Sharekhan has given Buy recommendation for Gabriel India with a target price of Rs. 197 in its research report issued on Sep 15, 2022
Sharekhan’s research report on Gabriel India
Faster adoption of EVs in India would be the key growth driver for Gabriel, led by its increasing market share with its EV clients and first-mover advantage of developing EV suspension products that have light weight, noise reduction, and enhanced automation properties. Gabriel’s dominant position in suspension components is expected to remain intact, aided by its strong relationship with OEMs and brand recall in the aftermarket segment. Gabriel’s earnings are set to report a 42.8% CAGR over FY2022E-FY2024E, driven by a 18.3% revenue CAGR and a 220-bps expansion in EBITDA margin to 8.5% in FY2024E from 6.3% in FY2022. The stock trades at attractive valuations of 12.9x P/E multiple and 7.6x EV/EBITDA multiple its FY2024E estimates.
We maintain Buy on Gabriel India Limited (Gabriel) with a revised PT of Rs. 197, factoring in robust automotive demand, its preparedness to benefit from the adoption of EVs in India, and better valuations.