Gabriel India - Buy

Gabriel India – Buy

CMP – Rs.187/- share
ROIC – 34%
Target – Rs. 240/- share
Upside – 28%

“Connected to the ground, open to the sky”

In today’s rapidly evolving automotive industry, Gabriel India stands out as a compelling investment opportunity. With its strong market presence in the electric vehicle (EV) suspension space, the company is well-positioned to capitalize on the growing demand for EVs in India. Additionally, Gabriel India’s recent foray into the sunroof systems segment, through a joint venture with global sunroof maker Inalfa, promises to unlock new avenues for revenue growth and diversification.

Let’s explore why ‘Gabriel India’ is a stock worth investing in.

EV-Proof Business: Gabriel India has established itself as a leading player in the EV suspension market, commanding over 80% market share. With prominent clients like Ola Electric, Hero Electric, Aether, Ampere, and Mahindra Electric, the company is at the forefront of the EV revolution in India. This provides Gabriel India with a solid foundation to leverage the anticipated surge in EV sales. It will also benefit from the associated demand for suspension systems.
Strong Financial Performance: Gabriel India’s financials are impressive, showcasing the company’s robust position. With net cash reserves of Rs. 300 crores and a remarkable return on invested capital (ROIC) of 34%, Gabriel India demonstrates sound financial management. The company’s efficient working capital management, evidenced by a cash conversion cycle of only 12 days, further underscores its monetary strength.

Strategic Technological Focus: Gabriel India’s strategic focus on new technologies, such as the development of semi-predictive suspensions for luxury cars priced above 30 lakhs, positions it as an innovator in the industry. The company’s entry into the premium sunroof systems segment, through the joint venture with Inalfa, opens up exciting opportunities for high-margin, high-growth business. These strategic initiatives are key drivers of future growth for Gabriel India.

Margin Expansion: A major area of focus for management is margin expansion. Through initiatives like the Core 90 program and operating leverage, Gabriel India aims to increase its EBITDA margin from the current 7% to 10% in the next 2-3 years. The company’s emphasis on enhancing margins underscores its commitment to maximizing profitability and delivering value to shareholders.

Proxy Play in the 2-Wheeler Space: Gabriel India’s close association with TVS Motors, its largest customer, presents a compelling investment proposition. As TVS Motors increases its market share, Gabriel India stands to benefit from 2-wheeler growth. This makes Gabriel India an attractive investment option, particularly for those bullish about TVS Motors, given its expensive valuation.

Diversification into Sunroof Systems: The joint venture with Inalfa represents a significant step for Gabriel India in diversifying its product portfolio. Inalfa, a globally recognized sunroof systems manufacturer, brings valuable expertise and a strong customer base to the partnership. By addressing the growing demand for sunroofs in India, Gabriel India aims to capitalize on the market potential and reduce dependence on imported sunroof systems.

Promising Sunroof Market: The automotive sunroof market in India is poised for substantial growth, with estimated sales crossing 7 lakh units in CY2023. Increasing consumer preference for passenger vehicles with sunroofs and willingness to pay a premium for this feature present a significant opportunity for Gabriel India. Furthermore, the company’s focus on localizing sunroof production aligns with the government’s Atmanirbhar Bharat and Make in India initiatives.

Management’s Vision and Targets: Gabriel India’s management has set ambitious goals for the company’s future. With CAPEX projections of Rs. 100-150 crores for FY24E and Rs. 1,000 crores by 2030 for the solar venture. The company aims to breakeven in the first year of operations. Management’s focus on double-digit EBITDA margins further emphasizes their commitment to sustained growth and profitability.


Gabriel India’s strong market position in the EV suspension segment, successful diversification into sunroof systems, and focus on innovation and margin expansion make it an appealing investment option. As the EV and sunroof markets continue to grow, Gabriel India is well-positioned to capture new opportunities and deliver long-term value to its shareholders.

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