Fundamental Analysis: Gabriel India - Absorbing Market Shocks

I would like to bring Gabriel India share back up again on the radar again as there is a good buying opportunity after the 25%+ correction.

Few things to keep in mind:

1. With 60+ years of operations, Gabriel India is India’s largest and is one of the top 10 largest suspension manufacturers globally.
2. The company has four product segments:

* 2-3 wheelers which contributes to 64% of total portfolio sales and commands 32% market share;
* passenger vehicles which contributes to 22% sales and commands 23% market share;
* the commercial vehicles which contributes to 12% sales but commands a whopping 89% market share and
* finally aftermarket with 40% market share.

3. With a production capacity of 24M units, it is the only company which is present in all the 4 segments
4. There are two new areas (both high-margin) that Gabriel India will further diversify into in 2024:

* This firm diversified its offerings by successfully launching sunroofs for Hyundai Creta in a Joint Venture with Dutch Sunroof specialists Inalfa. This venture is expected to generate 1000 cr. In revenue by 2030.
* This is India’s first indigenous company that makes shock absorbers for trains (e.g., Vande Bharat and Rajdhani). As of today, they have exclusive supplier rights and can work in their favor esp. with Indian government’s push to modernize indian railways.

5. Currently, only 4% of the market is global in nature. However, with new international orders, new joint ventures and push from the company for aftermarket sales in Latam and Africa - this share is expected to rise.
6. Gabriel India is a part of the Anand Group which operates 21 auto ancillary companies and has established multiple technical partnerships to drive the group R&D. It also created a new subsidiary called Anevolve EV and signed 3 JVs to create wide range of EV products. This allows Gabriel India to access deep customer insights from its sister companies and unlock strong OEM relationships globally.
7. From an equity research analyst perspective, they are anticipating a 40% upside on the stock with revenue growth of 12% and profit growth of 22% - all bullish on revenue diversification, demand uptick and healthy market share across segments.
8. Based on my valuation models (football field with relative, DCF) - the stock is undervalued at the moment by 10% - 150% across the different valuation metrics that you take.

So overall, its an interesting gem that needs a revival after the current sideways run is complete.

Please check out the link (5 minutes) where I further structure this detail out. Your feedback will help me course correct and increase the depth of my analysis:


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