Buy Gabriel India Ltd for Target Rs 1,381 by Elara Capital
Margins steady; diversification on track
Gabriel India’s (GABR IN) standalone Q4 revenue grew 19.3% YoY to INR 11.1bn (consolidated revenue up 12.7%, largely impacted by a YoY drop in sunroof revenues). Consolidated EBITDA margin improved slightly by ~27bps QoQ to 9.3% in Q4, but dropped 80bps YoY, largely due to higher raw material cost. Management expects demand to be buoyant , with some headwinds posed by commodity price inflation. Importantly, the amalgamation of four announced group companies has received all the approvals (effective 22 nd May 2026) and remaining formalities will be completed by June end. The order wins across businesses remain encouraging. Further, management affirmed its intension to consolidate remaining group entities into GABR , which is directionally positive. However, given sharp commodity inflation, we factor in some margin impact in FY27 and hence ,reduce our FY2 7E -28E EPS by 2-3% but maintain Buy with TP unchanged at INR 1,381 , as we roll forward by a quarter
New order wins broaden the multi-product runway:
New order wins remain encouraging across businesses . In the SK Enmove lubricant JV (operations live, small sales from April), GABR secured two OEM wins — M&M via American Axle, and Mobis on the EV battery -fluid side. The Jinhap fasteners JV has its first OEM win with a Korean customer, with the facility due to be complete d by September and SOP in Q3FY27. In core suspension, the maiden Hero MotoCorp 2W program is on track for Q2FY27 SOP with further businesses under negotiation, while in PV , a Frequency Selective Damping (FSD) development is underway with Tata Motors. Regarding semi -active/active suspension, 2W development has begun with two customers on signed LOIs . In PV s, one POC is complete and a second is planned (no formal LOI as yet) — a product positioned to yield better margins than the current passive range.
Group revenue ambition intact; sunroof order book firming:
Management reiterated the ANAND Group's INR 500bn FY30 revenue target with GABR as its growth engine. Importantly, there is clear intent to fold all group businesses into GABR over time – which is directionally positive in our view . Within sunroof, Q4FY26 revenue was INR 0.99bn at 14.6% EBITDA margin (FY26: INR 4.44bn, 15.1%) on ~170k units . The QoQ revenue dip reflected weaker Kia Syros offtake, while margin guidance to remain in 12-14% range. The order pipeline is firming — three Korean wins from Q 3, a local OEM in advanced discussion and further RFQs —with the Syros EV variant (domestic + export) entering production now and five new models being launch ed in FY27 – 28.
Reiterate BUY with TP unchanged at INR 1,381:
We are encouraged by the announcements of new orders and the management’s intent to consolidate remaining subsidiaries/JVs in to GABR . The greatest potential for a re -rating for any auto ancillary company arises from transition from a single - to a multi -product portfolio. Auto ancillaries have outperformed OEMs in the past decade, on four counts: a) increasing products, b) expansion in segments, c) expansion in geographies and d) inorganic expansion. GABR is a pl ay on all four. However, due to higher commodity inflation, we lower our FY2 7E -28E pro forma EPS estimates by 2- 3%, but maintain our TP at INR 1,381 on 40x June ’28E EPS, as we roll forward by a quarter. We introduce FY29E estimates. Retain BUY .
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SEBI Registration number is INH000000933
