Mehabe score: 4 G Factor: 2 Piotski Score: 6 The stock has a rating OBSERVE & HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 2 and Piotski score of 6.
Description
Gabriel India is part of ANAND Group. From being a single-product company in 1961, we have transformed ourselves in line with changing market, technical and social trends and played a key role in limiting emissions of ride control products and foster the cause of environmental protection. Company manufactures over 300 models of ride control products. Its products include shock absorbers, struts, front forks and others.
It has a vision to be amongst top 5 shock absorber manufacturers in the world by 2025.
Stock trades at 128.0, above its 50dma 119.92. It also trades above its 200dma 111.95. The stock remains bullish on techicals
The 52 week high is at 135.00 and the 52week low is at 80.80
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
– has been maintaining a healthy dividend payout of 22.81%
-Promoter holding has increased by 2.25% over last quarter.
Weakness
– The company has delivered a poor sales growth of 3.51% over past five years.
– has a low return on equity of 12.62% for last 3 years.
Competition
– The industry trades at a mean P/E of 33.4x. WABCO India trades at the industry’s max P/E of 133.42x. GABRIEL trades at a P/E of 33.8x
– Industry’s mean G-Factor is 3.6 while the mean Piotski score is 7.0. GABRIEL has a G-Factor of 2 and Piotski scoreof 6.
– Average 1 month return for industry is 2.1%. The max 1- month return was given by Minda Industries: a return of 15.19 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 581.0 cr compared to Rs 425.0 cr for period ended Mar 2020, a rise of 36.7%
Operating Profits reported at Rs 49.0 cr for period ended Mar 2021 vis-vis 33.0 for period ended Mar 2020 .
Operating Margins expanded 66.9 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 1.93 compared to Rs 1.63 for previous quarter ended Dec 2020 and Rs 1.84 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 1700.0 cr for period ended Mar 2021 vis-vis sales of Rs 1870.0 cr for the period ended Mar 2020, a fall of 10.0%. The 3 year sales cagr stood at -2.5%.
Operating margins shrank to 6.0% for period ended Mar 2021 vis-vis 7.0% for period ended Mar 2020, contraction of 100.0 bps.
Net Profit reported at Rs 54.0 cr for period ended Mar 2021 vis-vis sales of Rs 85.0 cr for the period ended Mar 2020, falling 57.4%.
Company reported a poor Net Profit CAGR of -16.9% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 204.0 cr for period ended Mar 2021 vis-vis Rs 120.0 cr for period ended Mar 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was 8.0% compared to 13.0% over the last 3 Years. – The stock has given a return of 37% on a 1 Year basis vis-vis a return of -5% over the last 3 Years. – The compounded sales growth on a TTM bassis is -9% vis-vis a compounded sales growth of -2% over the last 3 Years. – The compounded profit growth on a TTM basis is -35% vis-vis a compounded profit growth of -17% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 3.83% vis-vis 4.27% for Dec 2020 – Public shareholding has risen for the period ended Mar 2021. The Mar 2021 public holding stood at 34.6% vis-vis 31.67% for Dec 2020
Conclusion
– is almost debt free.
– has been maintaining a healthy dividend payout of 22.81%
-Promoter holding has increased by 2.25% over last quarter. – The company has delivered a poor sales growth of 3.51% over past five years.
– has a low return on equity of 12.62% for last 3 years.
Fundamentally, the stock remains weak on business fundamentals. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock trades above its 50 DMA 119.92 and is trading at 128.0 It has shown near term bullish momentum contrary to business fundamentals. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
