Buy Gabriel India; target of Rs 1664: Motilal Oswal

Moneycontrol • 1 day ago

Original source

Key Investment Pillars

  • Diversification into new businesses: Gabriel India is undergoing a structural transformation into a diversified mobility platform, with a focus on powertrain-agnostic content and expansion into adjacencies such as sunroofs, solar dampers, and e-mobility.
  • Forvia Seating JV: The joint venture with Forvia will develop, manufacture, and market passenger vehicle seats, providing a new growth leg for Gabriel India.
  • HL Group acquisitions: The acquisition of stakes in HL Mando Anand and HL Klemove will strengthen Gabriel India's portfolio across braking, steering, suspension, and ADAS.
  • Margin improvement: The company expects margins to improve over the coming quarters, driven by the pass-through of commodity price increases and higher capacity utilization.

Thesis Validation Checklist

To validate the investment thesis, watch for:

  • Revenue growth: Strong demand from 2W and PV segments, driven by new business initiatives and acquisitions.
  • Margin expansion: Improvement in margins due to pass-through of commodity price increases and higher capacity utilization.
  • New business traction: Progress in the Forvia Seating JV and other new business initiatives, such as sunroofs and e-mobility.
  • Consolidation of group businesses: Integration of acquired businesses and consolidation of group entities under Gabriel India.