WABCO INDIA
Changing the Indian commercial vehicles safety standards.
WABCO INDIA is a company owned by Mr. Warren Buffet making Automatic Manual Transmission System(AMT), ABS and Commercial Vehicles New Generation suspension system.
We recommend the stock due to the following strong reasons:
1. It is a Warren Buffet company in new technological areas of automotive parts like AMT, ABS and new generation suspension system for commercial vehicles.
2. At present in India, safety features like AMT and ABS are very rarely used and no body wants to incur extra cost of Rs. 1-2 lakhs on these features which can prevent accidents on the highways. Hence, we are buying this stock when there is no extra demand in the market.
3. Central Govt. is going to implement ABS compulsory w.e.f. 1st April,2015 and Tata Motors is going to provide AMT in all its trucks and commercial vehicles. These safety features will become compulsory in 1-2 years time and demand for these products will increase manifold.
4. WABCO INDIA is having monopoly in these products and it will be difficult for any new entrant to come in the market in near future.
5. Parent company is going to make India a sourcing hub for supplying it to other countries and hence in future there will be a lot of export of these products from WABCO.
6. At present total commercial vehicle sale is 8 lakhs per year which is likely to increase to 14 lakhs by 2019. Imagine if Rs. 1 lakh worth of ABS, AMT is on one vehicle, 5 years later WABCO can increase its sale by Rs. 6000-7000 crores( 50% market share on 14 lakhs vehicles at 1 lakh per vehicle). It can give additional profit of Rs.700-1000 crores per year to WABCO after 5 years. These projections are on the conservative side and real picture may be better.
7. The stock will command high PE in next 5 years also because there will be lot of excitement, glamour and feeling of safety amongst investors with this stock. Whenever a new game changing product is introduced in the market, the real commercial value is realized after 5-10 years( take the example of internet, dot com industry etc.). Hence, in anticipation of bigger market sales the PE will remain very high even after 5 years.
8. This stock is true replacement of fixed deposit because WABCO is much safer than fixed deposits. Imagine, if Arvind Kejriwal comes, fixed deposits will be unsafe( banks will feel pressure) and WABCO type of monopolistic companies shall be safer for investors. Its products will safeguard the lives of customers and its stock investment can take way the worries of investors.
Changing the Indian commercial vehicles safety standards.
WABCO INDIA is a company owned by Mr. Warren Buffet making Automatic Manual Transmission System(AMT), ABS and Commercial Vehicles New Generation suspension system.
We recommend the stock due to the following strong reasons:
1. It is a Warren Buffet company in new technological areas of automotive parts like AMT, ABS and new generation suspension system for commercial vehicles.
2. At present in India, safety features like AMT and ABS are very rarely used and no body wants to incur extra cost of Rs. 1-2 lakhs on these features which can prevent accidents on the highways. Hence, we are buying this stock when there is no extra demand in the market.
3. Central Govt. is going to implement ABS compulsory w.e.f. 1st April,2015 and Tata Motors is going to provide AMT in all its trucks and commercial vehicles. These safety features will become compulsory in 1-2 years time and demand for these products will increase manifold.
4. WABCO INDIA is having monopoly in these products and it will be difficult for any new entrant to come in the market in near future.
5. Parent company is going to make India a sourcing hub for supplying it to other countries and hence in future there will be a lot of export of these products from WABCO.
6. At present total commercial vehicle sale is 8 lakhs per year which is likely to increase to 14 lakhs by 2019. Imagine if Rs. 1 lakh worth of ABS, AMT is on one vehicle, 5 years later WABCO can increase its sale by Rs. 6000-7000 crores( 50% market share on 14 lakhs vehicles at 1 lakh per vehicle). It can give additional profit of Rs.700-1000 crores per year to WABCO after 5 years. These projections are on the conservative side and real picture may be better.
7. The stock will command high PE in next 5 years also because there will be lot of excitement, glamour and feeling of safety amongst investors with this stock. Whenever a new game changing product is introduced in the market, the real commercial value is realized after 5-10 years( take the example of internet, dot com industry etc.). Hence, in anticipation of bigger market sales the PE will remain very high even after 5 years.
8. This stock is true replacement of fixed deposit because WABCO is much safer than fixed deposits. Imagine, if Arvind Kejriwal comes, fixed deposits will be unsafe( banks will feel pressure) and WABCO type of monopolistic companies shall be safer for investors. Its products will safeguard the lives of customers and its stock investment can take way the worries of investors.
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