In­creased Roy­alty Bur­den may Hit Wabco In­dia’s Earn­ings Growth

The Economic Times - - Smart -

and 26% for FY17 and FY18, re­spec­tively, and the 12-month con­sen­sus tar­get price was ₹ 6,276.

The pro­moter of Wabco In­dia holds 75% stake in the firm. Wabco In­dia con­sti­tutes nearly 10% of the to­tal rev­enues and 15% of the to­tal op­er­at­ing profit of the par­ent com­pany. The earn­ings growth of Wabco In­dia de­pends on whether the roll­out of new prod­ucts will im­prove its con­tent per ve­hi­cle.

The in­crease in roy­alty rate will turn the spot­light on the vot­ing of mi­nor­ity share­hold­ers, which hold 25% in Wabco In­dia. The com­pany re­quires a nod for the pro­posal from ma­jor­ity of this group of share­hold­ers since it per­tains to re­lated party, that is the par­ent, in this case.

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