Hold Gabriel India; target of Rs 145: Sharekhan
Sharekhan’s research report on Gabriel India
Gabriel’s Q4FY19 results significantly missed estimates as higher commodity costs and OEM pricing pressure dented margins. Earnings growth to turn negative in FY2020 due to slowing OEM demand and margin contraction due to pricing pressures and adverse mix. Cut FY20 estimates by 18; rollover multiple on FY21 earnings. Rich valuations of 21.9x and 19.4x its FY20/FY21 earnings limit upside scope.
We retain Hold rating on Gabriel India Limited (Gabriel) with an unchanged PT of Rs 145.
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