Gabriel India Ltd’s operating revenue has registered a steady growth in its operating revenue (YoY) of 8.3% to Rs 3,704 mn, whereas it has seen an increase of 1.1% (QoQ). The company has witnessed an increase in volumes in passenger vehicle segment compared to the same quarter of its last year (32.0% Vs 27.0%) led by the likes of its some customer products, whereas the share of its 2/3 wheeler segment (56.0% Vs 60.0%) has decreased because of the lower off-take from 2 of its customers and share of commercial vehicles segment stood at 12.0% Vs 13.0% of its revenue. We introduce FY18E earnings and expect the company to register stable operating revenue at CAGR of over 10.4% during FY16-FY18E on the back of expected improvement in the economy and expected reforms at the macro-economic level leading to the increased customer demand.

Valuation: They introduce FY18E earnings and reiterate our “BUY” on Gabriel India valuing it at 20.0x of its FY18E EPS of Rs 7.1, which is ~1 Standard deviation from its mean forward P/E multiple over its 5 years and also was the average forward P/E multiple in the last 2 years to arrive at a target price of Rs. 144.