Gabriel India Share Price Target at Rs 1,400: Anand Rathi Research
Anand Rathi Share and Stock Brokers Limited has issued a BUY recommendation on Gabriel India, underscoring the company’s transformative group consolidation, robust earnings outlook, and aggressive growth strategy. The brokerage sets a target price of Rs 1,400, reflecting a bullish stance on Gabriel’s ability to unlock synergies, accelerate EPS growth, and emerge as the Anand Group’s automotive spearhead. This report delves into the rationale behind the call, the mechanics of the consolidation, Gabriel’s financial trajectory, and the strategic roadmap that could reshape the company’s valuation and investor returns.
Gabriel India’s Strategic Leap—A Buy for the Next Decade
Gabriel India is at an inflection point, according to Anand Rathi, who has upgraded the stock to a BUY with a target price of Rs 1,400. The catalyst is a sweeping group consolidation, which will see Gabriel absorb stakes in several Anand Group entities, boosting its EPS and market relevance. This move is projected to unlock significant value through operational synergies, expanded product portfolios, and enhanced M&A capabilities. With a consolidated revenue target of Rs 500 billion by 2030 and an ambitious M&A pipeline, Gabriel is poised to become the group’s growth engine. Investors are advised to monitor consolidation timelines and execution risks, but the upside potential remains compelling.
Research House Recommendation and Target Levels
Anand Rathi Share and Stock Brokers Limited recommends a BUY on Gabriel India, setting a 12-month target price of Rs 1,400 per share. The stock currently trades at Rs 952, with a 52-week high/low of Rs 1,011/387. The brokerage’s target is based on a sum-of-the-parts valuation, factoring in consolidated FY27e EPS, future group consolidation, and M&A potential.
Strategic Group Consolidation: The Game Changer
Gabriel India is executing a landmark consolidation, acquiring significant stakes in key Anand Group companies:
25.1% in Dana Anand
49% in Henkel Anand
76% in Anand CY Myutec Automotive
100% in Anchemco India
This consolidation will add Rs 41 billion in revenues and Rs 1.82 billion in attributable PAT as of FY25. The transaction is expected to be EPS-accretive by 41% in FY25 and 33% in FY27, fundamentally altering Gabriel’s earnings profile and market positioning.
Financial Highlights and Key Metrics
Gabriel’s consolidated financials paint a picture of accelerating growth and improving profitability:
FY27e Sales: Rs 60,717 million
FY27e Net Profit: Rs 5,765 million
FY27e EPS: Rs 32.5
FY27e P/E: 29.3x
FY27e RoE: 20.5%
Net debt/equity remains comfortably negative, underscoring balance sheet strength.
Table: Key Financial Metrics (Consolidated)
| Metric | FY24 | FY25 | FY26e | FY27e |
|---|---|---|---|---|
| Sales (Rs m) | 34,026 | 40,634 | 47,970 | 60,717 |
| Net Profit (Rs m) | 1,787 | 2,450 | 2,868 | 5,765 |
| EPS (Rs) | 12.4 | 17.1 | 20.0 | 32.5 |
| P/E (x) | 76.5 | 55.8 | 47.7 | 29.3 |
| RoE (%) | 17.8 | 22.4 | 22.1 | 20.5 |
EPS Accretion and Shareholder Value Creation
The consolidation is projected to drive substantial EPS accretion:
Post-scheme FY25 EPS: Rs 24.1 (vs Rs 17.1 pre-scheme)
Post-scheme FY27 EPS: Rs 32.0 (vs Rs 24.0 pre-scheme)
EPS accretion: 41% in FY25, 33% in FY27
Shareholding will shift post-merger:
Promoters: 63.5%
Free float: 36.5%
New shares issued to promoters: 33.6 million, taking total shares to 177.2 million.
Valuation Framework and Peer Comparison
Anand Rathi’s sum-of-the-parts valuation methodology:
32x on consolidated FY27e EPS of Rs 32.5 (Rs 1,040)
Rs 260 for future group consolidation
Rs 100 for M&A potential
Gabriel’s valuation remains attractive relative to peers, with a 38% EPS CAGR projected for FY25-27.
| Company | FY27e P/E (x) | EPS CAGR FY25-27 (%) | Target Price (Rs) |
|---|---|---|---|
| Apollo Tyres | 13 | 31 | 520 |
| Balkrishna Industries | 23 | 15 | 2,800 |
| Gabriel India | 29 | 38 | 1,400 |
| UNO Minda | 46 | 21 | 1,075 |
Strategic Roadmap: Growth Drivers and Expansion Plans
Gabriel is positioned as the Anand Group’s automotive growth engine, with a Rs 500 billion revenue target by 2030.
The company aims to accelerate M&A activity, targeting Rs 150 billion in incremental revenue via acquisitions by 2030.
New product segments (e.g., sunroofs, aluminum forging for EVs) and partnerships (e.g., Inalfa Roof Systems) diversify revenue streams and mitigate concentration risk.
The company’s strong presence in two-wheelers and growing footprint in PV/CV segments will be leveraged to support new entities and drive scale.
Risks and Investor Watchpoints
Key risks include:
Potential delays in further group consolidation
Slower-than-expected growth in core segments or new product lines
Execution risk in M&A and integration
Adverse commodity price movements
Despite these risks, the current valuation offers a compelling risk-reward profile for investors with a medium- to long-term horizon.
Investment Levels and Actionables for Long Term Investors
Gabriel India is a high-conviction BUY with a 12-month target of Rs 1,400, representing a significant upside from current levels. Investors are advised to accumulate the stock on dips, with key support at Rs 900 and resistance at Rs 1,011 (52-week high). The stock’s re-rating potential is anchored in robust EPS growth, operational synergies, and a clear roadmap for value creation through consolidation and M&A.
Gabriel’s transformation into the Anand Group’s flagship automotive platform is underway. For investors seeking exposure to India’s auto components sector with a blend of growth and strategic clarity, Gabriel India stands out as a compelling bet.
