Geojit recommended accumulate rating on Gabriel India with a target price of Rs 103 in its research report dated August 13, 2020.
Geojit's research report on Gabriel India
The new Capex initiated for supplying Front Fork to Honda scooter & backward integration of Piston Rods has commenced operation from Q1FY21. Current order book stands at 80% on 2W. Focus on export market with a share of 20% by FY23 from current 5%. New orders from Dutch truck and VW Russia will create global presence. Due to the adverse impact of covid pandemic, Q1FY21 result is not comparable. However, strong aftermarket & stringent cost reduction measures has managed to minimize the impact. EBITDA margin declined by Rs171cr due to loss of production & lower product mix. Despite getting orders from Royal Enfield Classic and Honda scooter, lower sales in the passenger vehicle segment is deteriorating the overall revenue growth.
We expect positive volume recovery in H2FY22 & value GIL at 18x (3yr historical avg.) FY22E EPS and recommend Accumulate rating at CMP.
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