Sharekhan, a leading brokerage firm operating in India, in its recently published report on the Gabriel India Ltd has suggested investors buy for a target price of Rs 141 per share. For the company, EV remains the key growth driver, as its key clients are getting geared up for EV product development and new product launches.
CMP, Target Price, Performance, 52 Week Low & High The Current Market Price (CMP) of Gabriel India Ltd is Rs 117.50 per share. It touche the 52-week low of Rs 102 per share and the 52-week high is Rs 168.15 per share. Currently, the stock is trading at nearly Rs 15.50 above the 52-week low levels. Other the other hand, it is trading at Rs 50.65 below the 52-week peak of the stock. Looking at the data of return on investment, the stock has not performed well over the last 5 years, as moved down nearly 23.6% in 5 years. It gave a positive return of 5.49% in the last 1 month. Taking into account the estimated target price of Rs 141 per share and the CMP of Rs 117.50 per share, the stock witnessed a gain of 20% in 12 months. Well-positioned to benefit from the increasing share of EVs Gabriel is well-positioned to benefit from the rising penetration of EVs, especially in the 2W and 3W segments, where the company has developed strong relationships with leading and promising companies. The company is developing products for electric vehicle OEMs such as OLA Electric, Okinawa, Ather Energy, TVs among e-2W OEMs, and Bajaj Auto, M&M, Tube Investment of India among e-3W OEMs. Gabriel is also a sole supplier to Ola Electric for suspension components in India, which promises to be a strong EV player in the 2W space. Dominance in market shares to remain intact Riding on strong relationships with large OEMs and the acquisition of new clients, the company continues to increase and maintain its market share across segments, with 25% market share in the 2W&3W segment, 22% in the PV segment and an 85% market share in the CV segment, including aftermarket sales. Robust earnings growth Propelled by a strong outlook for its clients, we expect Gabriel's net earnings to post a 32% CAGR over FY22E-FY24E, driven by a 15.5% revenue CAGR and a 160-bps expansion in EBITDA margin to 7.9% in FY24E from 6.3% in FY22. Sharekhan Maintain Buy with An Unchanged Target Price of Rs. 141 Gabriel is witnessing strong traction from domestic and global original equipment manufacturers (OEM), as automotive demand recovers, driven by a strong brand recall and a leadership position in suspension components. The outlook remains positive, driven by the normalisation of economic activities. Incremental revenue is likely to improve, driven by client additions, new product launches, sector expansion, increasing domestic and global penetration, and value additions in its products. Operating profit margin (OPM) would expand led by cost reduction, increased localisation, operating leverage, and enhanced value addition. "We believe Gabriel's business performance will continue to outperform the industry led by its leadership position and its preparedness to benefit from faster EV adoption. The stock has corrected by ~15% in the past three months and is available at attractive valuations of 10.8x P/E multiple and 5.9x EV/ EBITDA multiple its FY24E estimates. We maintain our Buy rating on Gabriel with an unchanged PT of Rs. 141, aided by a recovery in automotive demand, its preparedness to benefit from the adoption of EVs in India, and attractive valuations," the brokerage has said. Company Overview - Gabriel India Ltd Established in 1961, Gabriel India Ltd is the flagship company of the ANAND Group. The company is a leading manufacturer of Ride control products i.e Shock Absorbers McPherson Struts & Front Forks. It has established a significant presence across all automotive customer segments, including Original Equipment Manufacturers (OEMs), Aftermarket, and exports. Gabriel India's robust design and engineering capabilities have helped customers meet the evolving technological needs of the automotive industry by creating lighter, fuel-efficient, and more enduring vehicles that ensure passenger comfort and safety.
The Current Market Price (CMP) of Gabriel India Ltd is Rs 117.50 per share. It touche the 52-week low of Rs 102 per share and the 52-week high is Rs 168.15 per share. Currently, the stock is trading at nearly Rs 15.50 above the 52-week low levels. Other the other hand, it is trading at Rs 50.65 below the 52-week peak of the stock.
Looking at the data of return on investment, the stock has not performed well over the last 5 years, as moved down nearly 23.6% in 5 years. It gave a positive return of 5.49% in the last 1 month.
Taking into account the estimated target price of Rs 141 per share and the CMP of Rs 117.50 per share, the stock witnessed a gain of 20% in 12 months.
Gabriel is well-positioned to benefit from the rising penetration of EVs, especially in the 2W and 3W segments, where the company has developed strong relationships with leading and promising companies. The company is developing products for electric vehicle OEMs such as OLA Electric, Okinawa, Ather Energy, TVs among e-2W OEMs, and Bajaj Auto, M&M, Tube Investment of India among e-3W OEMs. Gabriel is also a sole supplier to Ola Electric for suspension components in India, which promises to be a strong EV player in the 2W space.
Riding on strong relationships with large OEMs and the acquisition of new clients, the company continues to increase and maintain its market share across segments, with 25% market share in the 2W&3W segment, 22% in the PV segment and an 85% market share in the CV segment, including aftermarket sales.
Propelled by a strong outlook for its clients, we expect Gabriel's net earnings to post a 32% CAGR over FY22E-FY24E, driven by a 15.5% revenue CAGR and a 160-bps expansion in EBITDA margin to 7.9% in FY24E from 6.3% in FY22.
Gabriel is witnessing strong traction from domestic and global original equipment manufacturers (OEM), as automotive demand recovers, driven by a strong brand recall and a leadership position in suspension components. The outlook remains positive, driven by the normalisation of economic activities. Incremental revenue is likely to improve, driven by client additions, new product launches, sector expansion, increasing domestic and global penetration, and value additions in its products. Operating profit margin (OPM) would expand led by cost reduction, increased localisation, operating leverage, and enhanced value addition. "We believe Gabriel's business performance will continue to outperform the industry led by its leadership position and its preparedness to benefit from faster EV adoption. The stock has corrected by ~15% in the past three months and is available at attractive valuations of 10.8x P/E multiple and 5.9x EV/ EBITDA multiple its FY24E estimates. We maintain our Buy rating on Gabriel with an unchanged PT of Rs. 141, aided by a recovery in automotive demand, its preparedness to benefit from the adoption of EVs in India, and attractive valuations," the brokerage has said.
Established in 1961, Gabriel India Ltd is the flagship company of the ANAND Group. The company is a leading manufacturer of Ride control products i.e Shock Absorbers McPherson Struts & Front Forks. It has established a significant presence across all automotive customer segments, including Original Equipment Manufacturers (OEMs), Aftermarket, and exports. Gabriel India's robust design and engineering capabilities have helped customers meet the evolving technological needs of the automotive industry by creating lighter, fuel-efficient, and more enduring vehicles that ensure passenger comfort and safety.
The stock has been picked from the brokerage report of Sharekhan. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.