Gabriel India Ltd. has given a 391% return on a year on year basis as the Auto Ancillary Stocks have rallied on recovery of the Auto sales in the current financial year 2014-15. We had published the analysis when the stock was trading at Rs.22.9 per share and the current market price of the stock is at Rs.85.8 per share.
Gabriel India Ltd. (GIL) a flagship company of the Anand Group commenced operations in the year 1961 and is specialised in the manufacture of Ride Control products in India that include Shock Absorbers, Struts and Front Forks for Passenger Cars, Utility Vehicles, Commercial Vehicles and Two Wheelers. The company is a pioneer in the manufacture of Ride Control products in the Shock Absorber category in India. The products of the company are sold in the domestic market in all segments of the automobile industry in the OEM category as well as the replacement market along with exports. The company has manufacturing facilities at seven locations, Pune, Nasik, Hosur, Dewas, Gurgaon, Parwanoo and Sanand in India and has opened up an office in China in March 2013. The company has a combined capacity of over 24 million shock absorbers, struts and 2.7 million front forks that make it the largest automotive OEM supplier in India. The company also supplies products to the Defence and the Railways sector in India.
The company has three well equipped state of the art R&D centres located in Pune, Hosur and Nasik that have been accorded recognition by the Department of Scientific and Industrial Research, Ministry of Science and Technology. The company has developed new products in these facilities and some of the notable ones are shock absorbers for passenger cars like Honda Brio, M&M XUV 500 and VW Polo. The company has technical collaborations with KYB Corporation in Japan and Spain for manufacture of products that are supplied to Toyota in Corolla Altis and Innova. KYB Corporation is a renowned manufacturer of ride control products in Japan that supplies products globally. GIL also has collaboration with Yamaha Motors in Japan for development of two wheeler applications.
GIL supplies to every vehicle manufacturer in India and commands a market share of 80% in the Commercial Vehicle segment followed by 45% in the Passenger Car segment and 19% in the Two Wheeler segment. Slowdown in the demand for vehicles has affected the demand for products from the automotive OEMs in the current financial year.
The Company reported Sales of Rs.11,960 million with an EBITDA of Rs.807 million and a net profit of Rs.381 million in FY 2012-13. The EBITDA margin was 6.74% and the net profit margin was 3.18% for FY 2012-13. The company has recorded positive cash flows for the year ended FY 2012-13. The Exports accounted for 3.47% of the total sales for the year ended FY 2012-13. The replacement market recorded a robust growth of 15% by achieving revenues of Rs.1187 million in FY 2012-13 as compared to the previous year. The company reported a net profit of Rs.115 million with revenues of Rs.3170 million for the quarter ended September 2013. The Earnings per share was reported at Rs.2.65 and the Return on Capital Employed (RoCE) was reported at 18.38% and the Return on Equity at 16.37% for FY 2012-13.
The raw materials account for 66.2% of the total operating cost followed by other expenses at 12.4%, excise duty at 9.5%, Personnel expenses at 6.9%, depreciation and retained earnings at 2.1% each and remaining for tax and dividend.
The company had a debt to equity ratio of 0.26 at the end of FY 2012-13 and has a current market capitalization of Rs.3297 million with a Price to Earnings multiple of 8.62 at Rs.22.9 per share. The Price to Book Value is 1.28 and the Market Capitalization to Sales ratio is 0.27. The company had declared a final dividend of 45% of Rs.0.45 per share (FV Re.1) for the year ended March 2013. The Company has declared an interim dividend of 35% of Rs.0.35 for FY 2013-14. The Promoters have a shareholding of 54.63% and the FIIs have a shareholding of 5.59% in the company.
