Here is the complete details about the small cap monopoly stock and that’s comes from Auto ancillary industry.
This company is from small cap, and it’s the monopoly as it’s maintaining 80% of the market share in it’s industry. Also this company is working on futuristic Technology for Electric vehicles by using AI & ML. what else we need more than this to invest in this stock. it’s fantabulous stock. but no need to worry, we’ll go through the complete details of stock and we’ll try to build the conviction by analysing the stock in several parameters.
Due to pandemic and auto sector slow down, this stock currently trading at attractive valuations as well the business is interesting. as auto sector started recovering, there is big opportunity for this stock to get blast off as it’s comes auto ancillary industry. The stock name is WABCO India Ltd. here we’ll discuss in detail about this stock.
Company Overview :
Wabco India Ltd is the subsidiary of WABCO holdings, that’s based out of USA. In may 2020, ZF acquired entire WABCO holdings. This company is into the business of commercial vehicle solutions such as majorly Safety, Efficiency and Connectivity.
This small cap monopoly stock company provides software integrated braking solutions as it’s adopting the latest technology and creating most advanced safety solutions. in the braking systems their pioneered products are like PAN air disc brake and etc. these advanced braking solutions are available for Trucks, Tailers, Car, Bus and Off shore highway vehicles. WABCO India is the market leader in this segment as it’s holding more than 80% of market share.
Wabco India Ltd is not only working on advanced software integrated braking systems, but also it’s working on the connectivity solutions and efficiency solutions for the commercial vehicles. coming to the connectivity solutions this company is working on, to improve their operational efficiency, delivering advanced technologies and cloud based applications that ensure vehicles can be operated, managed, serviced and supported in the field wherever their location.
Coming to the Efficiency solutions, this company providing engineering solutions to lower vehicle weight, optimize energy usage, recovery of energy, to improve fuel management, reduce emissions and to save operational costs. these solutions is all about to improve the vehicle efficiency and to decrease the operational costs to the owners. Wabco India provides these solutions across the industries.
As all above solutions that are providing by the company are futuristic, and also works with electric vehicles. as the braking solutions, connectivity solutions and efficiency solutions are most important for the electric vehicles. So we can also play with the EV theme by investing into this stock. and most importantly all the solutions that are company providing are based out of advanced technology integrated solutions, build by AI & ML.
Clients of Wabco India :
As this company providing futuristic and AI & ML integrated solutions, there is acceptance and huge demand was there for this company’s products. and this company has a cash rich, renowned and very strong companies in their portfolio, such as TATA Motors, Ashok Leyland, Tafe Tractors, Volvo, Force Motors, M&M, TATA Cummins, Eicher Motors, Swaraz Mazda, Bharat Earthmovers and etc.
Product Portfolio of the small cap monopoly stock:
Financials :
Wabco India Ltd is a small cap monopoly stock company as it’s having Rs .14500 cr market cap. This company is a very strong company both fundamentally and financially as it’s a debt free company. and this company is able to generate positive cash flows from it’s operations. except covid, this compnay done a decent job, as it’s delivered good profits and revenues. if look at the return ratios of the company based on the last 5 years average, the ROE is 11.8%, ROCE is 16.9% and the net profit margin is 4.84%. if you look at the share holding pattern, Promoters are holding 75%, FIIs are holding 0.67% and DIIs are holding 16.2%. This stock has been delivered 35.87% of returns over the last five years and the stock is currently trading at Rs. 7695.
Pros :
1. Expecting good quarter results
2. DIIs are continuously accumulating the stock
3. Continuous growth in both profits and revenues except covid pandemic time
Cons :
1. Cash conversion cycle was increased from 84 to 114 days.
2. Company has been delivered poor performance over the last five years
Conclusion :
Wabco India Ltd has continued focus on delivering AI & ML technology integrated solutions to the OEMs which are futuristic and these solutions are also works with Electronic vehicles. so that’s what interesting buzz currently running on the company. as it was consolidated in the current levels from last five years. as it’s the small cap monopoly stock and slowly auto sector is recovering, every one expecting good quarter results ahead. if it happens so then we can see a great rally in this company. once this company crosses the 8000 levels, then no one can stop this stock. Also we can hold this stock for long term as this company driving on the futuristic and technology based solutions.
Disclaimer : The above all recommendations are from the individuals, working for ICICI Securities. please do your own research before investing else take an advice from your financial advisor.