Gabriel India Limited Q1 FY27 Earnings Call Summary

Event Participants

Executives

4 Atul Jaggi (MD, Ride Control), Mahendra Goyal (Group CEO & MD), Manish (Anand Group - Finance), Mohit (Finance)

Analysts

13 Aditya Khetan (SMIFS Institutional Equities), Amit Hiranandani (PhillipCapital), Jay Kale (Elara Capital), Jayesh Gandhi (Harshad H Gandhi Securities), Mumuksh Mandlesha (Anand Rathi Institutional Equities), Naman (Sanghvi Family Office), Pratik Bhayani (Union AMC), Radha (Motilal Oswal), Rakesh Jain (Axis AMC), Shashank Kanodia (ICICI Securities), Shweta Sharma (Arihant Capital), Viraj (SiMPL), Viraj Sanghvi (Ambit Capital)

Financials & KPIs

Geographic & Segment Commentary

• Core Suspension (India): Revenue growth of 19% YoY supported by healthy demand across core suspension and continued aftermarket growth; PV business grew only ~5.5% vs industry production +17% due to unfavorable model mix — presence skewed to smaller cars (which grew faster than the market) while absent on several high-selling UV platforms.
• Aftermarket: Continued growth through Q1 FY27, contributing to standalone momentum alongside the Anchemco high-performance chemicals and fluids business added via restructuring.
• Sunroof: Q1 volumes hit by an operating issue at a Hyundai Mobis supplier that disrupted Hyundai Creta production, costing ~15,000–20,000 units; Hyundai is pulling volumes to recover the gap through Q2/Q3, with no full-year shortfall expected.
• HL Mando Anand (Braking, Steering, Suspension - PV): FY26 turnover of ₹5,886 crore, PAT of ₹358 crore, net worth of ₹1,924 crore; ~40% of business now from non-Korean OEMs (Tata Motors, Mahindra, Maruti Suzuki) and exports ~7–8% of sales; Gabriel acquiring 28.99% stake for ₹2,231 crore under Project Jupiter.
• HL Klemove India (ADAS/Automotive Electronics): FY26 revenue of ₹1,000+ crore, PAT of ₹123 crore, adjusted EBITDA ~₹129 crore (unaudited); customers include Mahindra and Tata Motors alongside Korean OEMs; Chennai-based manufacturing; Gabriel acquiring 30% minus one share for $98.44 million.
• Joint Ventures & Associates (Dana Anand, Henkel Anand, SK Enmove Gabriel): Combined share of profit rose 10% YoY to ₹43 crore in Q1 FY27; Henkel impacted by Middle East-linked commodity changes, with recoveries to flow through future profitability.
• Exports: HL Mando exports currently ~7–8% of sales; management targeting ~10% of sales over the coming timeline across auto shock absorbers, solar, and e-bike, supported by partners' plans to make India a manufacturing hub.

Company-Specific & Strategic Commentary

• Project Rise (Completed): Gabriel acquired stakes in Dana Anand and Henkel Anand, 76.1% of Anand CY Myutec, and merged Anchemco's chemicals/fluids business — raising its share of group sales to 58% and accelerating EPS; stock exchange listing approval is pending.
• Project Jupiter (New): Board approved acquisition of 28.99% of HL Mando Anand (₹2,231 crore — 1.44 crore fresh shares at ₹1,305.89/share aggregating ₹1,881 crore plus ₹350 crore cash) and 30% minus one share of HL Klemove India ($98.44 million in two tranches: $73.83 million by Sept 15, 2026 and $24.61 million within 18 months); positions Gabriel as Anand Group's primary growth and consolidation platform with ~70% of group sales.
• Integrated ADAS Positioning: Gabriel aims to be a unique Indian supplier offering integrated braking + steering + ADAS solutions, leveraging HL Mando's braking/steering and HL Klemove's ADAS electronics, with engineering support from India and Korea-based centers.
• FY2030 Group Vision: Group targeting ₹50,000 crore revenue by 2030 with growth across PV, CV, two-wheelers, and off-highway; ANEVOL EV vertical progressing; management open to bringing remaining group businesses into Gabriel "as appropriately fitting."
• Capacity Expansion: Plant expansions underway at Hosur, Khandsa (Gurgaon), and Sanand, plus suspension technology investments, linked to the media-reported ₹180 crore expansion plan.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

HL Group Relationship & Strategic Rationale

• Question: What is driving the expanding relationship with HL Group (Mando, Klemove), and are there options to increase stakes further? (Mumuksh Mandlesha; Jayesh Gandhi)
• Answer: Relationship goes back 30 years to 1996, starting with brakes and expanding to suspension and steering; HL Mando Anand has become the group's largest company (₹5,500–6,000 crore turnover) on mutual trust. HL Group has spent 7–8 years building ADAS capabilities and sees Gabriel as its trusted India partner. No future stake options are in the agreements, but "everything can be discussed" — partners may need cash as India grows. (Mahendra Goyal)

HL Klemove Growth & Customer Traction

• Question: What is the medium-term growth outlook, key customers, and pipeline for HL Klemove? Will it continue selling primarily to HL Mando? (Mumuksh Mandlesha; Viraj Sanghvi)
• Answer: Pipeline is very strong; beyond Korean customers, HL Klemove already works with Mahindra and Tata Motors — including on newly launched Mahindra vehicles. Per-vehicle content is large (₹20,000–₹70,000), so turnover can scale significantly in a few years and "make a significant difference" to the ₹50,000 crore by 2030 journey. HL Klemove will continue supplying HL Mando, but the strategy is to grow independent third-party business. (Mahendra Goyal; Atul Jaggi)

Localization & Competitive Positioning

• Question: How deep is localization in the acquired entities versus peers, and what is the opportunity beyond Korean OEMs? (Jay Kale)
• Answer: HL Mando is well-localized — ~40% of business now comes from non-Korean OEMs (Tata Motors, Mahindra, Maruti Suzuki), significantly reducing Korean dependency. HL Klemove localization will start as the industry moves; Mahindra and Tata business is already secured, and the Maruti opportunity will emerge as it adopts ADAS. (Mahendra Goyal)

FY2030 Vision & Consolidation Roadmap

• Question: How should we think about segment mix in the ₹50,000 crore FY2030 target, and will the remaining ~30% of group sales be consolidated? (Jay Kale; Pratik Bhayani; Shashank Kanodia)
• Answer: No bias toward any segment — growth spans PV, CV, two-wheelers, and off-highway; EV vertical ANEVOL is progressing. Gabriel reaches ~70% of group sales after Project Jupiter (vs 58% after Project Rise); the remaining ~30% will be brought into Gabriel "as appropriately fitting" from strategy and partner perspectives, with no committed timeline. CapEx expansions at Hosur, Khandsa, and Sanand plus suspension technology investments support the growth plan. (Mahendra Goyal; Atul Jaggi)

JV Performance: Henkel, Myutec & Sunroof

• Question: Why did the Henkel and Myutec JVs see subdued growth and profit degrowth in FY26? (Viraj, SiMPL)
• Answer: Sunroof business was hit by an operating issue at a Hyundai Mobis supplier that disrupted Creta production; Hyundai is confident of recovering lost volumes. Henkel was impacted by Middle East-linked commodity changes; recoveries are accounted on an actual basis and benefits will flow into future profitability. (Mahendra Goyal)

Margin Pressure, Sunroof Quantification & PV Mix

• Question: Can you quantify the ~80–100 bps standalone margin dip, the sunroof volume/revenue loss, and why PV growth (5.5%) lagged the market (+17%)? (Aditya Khetan)
• Answer: Margin pressure is from commodity inflation — denominator math plus a lag in recovery (some customer POs still pending); recoveries are expected in coming quarters. Sunroof lost ~15,000–20,000 units in Q1; customer is confident of making this up in Q2/Q3, so no FY27 shortfall. PV underperformance is a model-mix issue — the company is not present on some high-selling UV platforms and some large customers' wallet share has declined; smaller cars (where Gabriel is strong) grew faster than the market, and "mix generally averages out over a period of time." (Atul Jaggi)

Balance Sheet & Funding Strategy

• Question: What are current cash/debt levels, how will the transactions be funded, and are there QIP plans? (Amit Hiranandani; Shweta Sharma)
• Answer: Cash was ~₹250 crore at end-Q1; funding is a combination of equity and debt. Shareholder approval is being sought for ~₹1,500 crore of debt; expected debt is ~₹1,000 crore post-closing, taking D/E to ~1:1 from <0.2 currently. There are no QIP plans; the company is evaluating debt instruments and is comfortable raising ~₹800 crore, with interest cost to be quantified from next quarter. (Mohit; Manish, Anand Group)

Exports & ADAS Integration Opportunity

• Question: What is the export share of HL Mando, and how does the ADAS inflection point shape the opportunity? Does ADAS software sit with the global entity? (Rakesh Jain)
• Answer: Exports are currently ~7–8% of HL Mando sales; the direction is for India to become a manufacturing hub supporting partners' global businesses. New vehicles are being configured with ADAS features; Gabriel will be a unique supplier offering integrated braking + steering + ADAS. Software services required for India business will be availed from engineering centers (India and Korea) and become part of the Indian business — Gabriel is not participating in any business outside India. (Mahendra Goyal)

Dana-Eaton Merger & Mando Product Overlap

• Question: Does HL Mando supply shock absorbers to Tata Motors, and what does the Dana-Eaton (US) merger mean for India? (Radha)
• Answer: HL Mando has no current Tata Motors shock absorber business (Tata discussions relate to steering products). Mando is technologically well ahead; the transaction is complementary and brings both businesses under the Gabriel fold. The Dana-Eaton merger is announced but not closed — "too early to comment"; the JV is performing well and integration options will be evaluated later if appropriate. (Mahendra Goyal)

Key Takeaway

Gabriel India reported Q1 FY27 standalone revenue of ₹1,274 crore (+19% YoY) and consolidated revenue of ₹1,426 crore (+15.5%) on a like-to-like post-restructuring basis, with EBITDA margins contracting to 8.4%/8.7% as commodity inflation outpaced cost recoveries; JV/associate profit share rose 10% to ₹43 crore and consolidated EBT reached ₹133 crore (+6%). The quarter was defined by Project Jupiter — a ₹2,231 crore acquisition of 28.99% of HL Mando Anand (FY26 revenue ₹5,886 crore, PAT ₹358 crore) and a $98.44 million, 30%-minus-one stake in ADAS player HL Klemove India (FY26 revenue ₹1,000+ crore, PAT ₹123 crore) — lifting Gabriel to ~70% of group sales and cementing its role as Anand Group's consolidation vehicle targeting ₹50,000 crore by 2030. Management guided to ~₹1,000 crore debt (D/E ~1:1), recovery of 15,000–20,000 sunroof units lost to the Hyundai supplier issue, margin normalization as commodity recoveries settle, and exports reaching ~10% of sales; key watch points are PV model-mix, ADAS localization ramp, and interest cost accretion from the debt-funded acquisitions.