Wabco India

Wabco India is a market leader with a 85% market share in conventional braking products, advanced braking systems and other related air-assisted products and systems. An auto component company, it posted a not-so-good set of numbers for Q2FY15. Net sales rose 18% (YoY) at Rs.304 crore and operating expense as a percentage of total income rose from 86% to 88%. Net profit for the quarter was at Rs.31 crore, up 7% though for H1FY15, net profit at Rs.62 crore was down 3%. NPM, which is amongst the best in the sector fell from 11.28% to 10.20%.

The company has a small equity at Rs.9.48 crore and is virtually debt free. Reserve stands at a healthy Rs.746 crore. Going ahead, for this market leader, success hinges on two aspects – firstly an uptick in auto sector which will automatically boost demand. Secondly, its biggest trigger would be the successful implementation of compulsory ABS (anti-lock braking system), which has been made mandatory in commercial vehicles, starting 1st April 2015. This in itself would give a major spurt in the company’s income in the coming months.