Small Cap Auto Stock Is A “Buy” As It Gets Electric Vehicle Ready, 34% Upside Possible

Automotive demand is on the rise and many companies are likely to benefit from the same. Sharekhan has recommending buying the stock of Gabriel India, factoring in robust automotive demand.

Key positives for the stock of Gabriel India

According to Sharekhan some of the key positives for the Gabriel India stock was that gross margin expanded by 120 bps y-o-y to 24.4% and translated into 30 bps y-o-y expansion in EBIDTA margin to 7.2%. According to the firm, the revenue mix has improved on a y-o-y basis as revenue contribution from commercial vehicles and passenger vehicles has increased on a y-o-y basis. Revenue contribution from the PV/CV segment has increased from 21%/11% in Q3FY2022 to 24%/13% in Q3FY2023.

Buy the stock of Gabriel India with a price target of Rs 217 on the stock

The shares of Gabriel India were last seen trading at Rs 162 and Sharekhan has a target price of Rs 217, which means an upside potential of as much as 34% on the stock.

"The EV segment constitutes 4-5% of its total revenue. We remain positive on Gabriel, owing to its dominant position and brand recall in the suspension components of the domestic automotive industry and as it is a key beneficiary of improving automotive demand. Gabriel is focusing on the EV segment by building relationships with key OEMs engaged in e-2Ws, e-3Ws, and e-PV. We retain our Buy rating on the stock, with a 12-month price target of Rs. 217," the brokerage has said.

Gabriel India: A small cap stock

Gabriel India is a stock with a small market capitalization of Rs 2334 crores. The stock has hit a 52-week high of Rs 200.65 and the 52-week low of Rs 102.45 on the Bombay Stock Exchange. According to the management of the company Gabriel India is continuously evaluating for inorganic growth opportunities. The management is looking for a Rs. 100 crore kind of export revenue in FY2023.

Disclaimer

The stock has been taken from the brokerage report of Sharekhan with a few additions from our end. This is not a buy recommendation from Greynium or the author. Neither the brokerage house, nor Greynium Information Technologies Pvt Ltd, nor the author should be held liable for losses based on this article.