Gabriel India Ltd. share price target

Healthy presence in SUV space, augmented by sunroof segment addition: Gabriel has ~24% market share in PV space and realises healthy ~23% of its sales from this category. Interestingly, within PV space, GIL realizes large part of its sales from the SUV sub-segment which is witnessing healthy demand traction. Also notably, with aim to expand its presence in top selling SUV space & to catch up on premiumization trend, GIL has entered into JV with Inalfa for manufacturing of sunroof system components for OEMs in India. Simultaneously, it is entering the solar...

Broadly in-line with ARe of Rs1.128bn, Gabriel’s consolidated EBITDA grew 14% y/y to Rs1.129bn in Q2. We expect its consolidated revenue/EBITDA/EPS to clock 16/18/34% CAGR over FY25-28, driven by: suspensions, as greater wallet-share is likely to drive 13% revenue growth.

Marks meaningful step forward in realization group strategic vision. Simplification of group structure and realign corporate structure to unlock synergy and enhance competitive edge.

We visited Gabriel’s plant and attended its management meet on Thursday in Pune. The company’s change in strategy by way of entry into the high-growth ‘sunroof’ product line is positive and would be a major value driver.

Exceeding our estimated Rs966m, Gabriel’s Q2 consolidated EBITDA surged 34% y/y to Rs987m. On the change in strategy, the company’s entry into the high growth “sunroof” product line is positive and would be a major value driver.

Gabriel reported PAT at Rs. 52.7 crore (+12.2% y-o-y) against our estimate of Rs. 54 crore on 3% beat in revenue estimates and 50 bps y-o-y expansion in gross margin.

Gabriel has reported better-than-estimated performance in Q1FY2025 on account of healthy
traction in its PV and two-wheeler (2W) division. Revenue has increased by 7.3% y-o-y to Rs. 864.2
crore.

We maintain a Buy rating with a revised PT of Rs. 481, owing to its strong brand equity, market share expansion strategy, focus on profitability, the expectation of a rise in content per vehicle, inorganic growth strategies, and renewed focus on exports.