Couple of years back, the March 2022 quarter was a bad one for the company, with fall in profits YoY and QoQ. The stock corrected and languished at those levels for 6 months. All this, while the management had expansion plans and was targetting the 2000cr sales target in the upcoming years. Sometimes while tracking the yoy’s and qoq’s we miss the forest for the trees. Especially when we have followed/invested in the company for two years or more and know its upcoming plans. The company has had a significant uptick in employee expenses and depreciation. Assets under Property, plant and equipment has gone up from 380cr to 675cr, indicating a significant expansion. I think we as investors need to give management the time to execute and be patient. Of course it all depends on how well they execute. Now if we start wondering why the stock fell 15% and not 5%, it’s a problem that needs to be handled by daily price watchers, including myself.

Gabriel India –

Q4 and FY 24 results and concall highlights –

Q4 outcomes –

Revenues – 858 vs 737 cr, up 16 pc
Gross margins @ 25.1 vs 23.7 pc
EBITDA – 77 vs 52 cr, up 47 pc ( margins @ 9 vs 6 pc )
PAT – 53 vs 34 cr, up 55 pc

FY 24 outcomes –

Revenues – 3342 vs 2971 cr, up 9 pc
Gross margins @ 25.1 vs 23.7 pc
EBITDA – 293 vs 213 cr, up 37 pc ( margins @ 9 vs 7 pc )
PAT – 185 vs 132 cr, up 40 pc

Net cash position – 300 cr

Last 10 yr sales CAGR @ 9.8 pc
Last 10 yr PAT CAGR @ 13.3 pc

Segment wise sales mix –

2W – 61 pc
PVs – 25 pc
CVs – 12 pc
Trading – 2 pc

Channel wise sales mix –

OEM sales – 86 pc
After Mkt sales – 11 pc

PV market did well in FY 24 on the back of strong SUV sales. CV sales were flat for FY 24. Expecting a CV sales pick up after monsoons

2W+3W sales did well in FY 24 crossing 2cr vehicles sold ( last time this happened was in FY 20 )

Company is supplying to almost 100 pc requirements of leading EV 2-wheeler customers – OLA, TVS – Electric and Ather

Company does supply to all 3W makers – Bajaj, Atul and TVS

Company’s sunroof plant commenced operations in Q4. Did a sales for 59 cr and reported a positive EBITDA for the same. Company sold 23k sunroofs in Q4. That translates to Rs 24k / sunroof

Likely to sell > 10k sunroofs in Q1. Company is supplying to both Kia and Hyundai. Company intends to generate mid teens EBITDA margins from this unit before FY 26. Current capacity of the plant is around 2 lakh sunroofs / Yr. Once the company is able to sell 2 lakh sunroofs / yr, the annual revenue run rate should be > 400 cr from this vertical

There has been a slowdown in the 2W EV sales post 31 Mar due ending of FAME – II incentives. However, since the prices of Li-Ion batteries are continuously coming down, this slowdown should be temporary

Company’s sales from EV-2W in FY 24 were around 150 cr

Company to start supplying the shock absorbers for the new Swift wef FY 26. Likely to do an annual revenue of 90-100 cr from this business

Company expects to do an EBITDA margins of 10 pc for full FY 25

Company is gonna supply cabin Dampeners to DAF for the European + Brazilian Mkts wef late FY 25. This has the potential to be a 25 cr / yr kind of business. Company is also hoping to get orders for Axle dampers from DAF. That can potentially open up a big mkt for the company

Company is in active talks with 2 PV OEMs for exports. Likely to receive orders by end of FY 25. Revenues may accrue only in FY 27

Company is expecting a mid-teens growth from the after sales mkt. Company has also launched brake pads in the after sales mkt – leveraging the Gabriel Brand

Disc: holding, biased, not SEBI registered

That was my point. Company executed an order against letter of intent and not an actual purchase order. If they don’t have purchase order they won’t get paid as it’s not in the system, which will impact collection.

Q3 numbers are without BSL figures. Q4 results look good, however market is reacting negatively.

12 months not 3 years according to this article. 7.7% stake sale in another 1 year is causing this stock hit 52 week low.

“It now holds 82.7% in Route Mobile and has about 12 months, as per Sebi guidelines, to cut its stake down to 75% to ensure the public holding in the company is at least 25%.”