Geojit recommended hold rating on Gabriel India with a target price of Rs 155 in its research report dated February 28, 2019.
Geojit's research report on Gabriel India
Gabriel India Ltd (GIL) is one of the leading manufacturers of ride control products viz Shock Absorbers, Front Forks in automotive segments, with a market share of 25 %( 2W, PV) & 75 % (CV). Q3FY19 revenue grew by 14% on the back of strong orders from two wheeler manufacturers (19%YoY) and higher export share. However share from the PV segment declined by 9%YoY. EBITDA margin contracted by 60bps owing to change in product mix and elevated RM cost (+190bps). The new Capex initiated for supplying Front Fork to Honda Motorcycle & Scooter ltd (HMSI) and backward integration of Piston Rods is expected to commence operation from Q4FY20.
We value GIL at P/E of 15x as we roll forward to FY21E with a revised target of Rs.155 and downgrade to HOLD.
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