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2025-02-22 04:42:47 pm | Source: Choice Broking Ltd
Buy Gabriel India Ltd For the Target Rs.565 by Choice Broking Ltd
Buy Gabriel India Ltd For the Target Rs.565 by Choice Broking Ltd

GABR delivered a strong performance driven by the 2W and export segments

* Revenue up 24.7% YoY and down 1.0% QoQ to INR 10,166 Mn (vs CEBPL est. at INR 9,757 Mn).

* EBITDA up 30.3% YoY and down 7.3% QoQ to INR 915 Mn (vs CEBPL est. at INR 927 Mn). EBITDA margin up 39bps YoY and down 61bps QoQ to 9.0% (vs CEBPL est. at 9.5%).

* APAT up 45.7% YoY and down 4.5% QoQ to INR 601 Mn (vs CEBPL est. at INR 579 Mn).

GABR to double its capacity for the sunroof business: The sunroof business is experiencing strong demand, and the company is set to double its existing capacity to 360K units per year before end of CY 2025. The company has won new business for sunroof with Kia and started the production. With this the current capacity will run at full utilization. We believe that GABR being a strong player in the suspension systems business, diversification into the sunroof business has helped the company reduce dependency on single product. The overall margin profile of the company has been positively impacted as the sunroof business has better EBITDA margin (12%-14%) compared to the suspension systems business (8%-9%).

New business wins across various segments demonstrate a healthy pipeline and potential for future growth: The company has won new business with Yamaha for scooters and is also deeply involved with Bajaj through two new programs (Dominar and Pulsar). The company is also working with multiple customers in the e-bike segment and is targeting the European market. The new programs added in the CV segment include Mahindra – UPP E1 , TML – Prima Axle damper, Coral , TVS – 4W, Pinnacle E Mobility.

View and Valuation: We revise our FY26/27 EPS estimates downwards by 2.0%/3.3% and roll over our forecasts forward to come up with a revised target price of INR 565; valuing the company at 23x (unchanged) on FY27E EPS while maintaining our ‘BUY' rating. We continue to have a positive view for the company as it has forayed into high a growth and powertrain technology agnostic product like sunroof system; being a beneficiary of increasing demand from SUV category and new order wins across different segments.

 

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