Zee Business Managing Editor and market veteran Anil Singhvi has shared a special Dussehra pick for long-term investors, recommending ZF Commercial Vehicle Control Systems India Ltd as a strong wealth-creating opportunity over the next two to three years.
At the current market price of around Rs 12,905, Singhvi believes the stock offers significant upside potential, with long-term targets of Rs 16,000, Rs 19,000 and Rs 25,000.
This implies an upside of up to 91% over a three-year horizon. His strategy is simple: buy on dips and accumulate more whenever the stock corrects by 15%.
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Strong Fundamentals Back the Call
ZF Commercial Vehicle Control Systems India, a subsidiary of the German multinational ZF Group, operates in the domestic commercial vehicle (CV) braking segment.
The company is considered a pure CV cycle play, making it well-positioned to benefit as the CV industry moves into an upcycle.
Around 30-35% of its revenue comes from exports, and the company has built a strong reputation as a global sourcing company because of its low-cost manufacturing and advanced engineering capabilities.
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Despite two years of weakness in the CV cycle, ZF Commercial Vehicle Control Systems India has delivered a healthy 15% CAGR in EPS growth.
Attractive Valuations After Correction
The stock has corrected nearly 20% over the past year, primarily due to the promoter reducing its stake from 75% to 60%. Singhvi sees this as an opportunity rather than a concern.
He points out that the stock is currently trading at around 30x PE, which is well below its historic average of 50x. This makes valuations attractive for long-term investors looking to enter at current levels or on dips.
Positive Brokerage Views
Brokerages, too, remain bullish on the stock. B&K Securities has set a target price of Rs 17,255, while Anand Rathi Securities has a target of Rs 15,700, supporting Singhvi’s bullish stance.
ZF Commercial Vehicle Share Price History
ZF Commercial Vehicle Control Systems India is currently trading at the Rs 13,000 levels.
The stock has a 52-week high of Rs 16,440 and a low of Rs 9,566.75, with a market cap of Rs 24,792 crore and is part of the BSE 500 index under the Auto Components & Equipment sector.
In terms of performance, the stock has gained 1.04% in the past week but is down 3.75% in two weeks and 8.19% over the past month.
Over three and six months, it has slipped by 2.09% and 0.40% respectively, though it remains up 9.10% year-to-date.
On a longer horizon, the stock is down 18.56% in one year and 15.87% in two years, but has delivered a modest 2.03% gain over three years, 132% over five years, and 89.46% over ten years.
