Executive Summary:
Gabriel India Limited (Gabriel), the flagship listed entity of the ANAND Group, is currently executing one of the most significant strategic pivots in its 60-year history. Traditionally known as a steady-compounder in the ride control segment (shock absorbers and struts), the company is aggressively transforming into a diversified auto-tech player. This transformation is anchored in its entry into the high-growth sunroof market through a joint venture with Inalfa Roof Systems and a comprehensive corporate restructuring that consolidates high-value group assets under the listed entity.
Despite sectoral headwinds in the broader auto industry during FY25, Gabriel has demonstrated remarkable resilience. The company reported its highest-ever quarterly revenue in Q2 FY26 (ended September 2025), growing 15% YoY to INR 1,180 crore. This performance was underpinned by its dominant market leadership, holding ~32% market share in 2-Wheeler (2W) suspension and a near-monopoly (~89%) in Commercial Vehicle (CV) suspension.
The investment thesis is built on three robust pillars:
- Diversification Success: The sunroof business (Inalfa Gabriel Sunroof Systems) has rapidly scaled, already turning EBITDA positive with double-digit margins and a confirmed order book nearing INR 1,000 crore.
- Structural Corporate Simplification: The recently approved scheme to merge group entities (including profitable ventures like Dana Anand and Henkel Anand) into Gabriel is expected to be significantly EPS accretive (estimated ~38% on a pro-forma basis) and simplifies the holding structure.
- EV Agnostic Resilience: Gabriel’s core portfolio is powertrain-agnostic, and its proactive wins with EV leaders (Ola Electric, TVS, Ather) ensure it remains a beneficiary, not a victim, of the electrification trend.
Company Overview:
Business Description:
Incorporated in 1961, Gabriel India is a pioneer in the Indian auto component industry. It manufactures over 500 models of ride control products, including shock absorbers, struts, and front forks. It operates across four key segments: 2-Wheelers & 3-Wheelers (2W/3W), Passenger Vehicles (PV), Commercial Vehicles (CV) & Railways, and the Aftermarket.
Manufacturing Footprint:
The company operates seven manufacturing plants across India (including Chakan, Nashik, Hosur, and Parwanoo) and three satellite facilities, ensuring proximity to major OEM clients. Its R&D centers in Chakan and Hosur are recognized by the Department of Scientific and Industrial Research (DSIR).
Key Clients:
- 2W/3W: TVS Motor, Yamaha, Suzuki, Honda, Royal Enfield, Bajaj Auto, Ola Electric, Ather Energy.
- Passenger Vehicles: Maruti Suzuki, Volkswagen, Tata Motors, Mahindra & Mahindra, Toyota.
- Commercial Vehicles: Tata Motors, Ashok Leyland, Volvo Eicher, Daimler India.
- Railways: Indian Railways (sole supplier for LHB and Vande Bharat dampers).
Industry & Competitive Analysis:
Auto Component Sector Dynamics:
The Indian auto component industry is undergoing a structural shift driven by premiumization (consumers preferring feature-loaded SUVs) and electrification. The ride control market is consolidated, with high entry barriers due to safety-critical requirements and deep OEM relationships.
Competitive Positioning:
- 2W Segment: Gabriel is the market leader with ~32% share. Its primary competitor is Endurance Technologies, which has a strong foothold in the Bajaj ecosystem. However, Gabriel’s client base is more diversified.
- PV Segment: Gabriel holds ~24% market share. It competes with global giants like Monroe (Tenneco) and Mando. The entry into sunroofs provides a unique differentiator, moving Gabriel up the value chain from a component supplier to a system supplier.
- CV & Railways: Gabriel enjoys a near-monopoly (~89% share) in CVs and 100% share in specific railway applications, providing a stable cash flow moat that competitors find difficult to breach.
The “Sunroof” Opportunity:
The Indian sunroof market is exploding, with penetration expected to rise from ~25% to 40% by FY27. By partnering with Inalfa (global #2 in sunroofs), Gabriel has leapfrogged the development curve. Unlike competitors who import kits, Gabriel’s localization strategy allows for better margins and faster turnaround for OEMs.
Financial Performance Review: Q2 FY26 & H1 FY26
Revenue Growth:
In Q2 FY26, Gabriel reported consolidated revenue of INR 1,180 crore, a robust 14.9% YoY increase.
- Segmental Drivers: The 2W/3W segment grew 15%, outpacing industry volume growth due to higher realizations from premium forks. The PV segment grew 13%, driven by the ramp-up of sunroof supplies. The CV & Railways vertical was the standout performer with 35% growth, benefiting from the cyclical upturn in trucking and increased railway tenders.
- H1 FY26 Performance: For the first half of the fiscal year, revenue stood at INR 2,279 crore, up 15.5% YoY, putting the company firmly on track to cross the INR 4,800 crore milestone for the full year.
Profitability:
- EBITDA: Consolidated EBITDA for Q2 FY26 rose 17.7% YoY to INR 116 crore.
- Margins: EBITDA margins expanded by 20 basis points to 9.8%, despite raw material volatility. This resilience is attributed to the “CORE 90” cost-reduction program, which has optimized manufacturing processes and reduced waste.
- PAT: Net Profit grew 9.7% YoY to INR 69 crore. The growth was slightly lower than EBITDA growth due to higher depreciation (INR 19 crore vs INR 16 crore YoY) related to the new sunroof plant and capacity expansion in Chakan.
Sunroof Subsidiary Performance:
Inalfa Gabriel Sunroof Systems (IGSSPL) delivered revenue of INR 114 crore in Q2 FY26 with an EBITDA margin of 16.5%. This significantly accretive margin profile confirms that the diversification is value-enhancing, not dilutive.
Strategic Developments & Corporate Restructuring
The Restructuring Scheme:
In mid-2025, Gabriel announced a composite scheme of arrangement to consolidate the auto-component assets of the ANAND Group.
- The Plan: Asia Investments Pvt Ltd (AIPL) will merge its auto component investments—including Dana Anand (drivetrains/e-axles), Henkel Anand (adhesives/NVH), and ANAND CY Myutec (synchronizer rings)—into Gabriel India.
- Impact: This moves Gabriel from being a single-product company to a diversified auto-systems provider.
- Accretion: Pro-forma estimates suggest the merged entity would have had FY25 revenues ~70% higher than standalone Gabriel, with EPS accretion estimated at ~38%. This transforms the valuation framework for the company.
JV Restructuring with Inalfa:
In November 2025, Gabriel renegotiated its JV terms with Inalfa Roof Systems.
- Majority Stake: Gabriel now retains a 65% stake (up from a planned minority position), ensuring it captures the bulk of the profits and consolidates the subsidiary’s financials.
- Strategic Control: This move was necessitated by regulatory hurdles (PN3 norms) for Inalfa’s direct investment but has turned into a blessing, giving Gabriel greater control over a high-growth asset.
ESG & Sustainability:
Gabriel has been rated highly by domestic ESG rating agencies.
- Environment: The company aims to be water-neutral by 2030 and has increased renewable energy usage across its plants.
- Governance: The board composition is robust, with significant independent director representation. The transparent handling of the restructuring scheme (with fair valuation reports from KPMG/BDO) reinforces investor trust.
Forward-Looking Outlook & Projections
Growth Assumptions (FY26E – FY28E):
- Revenue CAGR: We project a consolidated revenue CAGR of 18% over FY25-28E. This assumes organic growth of ~10-12% in the base business and the remaining driven by the sunroof ramp-up and consolidation effects.
- Margin Expansion: We expect EBITDA margins to improve from ~9.8% currently to 11.5% by FY28E. Key drivers include operating leverage from the sunroof plant (which has high fixed costs but high contribution margins) and the inclusion of higher-margin businesses like Henkel Anand (adhesives).
Financial Estimates:
Consolidated Financial Projections (INR Crore)
| Particulars | FY25 (Actual) | FY26E (Proj) | FY27E (Proj) | FY28E (Proj) |
| Net Sales | 4,063 | 4,850 | 5,650 | 6,550 |
| EBITDA | 390 | 485 | 620 | 753 |
| EBITDA Margin | 9.6% | 10.0% | 11.0% | 11.5% |
| Net Profit | 245 | 276 | 352 | 445 |
| EPS (INR) | 17.1 | 19.2 | 24.5 | 30.9 |
| RoE (%) | 18.3% | 19.5% | 21.0% | 22.5% |
Key Risks & Mitigants
- Client Concentration Risk: A significant portion of revenue is derived from Maruti Suzuki and TVS Motor. Mitigant: The company has successfully added new clients like Ola, Ather, and Tata Motors (for PVs), reducing dependence on any single OEM.
- EV Disruption in Powertrain: While suspension is neutral, the shift to EVs could impact the legacy exhaust-related products of the group (though Gabriel standalone is safe). Mitigant: The merger brings in Dana Anand, which specializes in EV drivetrains, effectively hedging this risk.
- Execution Risk on Merger: The integration of multiple entities could face teething troubles or cultural mismatch. Mitigant: All entities are part of the same ANAND Group parentage, sharing similar work cultures and management philosophies.
Conclusion:
Gabriel India is no longer just a shock absorber company; it is evolving into a comprehensive auto-tech solutions provider. The “Portfolio Defense” provided by its dominant legacy business, combined with the “Growth Offense” of sunroofs and the restructuring-led value unlocking, creates a compelling investment case.