Buy Gabriel India target of Rs 170: ICICI Direct

The research firm ICICI Securities believes earnings of apparel brands and retail companies under their coverage may surprise positively from Q3FY22E as the likely demand recovery may result in better than expected margin performance. Some of the costs savings achieved during pandemic may sustain and coupled with high operating leverage may lead to higher than pre-covid margins from Q3FY22E.  Stocks like Trent, V-Mart and Aditya Birla Fashion and Retail are the preferred picks backed by their strong and consistent track record of execution.

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ICICI Direct's research report on Gabriel India

Gabriel India (GIL) is a global top-10 shock absorber manufacturer serving 2-W, 3-W, PV, CV, railway and aftermarket segments. FY22 revenue mix – ~65% 2-W, 3-W, ~22% PV, ~13% CV & railways • FY22 market share – 25% in 2-W, 3-W, 23% in PV, 85% in CV & railways • On-boarded EV players in 2-W, 3-W space and sole supplier for Ola Electric.

Outlook

We retain BUY rating on the stock amid EV immune product profile, prominent EV OEMs on-board and presence in SUV segment (Grand Vitara, New Brezza at Maruti; XUV700, New Thar at M&M among others). Upgrading our estimates, we now value GIL at 15x P/E on FY24E for a revised target price of Rs 170/share (earlier target price Rs140).

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Gabriel India - 090822 - ic