Gabriel India: Q4FY15 net profit up 55.52% y/y to INR129.55m, Firstcall recommend 'Buy'

1. CMP 81.55
Target Price 94.00
ISIN: INE524A01029
MAY 25th
2015
GABRIEL INDIA LTD
Result Update (PARENT BASIS): Q4 FY15
BUY
Index Details
Stock Data
Sector Auto Parts & Equipment
BSE Code 505714
Face Value 1.00
52wk. High / Low (Rs.) 106.75/38.10
Volume (2wk. Avg.) 49000
Market Cap (Rs. in mn.) 11713.84
Annual Estimated Results (A*: Actual / E*: Estimated)
YEARS FY15A FY16E FY17E
Net Sales 14440.98 15885.08 17314.74
EBITDA 1207.60 1318.24 1444.11
Net Profit 600.24 657.55 726.35
EPS 4.18 4.58 5.06
P/E 19.52 17.81 16.13
Shareholding Pattern (%)
1 Year Comparative Graph
GABRIEL INDIA LTD S&P BSE SENSEX
SYNOPSIS
Gabriel India Limited established in 1961 is the
pioneer of Ride Control Products in the country, is
the flagship company of Anand and a leading name
in the Indian auto component industry.
In Q4 FY15, Net profit jumps to Rs. 129.55 mn an
increase of 55.52% against Rs. 83.30 mn in the
corresponding quarter of previous year.
The company’s net sales registered 3.93% increase
in Q4 FY15 and stood at Rs. 3483.62 mn from Rs.
3351.80 mn over the corresponding quarter of
previous year.
During the quarter operating profit is Rs. 292.19 mn
as against Rs. 276.84 mn in the corresponding period
of the previous year, grew by 5.54%.
EPS of the company stood at Rs. 0.90 in Q4 FY15 as
against Rs. 0.58 in Q4 FY14, an increase of 55.52%.
During the quarter, PBT stood at Rs. 200.44 mn as
against Rs. 144.83 mn over the corresponding
quarter of previous year, an increase of 38.40%.
Total income during the quarter stood at Rs. 3491.84
mn as compared to Rs. 3351.80 mn in Q4 FY14,
registering a growth of 4.18%.
The company has recommended a Final Dividend of
60% i.e. Rs. 0.60 per equity share.
Net Sales and PAT of the company are expected to
grow at a CAGR of 9% and 17% over 2014 to 2017E
respectively.
PEER GROUPS CMP MARKET CAP EPS P/E (X) P/BV(X) DIVIDEND
Company Name (Rs.) Rs. in mn. (Rs.) Ratio Ratio (%)
Gabriel India Ltd 81.55 11713.84 4.18 19.52 3.60 105.00
Munjal Showa Ltd 171.70 6867.10 18.91 9.08 1.59 200.00
Federal-Mogul Goetze Ltd 445.80 24800.80 6.06 73.56 5.47 0.00
Amtek India Ltd 153.95 42791.50 6.60 23.33 1.73 0.00

2. QUARTERLY HIGHLIGHTS (PARENT BASIS)
Results Updates- Q4 FY15
The company’s net profit jumps to Rs. 129.55 million against Rs. 83.30 million in the corresponding quarter
ending of previous year, an increase of 55.52%. Revenue for the quarter rose by 3.93% to Rs. 3483.62 million
from Rs. 3351.80 million, when compared with the prior year period. Reported earnings per share of the
company stood at Rs. 0.90 a share during the quarter as against Rs. 0.58 over previous year period. Profit before
interest, depreciation and tax is Rs. 292.19 million as against Rs. 276.84 million in the corresponding period of
the previous year.
Break up of Expenditure
Months Mar-15 Mar-14 % Change
Net Sales 3483.62 3351.80 3.93
PAT 129.55 83.30 55.52
EPS 0.90 0.58 55.52
EBITDA 292.19 276.84 5.54
Break up of Expenditure
(Rs in millions)
Q4 FY15 Q4 FY14
%
CHNG
Cost of Materials
Consumed
2484.59 2447.86 2%
Purchase of Stock in Trade 35.91 12.29 192%
Employee Benefits
Expense
276.9 225.91 23%
Depreciation &
Amortization Expense
76.13 70.47 8%
Other Expenses 429.72 450.94 -5%

3. COMPANY PROFILE
Gabriel India was incorporated in 1961, is one of the 19 companies of Anand Group. Gabriel India is a renowned
brand synonymous with shock absorbers in India having established a significant presence across all automotive
customer segments: the OEMs, replacement market and exports. The company provides the widest range of ride
control products in India: shock absorbers, struts and front forks, across every automotive segment with over
300 product models on offer. Over the last fifty years, Gabriel India has earned the reputation of being a provider
of innovative and proprietary products and solutions that have become the company’s hallmark.
Products
• Shock Absorbers
• Front Forks
• Strut

4. FINANCIAL HIGHLIGHT (PARENT BASIS) (A*- Actual, E* -Estimations & Rs. In Millions)
Balance Sheet as at March 31, 2014 -2017E
FY14A FY15A FY16E FY17E
SOURCES OF FUNDS
Shareholder's Funds
Share Capital 143.67 143.67 143.67 143.67
Reserves and Surplus 2708.05 3110.67 3515.06 3972.01
1. Sub Total - Net worth 2851.72 3254.34 3658.73 4115.68
Non Current Liabilities
Long term Borrowings 95.65 58.40 47.89 41.66
Deferred Tax Liabilities 95.51 104.91 117.50 129.25
Long term Provisions 40.90 93.10 107.07 119.91
2. Sub Total - Non Current Liabilities 232.06 256.41 272.45 290.82
Current Liabilities
Short term Borrowings 468.46 0.00 0.00 0.00
Trade Payables 1571.66 1907.26 2174.28 2391.70
Other Current Liabilities 429.31 410.68 427.11 448.46
Short Term Provisions 307.77 335.14 358.60 376.53
3. Sub Total - Current Liabilities 2777.20 2653.08 2959.98 3216.70
Total Liabilities (1+2+3) 5860.98 6163.83 6891.16 7623.21
APPLICATION OF FUNDS
Non-Current Assets
a) Fixed Assets 2796.53 2707.61 2837.74 3020.96
b) Non-current investments 0.23 0.23 0.25 0.27
c) Long Term loans and advances 233.39 226.39 235.45 247.22
d)Other current assets 1.64 24.00 27.84 30.07
1. Sub Total - Non Current Assets 3031.79 2958.23 3101.28 3298.51
Current Assets
Inventories 1168.19 1121.40 1211.11 1295.89
Trade receivables 1360.80 1723.35 2154.19 2541.94
Cash and Bank Balances 47.12 38.85 44.68 50.04
Short-terms loans & advances 252.92 320.95 378.72 435.53
Other current assets 0.16 1.05 1.19 1.29
2. Sub Total - Current Assets 2829.19 3205.60 3789.88 4324.69
Total Assets (1+2) 5860.98 6163.83 6891.16 7623.21

5. Annual Profit & Loss Statement for the period of 2014 to 2017E
Value(Rs.in.mn) FY14A FY15A FY16E FY17E
Description 12m 12m 12m 12m
Net Sales 12866.08 14440.98 15885.08 17314.74
Other Income 56.33 43.12 47.43 50.28
Total Income 12922.41 14484.10 15932.51 17365.01
Expenditure -11962.14 -13276.50 -14614.27 -15920.90
Operating Profit 960.27 1207.60 1318.24 1444.11
Interest -89.96 -54.80 -46.03 -43.27
Gross profit 870.31 1152.80 1272.21 1400.84
Depreciation -270.73 -311.32 -348.68 -383.55
Exceptional Items -42.00 -6.00 0.00 0.00
Profit Before Tax 557.58 835.48 923.53 1017.30
Tax -131.59 -235.24 -265.98 -290.95
Net Profit 425.99 600.24 657.55 726.35
Equity capital 143.64 143.64 143.64 143.64
Reserves 2708.05 3110.67 3515.06 3972.01
Face value 1.00 1.00 1.00 1.00
EPS 2.97 4.18 4.58 5.06
Quarterly Profit & Loss Statement for the period of 30th Sep, 2014 to 30th June, 2015E
Value(Rs.in.mn) 30-Sep-14 31-Dec-14 31-Mar-15 30-Jun-15E
Description 3m 3m 3m 3m
Net sales 3845.02 3594.86 3483.62 3657.80
Other income 21.31 10.63 8.22 8.88
Total Income 3866.33 3605.49 3491.84 3666.68
Expenditure -3535.87 -3306.97 -3199.65 -3372.49
Operating profit 330.46 298.52 292.19 294.19
Interest -7.87 -13.87 -14.12 -12.43
Gross profit 322.59 284.65 278.07 281.76
Depreciation -78.74 -77.57 -76.13 -82.98
Exceptional Items -1.50 -1.50 -1.50 0.00
Profit Before Tax 242.35 205.58 200.44 198.78
Tax -68.06 -46.22 -70.89 -56.85
Net Profit 174.29 159.36 129.55 141.93
Equity capital 143.64 143.64 143.64 143.64
Face value 1.00 1.00 1.00 1.00
EPS 1.21 1.11 0.90 0.99

6. Ratio Analysis
Particulars FY14A FY15A FY16E FY17E
EPS (Rs.) 2.97 4.18 4.58 5.06
EBITDA Margin (%) 7.46 8.36 8.30 8.34
PBT Margin (%) 4.33 5.79 5.81 5.88
PAT Margin (%) 3.31 4.16 4.14 4.19
P/E Ratio (x) 27.50 19.52 17.81 16.13
ROE (%) 14.94 18.44 17.97 17.65
ROCE (%) 36.04 45.85 44.97 43.96
Debt Equity Ratio 0.20 0.02 0.01 0.01
EV/EBITDA (x) 12.74 9.72 8.89 8.11
Book Value (Rs.) 19.85 22.66 25.47 28.65
P/BV 4.11 3.60 3.20 2.85
Charts

7. OUTLOOK AND CONCLUSION
At the current market price of Rs. 81.55, the stock P/E ratio is at 17.81 x FY16E and 16.13 x FY17E
respectively.
Earnings per share (EPS) of the company for the earnings for FY16E and FY17E are seen at Rs. 4.58 and Rs.
5.06 respectively.
Net Sales and PAT of the company are expected to grow at a CAGR of 9% and 17% over 2014 to 2017E
respectively.
On the basis of EV/EBITDA, the stock trades at 8.89 x for FY16E and 8.11 x for FY17E.
Price to Book Value of the stock is expected to be at 3.20 x and 2.85 x for FY16E and FY17E respectively.
We recommend ‘BUY’ in this particular scrip with a target price of Rs. 94.00 for Medium to Long term
investment.
INDUSTRY OVERVIEW
The Indian auto components industry has experienced healthy sequential growth over the last one-and-a-half
years. The growth can be attributed to factors such as strong buoyancy in the end-user industry, recovery of the
global economy, improved consumer sentiment and return of adequate liquidity in the financial system. The
revival of the auto industry was initially driven by the fiscal stimulus programme of the government.
The industry currently accounts for almost seven per cent of India’s gross domestic product (GDP) and employs
about 19 million people, both directly and indirectly. The ever-increasing development in infrastructure, big

8. domestic market, increasing purchasing power and stable government framework have made India a favourable
destination for investment, as per the vision of Automotive Mission Plan (AMP) 2006–2016.
The Indian auto-components industry can be broadly classified into the organised and unorganised sectors. The
organised sector caters to the original equipment manufacturers (OEMs) and consists of high-value precision
instruments while the unorganised sector comprises low-valued products and caters mostly to the aftermarket
category.
The Indian auto component industry is expected to register a turnover of US$ 66 billion by FY 15–16 with the
likelihood to touch US$ 115 billion by FY 20–21 depending on favourable conditions, as per the estimates by
Automotive Component Manufacturers Association of India (ACMA). In addition, industry exports are projected
to reach US$ 12 billion by FY 15–16 and add up to US$ 30 billion by FY 20–21.
Outlook
The rapidly globalising world is opening new avenues for the transportation industry, generating the need for
more efficient, safe and reliable modes of transportation, which is subsequently adding to the auto component
industry’s growing opportunities. According to a report by the Confederation of Indian Industry (CII), the Indian
auto component industry is set to become the third largest in the world by 2025. Also, by that time, newer
verticals and opportunities for component manufacturers will open up as the automobile market will shift
towards electric, electronic and hybrid cars, and newer technologies will have to be adopted via systematic
research and development.
Indian auto component makers are well positioned to benefit from the globalisation of the sector as exports
potential could be increased by up to four times to US$ 40 billion by 2020.
Disclaimer:
This document is prepared by our research analysts and it does not constitute an offer or solicitation for the
purchase or sale of any financial instrument or as an official confirmation of any transaction. The information
contained herein is from publicly available data or other sources believed to be reliable but we do not represent that
it is accurate or complete and it should not be relied on as such. Firstcall Research or any of its affiliates shall not be
in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the
information contained in this report. Firstcall Research and/ or its affiliates and/or employees will not be liable for
the recipients’ investment decision based on this document.

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