Cholamandalam securities' research report on Gabriel India
Gabriel India (GIL) reported a strong performance for the quarter as the revenues at ₹7.2bn increased by 59.6% YoY/5.3% QoQ led by higher volumes in CV & 2W/3W segment. The EBITDA at ₹0.5bn improved by 119% YoY/34.8% QoQ while PAT increased by 174.3% YoY/22.3% to ₹0.3bn. The EIBTDA margin ascended by 190bps YoY/150bps QoQ to7.1% led by adequate price hikes and improved product mix. The industry continued to industry headwinds in terms of RM inflation, yet the company’s order book status remained stronger than expected. The management anticipates upbeat growth outlook and margins normalizing back to double digit levels. Growth across segments- The company maintained its market share in Passenger Vehicle segment at 23%. The company observed 22% of total sales from new launches within major customers and increased traction in SUV segment. The CV market share improved to 89%. The better production volumes by OEMs helped the CV segment shows moderate growth (11% of total share). Although the 2W segment continued to face the pressure of increased commodity prices and muted demands, improving market share of key customers, efforts to develop new products, and acceptance of end products in the market pushed the performance of 2W/3W segment, which accounted of 65% of total sales and 30% of market share.
Outlook
The strong demand outlook, improving volumes and late cooling off in input cost are likely to auger well for the company in near term. Subsequently, the margins are expected to revert to double digits. Thrust over EV developments, improving market share across the business segments and expanding geographic presence bodes well for the long-term growth. We maintain our BUY rating on the stock with a price target of ₹173, assigning a P/E of 16x FY24 EPS.
More Info
At 17:30 Gabriel India was quoting at Rs 153.40, up Rs 4.45, or 2.99 percent.
It has touched an intraday high of Rs 155.00 and an intraday low of Rs 149.00.
It was trading with volumes of 134,349 shares, compared to its thirty day average of 66,888 shares, an increase of 100.86 percent.
In the previous trading session, the share closed down 0.63 percent or Rs 0.95 at Rs 148.95.
The share touched its 52-week high Rs 168.00 and 52-week low Rs 102.45 on 13 October, 2021 and 12 May, 2022, respectively.
Currently, it is trading 8.9 percent below its 52-week high and 49.39 percent above its 52-week low.
Market capitalisation stands at Rs 2,203.50 crore.For all recommendations report, click here
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