Stock to buy: target price and financial result
The current market price (CMP) of Gabriel India is Rs. 154. Chola has estimated a target price for the stock at Rs. 173. This stock has the potential to yield a return of 12.33% during the coming year. It is a large cap stock with a market capitalization of around Rs. 22.05 billion.
|Stock market outlook|
|Current market price (CMP)||Rs.154|
|Potential return over 1 year||12.33%|
|Stock price at 52-week high||Rs. 168.15|
|52 week low price||Rs.102.00|
Gabriel India (GIL) EBITDA at Rs. 0.5 billion improved by 119% YoY/34.8% QQ while PAT increased by 174.3% YoY/22 .3% to Rs. 0.3 billion. EBITDA margin increased by 190 bps YoY/150 bps QQ to 7.1% driven by adequate price increases and improved product mix. The company maintained its market share in the passenger vehicle segment at 23%. The company observed 22% of total sales coming from new launches at major customers and increased traction in the SUV segment. CV market share improved to 89%.
Why investors should buy this stock: Chola
According to Chola, “The outlook for strong demand, improving volumes and a late slowdown in input costs should bode well for the business in the near term. Thereafter, margins should return to double digits. developments in electric vehicles, improving market share in business segments and expanding geographic presence bode well for long-term growth.We maintain our Buy rating on the stock with a price target of Rs. 173, attributing a P/E of 16x FY24 EPS. Lower than expected sales volumes at OEMs; deterioration in customer market share; margin volatility due to competitive pressures.”
Gabriel India Ltd. (GIL) is Anand Group’s flagship auto accessories company, offering the widest range of ride control products, including shock absorbers, struts and front forks. GIL has constantly focused on expanding its product portfolio. Currently, it has nine manufacturing plants spread across the country with a strong network of 500 dealers and 10,000 sales outlets. The company has launched over 1166 SKUs over the past 5 years, and around 45 SKUs were launched in 1QFY23 alone.
The company is present in the aftermarket segment on 6 continents. The industry continued to experience headwinds in terms of RM inflation, but the company’s backlog status remained stronger than expected. Management anticipates an optimistic growth outlook and margins normalizing to double-digit levels.
The stock above was taken from Chola’s brokerage report. Investing in stocks presents a risk of financial loss. Investors should therefore exercise caution. Greynium Information Technologies, the author, and the brokerage are not responsible for any losses caused as a result of decisions based on the article.