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!
!
Date (17
Gabriel India LTD
Current Market Price =Rs. 86.25
Market Cap = Rs. 1238.93 Cr.
52Week H/L= Rs. 106.75 - 72.00
Absolute Rating BUY
Rating Relative to Sector Outperformer
Sector Relative to Market Overweight&

!
January 2016)

th

) Stock)Details)BSE)(as)on)17GJanG2016))
18.38

P/E)(TTM))

3.73

P/BV)(TTM))

4.69

EPS)(TTM))

1.22 %

Dividend)yield)(%))

&

OVERVIEW
Gabriel was set up in 1961 by Mr. Deep C. Anand in collaboration with Maremont Corporation to manufacture best-in-class
shock absorbers. Gabriel is now the flagship company of the New Delhi-headquartered Anand Group and is now the
leading manufacturer of ride comfort mechanisms which include front forks, shock absorbers & struts.
!
!

GIL Gabriel India Limited (headquartered in Pune) has six manufacturing facilities (Pune, Khandsa, Nashik, Hosur,
Dewas, Parwanoo) and three satellite plants (Sanand, Malur and Aurangabad).
The Company possesses an aggregate manufacturing capacity of 28 million units; this capacity addresses the
needs of prominent Indian automotive majors; the Companys production facilities are proximate to OEMs.

GIL has a diversified customer base from 2W, CV, PV segments in automobile to railways.
Customer)wise)Revenue)Breakup))

Segmental)Break)down)of)Revenue)

4%

9%
2W

13%
51%
27%

OEM

PV

After!Market

CV

! Gaining

Market Share: Gabriel India Ltd has the market

share of about 75% in CV market, and 25% in each 2W
and PV market. GIL is consistently gaining market share
in all the markets as a result of new product development
and strategic alliances

! Growth in 2W market: There has been a slowdown in the

2W market in the last 3 quarters. However, Urban demand
which is about 60% of 2W demand is poised to grow due
to economic reforms and 7th Pay Commission. 52% of
GILs revenue comes from 2W.

! New

product Development: GIL is launching new

products like wheel rims, coolants etc in order to tap the
aftermarkets and exports market. It aims at attaining the
revenue share of 15% and 10% from after market and
exports.

! Key Clients: HMSI, Royal Enfield and TVS are its key
clients which are gaining the market shares in their
segments. HMSI has increased their SOB as it is planning
to get its supplies from non-Hero suppliers. GIL is gaining
SOB in new platforms in PVs like S-Cross and KUV100.

Exports

83%

3W

INVESTMENT RATIONALE

! Analyst:)Varun)Baxi))(pg15varun_b@mdi.ac.in)!

13%

!
Financial)Performance)G)Consolidated)(Rs.)Cr)))
)
Gross)sales)

FY!2014(15!

%!of!Sales!

FY!2013(14!!!

%!of!Sales!

1,593.04!

100.00!

1,418.02!

100.00!

Other)income)

5.78!

0.36!

7.67!

0.54!

Raw)material)

1,041.99!

65.41!

937.66!

66.12!

Employee)cost)

107.55!

6.75!

93.7!

6.61!

Other)
expenses)

177.52!

11.14!

243.65)

17.18!

Total)Opex)

1,327.06!

83.30!

1,210.41!

85.36!

Op)Profit)

120.16!

7.54!

91.83!

6.48!

Depreciation)

31.13!

1.95!

27.07!

1.91!

EBIT)

89.03!

5.59!

64.76!

4.57!

Interest)

5.48!

0.34!

9.00!

0.63!

Tax)

21.73!

1.36!

14.66!

1.03!

PAT)

60.02!

3.77!

42.6!

3.00!

RoCE)(%))

25.32!

!!

18.34!

!!

RoE)(%)))

19.66!

!!

15.72!

!!

ICR)

16.24!

!!

7.2!

!!

D/E)ratio)

0.13!

!!

0.27!

!!

Unnati!

RESULTS HIGHLIGHTS
! Gabriel

India has reported a standalone total income

from operations of Rs 375.18 crore which was 2.5%
down Y-O-Y due to the slowdown in the 2W market.
! Net profit of Rs 19.29 crore for the quarter ended
Sep15 was 10.6 percent above Q2FY15.
! GIL posted healthy margins with EBITDA margins of
8.8% as against 8.3% in Q2FY15. Though the revenues
were lower the company could post healthy margins
due to low commodity prices and cost rationalization.

Quarterly Performance - Consolidated (Rs. Cr ))

)

Q2!FY!16!

%!of!Sales!

Q2!FY!15!

%!of!Sales!

Gross!sales!

371.51!

100.00!

379.5!

100.00!

Other!income!

4.83!

1.30!

6.45!

1.70!

Raw!Material!

266.5!

71.73!

277.05!

73.00!

Employee!Cost!

28.5!

7.67!

27.00!

7.11!

Total!Opex!

342.41!

92.17!

353.05!

93.03!

Op!Profit!

33.93!

9.13!

32.90!

8.67!

Depreciation!

8.27!

2.23!

7.87!

2.07!

EBIT!

25.66!

6.91!

25.03!

6.60!

Interest!

0.58!

0.16!

0.79!

0.21!

Tax!

5.79!

1.56!

6.81!

1.79!

Reported!PAT!

19.29!

5.19!

17.43!

4.59!

SECTOR PERFORMANCE
Performance of Indian auto component industry is
directly correlated to the performance of
Automobile OEMs. With the Auto industry on the
growth track in past 15 months and favorable
government policies like reduction of corporate
taxes to 25% over 4 years etc. have helped the
auto component industry to post healthy growth
of about 11% in revenue softer commodity prices
has also lead to healthy margins. The growth was
primarily fuelled by the recovery for major OEMs in
CV and PV segments. With the M&HCV segment
registering a growth of 24% as impact of
replacement demand pre-buying ahead of
complete rollout of BS-IV emission norms. CV
segment is expected to continue on the growth
track driven by MHCV segment. PV segment with
the rollout of new models and easing interest
rates is also expected to be a new driver for auto
industry. Healthy recovery is also expected in 2W
industry on the back of 7th pay commission and
economic recovery.

NEWS
!

43rd position in the best place to work for: ET

recognized Gabriel India as 43rd best place to work in
India and 2nd in the Indian Auto Component industry for
2015. Of more than 700 organizations assessed spanning
over 20 industries, Gabriel was acknowledged for its
vibrant culture where employees feel motivated to work.

Shareholding!Pattern!!

SHAREHOLDING PATTERN
SepJ15

JunJ15

60
40
20
0
Indian!(Promoter!&!
Group)

Non!Promoter!
(Institution)

Non!Promoter!
(NonJInstitution)

!!
Peer)Comparison)
YoY)share)price)
Growth)(%))

Current)P/E)

Gabriel!!

G8.04)

18.38)

Munjal!Showa!

G10.77)

10.39)

Jamna!Auto!

86.70)

20.87)

Company)

KEY CONCERNS
! Excessive dependence on OEMs: About 80% of the
revenue comes from OEMs. Thus for GIL to grow the
growth of OEMs is imperative. OEMs growth heavily
depends on the economic environment. With the global
economy on the verge of economic slowdown it poses the
risk for the auto Industry.

Analyst:)Varun)Baxi))(pg15varun_b@mdi.ac.in) !

Unnati!

Revenue)and)Profit)Trend)

Revenue!growth

380
370

25

20

20

15

360
350

10

340

330

70
60
50

15

40

10

30
20

320

Q2!FY16

Q1!FY16

Q4!FY15

Q3!FY15

Q2!FY15

J5

10
Q1!FY15

Q2!FY16

Q1!FY16

Q4!FY15

Q3!FY15

Q2!FY15

Q1!FY15

310

25

PAT!Growth

Percentage

390

PAT

Percentage

Revenue

PE!Chart!and!Relative!Share!Performance!(3!years)!

PE!Chart

Gabriel

30

SENSEX!

BSEAUTO

450
400
350
300
250
200
150
100
50
0

25
20
15
10

15JJanJ16

15JOctJ15

15JJulJ15

15JAprJ15

15JJanJ15

15JOctJ14

15JJulJ14

15JAprJ14

15JJanJ14

15JOctJ13

15JJulJ13

15JJanJ13

15JAprJ13

Disclosures:
Some other disclosures by the analyst being report or
sector specific:

Financial Definitions:
P/E = Market Price / EPS of Trailing Twelve Months
P/BV = Market Price / Book Value
EPS = Earnings Per Share
EBITDA = Earnings Before Interest Tax Depreciation and Amortization
PAT = Profit After Tax
All Figures in Rs crore unless stated otherwise
PAT = Profit After Tax
All Figures in Rs crore unless stated otherwise

General Disclaimer:

This document has been prepared by Unnati (A student run Investment Research Group at Management Development Institute, Gurgaon). The information and
estimates used in this report have been obtained from sources believed to be reliable, but we do not represent that it is accurate or complete, and it should
not be relied upon as such. Unnati shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the
information contained in this report. The document best represents the opinion of Unnati and is meant for internal circulation only. It should not be
considered as an offer to sell or buy.

Analyst:)Varun)Baxi))(pg15varun_b@mdi.ac.in) !

Unnati!