Gabriel India Ltd is favourably positioned as key clients in ICE & EV gaining market share! Buy for target price of Rs 341 (20% upside): SMIFS

A slight miss in Q2 as margins were lower than expectation due to poor mix. However, reported highest quarterly Revenue/EBITDA/PAT in Q2 with strong FCF generation in H1. The company has been outperforming the auto industry growth since multi-quarters, and this traction should continue as its key clients in 2W ICE/EV & PV has been gaining share, and Gabriel has been winning new orders. The combination of 1) high margin FSD tech in PVs, 2) growing % contribution from 2W EVs, 3) CORE90 program benefits, 4) expectation of getting compensation from PV OEMs, 5) winning new business in high margin SUVs, and 6) operating leverage benefits will keep improving its margin in the coming quarters/years ahead. Sunroof business to add new wings to fly higher, more new techno-agnostic product additions are on cards to keep driving earnings. We are strongly convinced of the company’s competitive position, and is well placed for the mid-to-long term growth opportunities. It’s a debt-free and has always generated positive cash flows in the last 11 years. The stock is trading at P/E of 18.3x Sept 2025 estimated EPS of Rs 18.6. Gabriel has strong growth prospects with healthy return profile, we have assigned a multiple of 22x to its Sept 2025 estimated EPS to arrive at a fair value of Rs 409 a piece. Our estimates largely remain intact. Maintain BUY!