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Gabriel India: Transiting into a new orbit fair value pegged at Rs 1000 per share

ICICIdirect Research 04 Jul 2025 DISCLAIMER

Gabriel India has announced that entities owned by the parent Anand group and are operating in auto domain are set to merge into Gabriel India Ltd.
Gabriel India did sales of ~₹ 4,000 crore for the group which includes both shock absorbers and sunroof. Post-merger Gabriel’s addressable sales base will expand from ~₹4,000 crores to ~₹8,000 crores (40% of group revenues), however since all is not 100% owned, actual sales addition will be limited in nature.

Effective PAT accretion due to this transaction is pegged at ~₹ 180 crore for which company shall be issuing 3.36 crore shares of Gabriel India to the promoter entity (stake rising from 55% to 63.5%).

Transaction is executed at inexpensive valuations of ~13x PE & ~8x EV/EBITDA on trailing basis and is EPS accretive in nature from day 1.
This strategic realignment is a significant positive for Gabriel India, as it diversifies the company beyond its legacy shock absorber business & will now be the main growth engine for automotive business for the group amidst its overall ambition to take group turnover from 20,000 presently to ~₹50,000 crore by 2030.

Consolidated PAT for Gabriel India post this merger is calculated as ~₹ 600 crore (FY27E) which implies a P/E multiple of ~29x on FY27E basis (post equity dilution), capping the upside potential.  

Though we appreciate minority shareholder friendly transaction by the promoter group and possibility of potential such mergers in future as well, however as things stand today, we don’t see further meaningful upsides & henceforth assign HOLD rating on the stock with SoTP based target price of ₹ 1,000 valuing the combined entity at 30x PE on FY27E. 

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