Result Update: Gabriel India Ltd - BUY - TP Rs.185 - Kotak

Gabriel reported healthy growth in revenue, EBITDA and net profit in 1QFY19. During the quarter, the two wheeler, passenger vehicle and commercial vehicle segment witnessed high growth in production.

Key Highlights

- Revenue in the quarter came in at Rs5,146mn, 23% YoY increase, led by growth across segments. EBITDA in the quarter stood at Rs490mn, growth of 26% YoY. Majority of growth in EBITDA came from higher revenues. EBITDA margin improved marginally by 20bps YoY and QoQ to 9.5%. PAT for the quarter stood at Rs267mn, 31% growth over 1QFY18 PAT of Rs204mn. PAT came in marginally ahead of our estimate of Rs255mn.

Valuation and Outlook

- Auto demand in the domestic market was robust in 1QFY19 and the same is expected to continue in FY19. We expect the two wheeler industry (largest revenue contributor to Gabriel) and commercial vehicle segment to witness strong double-digit volume growth in FY19. We expect improved product mix (higher share of two wheeler and commercial vehicle revenue) and cost control efforts to help the company's margin to witness marginal increase in FY19/FY20. We retain BUY on the stock with revised price target of Rs185 (earlier Rs193).

Shares of GABRIEL INDIA LTD.-$ was last trading in BSE at Rs.143.25 as compared to the previous close of Rs. 142.95. The total number of shares traded during the day was 13700 in over 277 trades.

The stock hit an intraday high of Rs. 145.7 and intraday low of 141.35. The net turnover during the day was Rs. 1967226.

Source : Equity Bulls

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