Gabriel India - Company Update - Q1FY21 Result - ICICI Securities

Gabriel India (GIL) reported muted Q1FY21 results tracking ~70% decline in auto OEM volumes during the Covid-impacted quarter. Net sales declined 76.2% YoY to Rs. 123 crore. Loss at EBITDA level was at Rs. 17.1 crore, with gross margins improving ~120 bps QoQ to ~29.5%. Loss after tax for the quarter came in at Rs. 23.8 crore vs. profit of Rs. 22.1 crore in the base quarter.

Valuation & Outlook

We continue to like GIL for its powertrain agnostic and capital efficient business model (double digit return ratios). It also possesses healthy financials i.e. debt-free B/S and positive CFO & FCF generation (CFO yield at ~7%). However, we believe CMP builds in many of the positives, and that the stock is near fair valuations. Hence, we downgrade GIL to HOLD, valuing it at Rs. 92 i.e. 18x FY22E EPS. Progress on reducing OEM dependence and cost control initiatives are key monitorables going forward, in our view.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_GabrielIndia_CoUpdate_Aug20.pdf

Shares of GABRIEL INDIA LTD. was last trading in BSE at Rs.87.2 as compared to the previous close of Rs. 86.4. The total number of shares traded during the day was 8311 in over 219 trades.

The stock hit an intraday high of Rs. 88 and intraday low of 85. The net turnover during the day was Rs. 719478.

Source : Equity Bulls

Keywords