hit the 15% mark by FY24E.”