Multibagger stock Gabriel India jumped 4.5% on Tuesday, 9 June, after domestic brokerage Motilal Oswal Financial Services (MOSL) initiated coverage on it with a ‘Buy’ rating as it sees significant value unlocking led by restructuring initiatives.
Gabriel India has operated as a single-product suspension player, which inherently constrained its scalability. The company is now undergoing a structural transformation into a diversified mobility platform, paving the way for a long runway of growth.
The midcap stock has offered solid returns to investors over different time frames. According to BSE data, Gabriel India share price has jumped 60% in a year, 165% in two years, 690% in five years and 1040% in 10 years.
What could drive Gabriel India stock?
Part of the Anand Group, Gabriel India is being positioned as the primary growth vehicle for the group’s operations, as evidenced by the recent restructuring initiatives such as the integration of Dana and Henkel and joint ventures like Enmove and Jinhap being routed through the listed entity. These initiatives are driving long-term shareholder wealth creation, said the brokerage.
Dana Anand is a premier driveline player with a market-leading position in PV, CV, and off-highway segments, with an estimated 30-40% market share and supplies to key OEMs such as M&M, Maruti Suzuki, and Tata Motors. Similarly, Henkel Anand is one of India’s leading automotive adhesive players, supplying key OEMs such as Maruti and TMPV.
The company itself is diversifying beyond suspensions via adjacencies and JVs by tapping segments such as sunroofs, solar dampers, and e-mobility. And in its core suspensions segment, while it has outperformed the industry, the company is expected to sustain this momentum and increase its business share through new customer additions and premiumization.
Financial strength
Motilal Oswal highlighted that multibagger Gabriel India also has a net cash balance sheet, lean working capital (~27 days), and strong return ratios (~30% core ROCE). “Cash conversion is also robust (10-year net CFO/EBITDA ~81%, FCF/PAT ~61%), while consistent dividends (more than 20% payout) reflect the company’s ability to generate and return surplus cash to shareholders across business cycles,” it said.
Going ahead, the brokerage expects its revenue/EBITDA/PAT CAGR of 22%/23%/55% for the consolidated business (FY26-FY28E), primarily driven by an increase in business share with customers and restructuring.
What Motilal Oswal said on Gabriel India stock
Against this backdrop, MOSL said that it has initiated coverage on Gabriel India stock with a ‘Buy’ rating and a target price of ₹1,266, signalling an upside of almost 30% from its last close.
“Further group consolidation could unlock significant upside, with unlisted Anand Group ventures (having a PAT of INR2.3b) potentially equivalent to the value of GABR’s standalone suspension business. A premium to its historical average one-year forward multiple is warranted by: 1) restructuring-led earnings growth, and 2) Gabriel’s emergence as the group’s primary growth platform for future restructuring and JV opportunities,” said the brokerage.
Rise in competitive intensity, fluctuations in commodity prices, changes in technology, and continued geopolitical headwinds causing slowdown in end markets are among the key risks for the company.
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