Company Update - Gabriel India - ICICI Securities

Gabriel India (GIL) is the market leader in the organised Indian automotive suspension segment with key products being shock absorbers, struts and front forks. It is also among the top 10 players globally with the aspiration of breaking into the top five club in the long term. It has a diversified presence across domestic segments with 2-W segment accounting for bulk of its sales at nearly 67% of revenues as of FY20. In the 2-W suspension product market it commands a market share of ~25% with top three clients being TVS Motors, Yamaha and Bajaj Auto. It is also a key supplier to 2-W EV players Ather Energy, Okinawa and Hero Electric among others.

Valuation & Outlook

Improving demand outlook leads to an upgrade in our estimates for GIL. We now expect sales, PAT to grow at a CAGR of 0.6%, -2.5%, respectively, in FY20-22E. GIL offers a play on the 2-W demand revival post Covid and possesses strong financials (debt free B/S, healthy cash flow generation, double digit return ratios). The recent run-up in stock price, however, limits our ability for rating upgrade. Consequently, we retain our HOLD rating on the stock, valuing it at Rs. 125 i.e. 22x FY22E EPS of Rs. 5.6.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_GabrielIndia_CoUpdate_26Aug20.pdf

Shares of GABRIEL INDIA LTD. was last trading in BSE at Rs.125.3 as compared to the previous close of Rs. 107.05. The total number of shares traded during the day was 193808 in over 6191 trades.

The stock hit an intraday high of Rs. 126.8 and intraday low of 109.45. The net turnover during the day was Rs. 23315729.

Source : Equity Bulls

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