Buy Gabriel India; target of Rs 169: Sharekhan

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Sharekhan's research report on Gabriel India

Q1FY23 results were above expectations, led by 120bps higher than expected expansion in EBITDA margin at 7.1%. EV remains the key growth driver for Gabriel, as its key clients are getting geared up for EV product development and new product launches. Gabriel’s earnings are set to report a 39.3% CAGR over FY22E-FY24E, driven by a 17% revenue CAGR and a 220-bps expansion in EBITDA margin to 8.5% in FY24E from 6.3% in FY22.

Outlook

We maintain Buy on Gabriel India Limited’s (Gabriel’s) with a revised PT of Rs.169, factoring in robust automotive demand, its preparedness to benefit from the adoption of EVs in India and comfortable valuations. Stock trade at P/E multiple of 11.7x and EV/EBITDA multiple of 6.6x its FY24E estimates.

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Gabriel India - 090822 - khan