Gabriel India Ltd - Annual Report 2023-24 Analysis

Overview #

Detailed Analysis #

This analysis looks into the Gabriel India Limited Annual Report for the fiscal year 2023-24, covering financial performance, business segments, identified risks, and ESG (Environmental, Social, and Governance) initiatives.

I. Financial Performance:

FY2023-24 marked a record year for Gabriel India, showcasing robust growth across various metrics:

• Revenue: Reached an all-time high of ₹33,032.13 million (approximately US$4,000 million), a 12.87% increase compared to FY2022-23. This represents a 12.5% growth compared to the previous year’s ₹29,717 million.
• EBITDA: Grew significantly by 37.1% to ₹2,929.70 million, indicating improved operational efficiency. The EBITDA margin expanded from 7.2% to 8.8%.
• Profit Before Tax (PBT): Increased by 40.54% to ₹2,500.38 million.
• Profit After Tax (PAT): Rose by 39.9% to ₹1,851.60 million.
• Earnings Per Share (EPS): Increased to ₹12.89 per share from ₹9.21 in FY2022-23.
• Dividend: Declared a total dividend of ₹4.00 per share (₹1.50 interim and ₹2.50 final).
• Balance Sheet: The company ended the year with a strong balance sheet, boasting a debt-free status and a net cash position of ₹2,995 million. Return on Equity (ROE) improved to 19.7% from 16.17%.

Key Financial Ratios:

The report highlights many key financial ratios, providing further insight into the Company’s performance:

• EBITDA Margin: 8.8% (Improved from 7.2%)
• Net Profit Margin: 5.5% (Improved from 4.6%)
• Debt-Equity Ratio: 0.01 (Indicates a very low debt burden)
• Return on Equity (ROE): 19.7% (Improved significantly)
• Return on Capital Employed (ROCE): >30% (consistent performance)
• Debtors Turnover (Days): 52 days
• Inventory Turnover (Days): 26 days
• Current Ratio: 1.86

II. Business Segments:

Gabriel India operates across various automotive segments, each contributing differently to overall revenue:

• Two & Three Wheelers (61% contribution): Maintains a strong market share (31%), driven by partnerships with major OEMs like TVS, Honda, and Suzuki. Significant growth in the EV segment is observed.
• Passenger Vehicles (25% contribution): Maintained a 23% market share, despite industry headwinds. Strong performance in the SUV segment is noted.
• Commercial Vehicles (12% contribution): Dominates the market with over 85% share. Experienced sales increase of 15% despite challenges.
• Railways: A significant contributor under the Commercial Vehicle segment, supplying to Indian Railways, including Vande Bharat trains.
• Aftermarket (13% contribution): Showed steady growth (8%) with increased sales of ₹4,192 million, driven by new product launches (291 new SKUs and three new product lines). Maintains a strong market share (>40%).
• Sunroof: A new vertical launched in FY2023-24 in partnership with Inalfa Roof Systems. Commenced operations with orders from Hyundai and Kia, generating ₹599.79 million in revenue. Projected to contribute significantly in coming years.

III. Risks:

The report identifies many key risks facing Gabriel India:

• Industry Risks: Volatility in the automotive industry, intense competition, changing customer preferences (shift towards EVs), and supply chain disruptions.
• Competition Risk: Pressure from global and domestic players requires continuous innovation and cost optimization.
• Technological Risk: Rapid technological advancements necessitate continuous upskilling and adaptation to maintain competitiveness in the evolving automotive landscape. The shift towards EVs poses both an opportunity and a risk.
• Procurement Risk: Reliance on specific suppliers requires robust sourcing strategies and building resilience in its supply chain.
• Export Risk: Expanding into new export markets involves risks associated with international regulations, currency fluctuations, and geopolitical factors.
• Compliance Risk: Adhering to evolving environmental, health, safety, and other regulations is essential for sustained operations.
• Cybersecurity Risk: The increasing reliance on digital technologies necessitates robust cybersecurity measures to safeguard sensitive data.
• Human Resources: Attracting and retaining skilled talent amid high attrition rates is a challenge.

IV. ESG Initiatives:

Gabriel India demonstrates a significant commitment to ESG:

• Environmental:

  • Renewable Energy: Achieved 15.65% renewable energy consumption in FY2023-24, aiming for 50% by 2025 and 100% carbon neutrality by 2025.
  • Carbon Footprint Reduction: Achieved 31.37% carbon neutrality in FY2023-24.
  • Water Management: Achieved 25% water neutrality and recycled 26.53% of water usage. Aiming for 100% water neutrality by 2025.
  • Waste Management: Achieved 99.88% waste diversion from landfills, targeting zero waste to landfill across all sites by 2025. Six out of seven plants have already achieved this.

• Social:

  • Employee Well-being: Focus on upskilling, employee development, and diversity and inclusion initiatives, with a specific “Empower Her” programme for women. Women currently constitute 12.76% of the workforce.
  • Community Engagement: Extensive CSR activities focusing on education, skill development, health and hygiene, and community conservation, with thousands of beneficiaries.
  • Human Rights: Adherence to ethical standards, with no reported incidents of human rights violations or trade union-related issues.

• Governance:

  • Strong Corporate Governance: Compliance with SEBI (LODR) Regulations, 2015, with a well-defined governance structure, including independent directors constituting over 50% of the board.
  • Transparency and Accountability: Commitment to ethical business practices, risk management, and robust internal controls.
  • Whistleblower Policy: Mechanism in place for reporting unethical behavior.

Overall Assessment:

Gabriel India Limited’s Annual Report 2023-24 reflects a year of strong financial performance, driven by robust growth across its various business segments. The company demonstrates a proactive approach to managing risks and a commitment to sustainable growth, evidenced by its significant ESG initiatives. The diversification into the sunroof market showcases a strategic outlook for future growth, though this segment remains in its early stages. Continued focus on innovation, operational efficiency, and stakeholder engagement will be key to navigating the challenges and capitalizing on opportunities in the dynamic automotive industry. The high level of reliance on certain major customers, however, remains a potential risk to be managed.

Detailed Analysis #

Asset Analysis #

The values for the requested financial metrics are presented separately for the standalone and consolidated financial statements. Here’s a breakdown of the figures from the provided annual report (all amounts are in Indian Rupees in millions):

Standalone Financial Statements (as of March 31, 2024):

• Total Assets: ₹16,120.25 million
• Current Assets: ₹10,543.19 million
• Cash and Cash Equivalents: ₹566.59 million
• Accounts Receivable (Trade Receivables): ₹4,529.36 million
• Inventory: ₹2,357.30 million

Consolidated Financial Statements (as of March 31, 2024):

• Total Assets: The exact figure for total assets in the consolidated balance sheet isn’t clearly stated as a single number in the provided text; it’s presented as a summation of many asset categories.
• Current Assets: Similarly, the consolidated current assets are not presented as a single, easily extracted value.
• Cash and Cash Equivalents: ₹599.28 million
• Accounts Receivable (Trade Receivables): ₹4,914.33 million
• Inventory: ₹2,915.16 million

Important Note: The consolidated financial statements include the figures for subsidiaries, leading to higher values for assets and other line items compared to the standalone figures which only represent the parent company. Also, minor discrepancies might exist between these extracted numbers and the exact reported numbers due to rounding or potential transcription errors in this digital copy of the report. For precise figures, you should always refer directly to the official printed or digital version of the annual report from Gabriel India Limited’s website.

Liability Analysis #

Here’s a breakdown of the total liabilities, current liabilities, long-term debt, and accounts payable figures from Gabriel India Limited’s Annual Report 2023-24, presented separately for the standalone and consolidated financial statements (all amounts are in Indian Rupees in millions):

Standalone Financial Statements (as of March 31, 2024):

• Total Liabilities: ₹6,033.75 million
• Current Liabilities: ₹5,678.07 million
• Long-Term Debt: The report doesn’t explicitly state a single “long-term debt” figure. However, long-term lease liabilities are reported as ₹86.84 million and long-term deferred tax liabilities as ₹133.24 million. These are components of the total liabilities but not a singular “long-term debt” category.
• Accounts Payable (Trade Payables): ₹4,891.75 million

Consolidated Financial Statements (as of March 31, 2024):

• Total Liabilities: The consolidated total liabilities are not presented as a directly extractable value; instead, it’s a calculation derived from the summation of various liability categories.
• Current Liabilities: ₹6,686.14 million
• Long-Term Debt: Similar to the standalone report, a specific “long-term debt” line item isn’t shown. Components of long-term liabilities include long-term lease obligations (₹452.23 million) and long-term deferred tax liabilities (₹133.24 million). These represent portions of the total liabilities.
• Accounts Payable (Trade Payables): ₹5,877.38 million

Important Note: The consolidated figures include the liabilities of the subsidiaries, resulting in higher values than those reported standalone. Again, slight variations from the officially reported numbers might occur due to rounding or transcription issues with the digital copy. Always consult the original published report from Gabriel India’s official sources for precise figures.

Equity Analysis #

Here’s a summary of the shareholders’ equity, retained earnings, and share capital for Gabriel India Limited, extracted from the Annual Report 2023-24, again shown separately for standalone and consolidated figures (all amounts in Indian Rupees in millions):

Standalone Financial Statements (as of March 31, 2024):

• Shareholders’ Equity (Total Equity): ₹10,086.50 million
• Retained Earnings: ₹9,281.21 million (This is a component of Reserves and Surplus)
• Share Capital (Equity Share Capital): ₹143.64 million

Consolidated Financial Statements (as of March 31, 2024):

• Shareholders’ Equity (Total Equity): ₹9,877.88 million
• Retained Earnings: ₹9,216.25 million (This is a component of Reserves and Surplus)
• Share Capital (Equity Share Capital): ₹143.64 million

Important Considerations:

• Reserves and Surplus: The annual report shows retained earnings as part of a broader “Reserves and Surplus” category. The retained earnings figures listed above represent the portion of Reserves and Surplus attributable to retained profits. Other components, such as securities premium and other reserves, are also included within the total equity figure.
• Consolidated vs. Standalone: The consolidated equity is lower than the standalone equity. This is because the consolidation process involves adjustments such as minority interests, which reduce the equity attributable to the parent company’s shareholders. Also, the consolidated statements include the equity of subsidiary companies.
• Accuracy: Remember that these numbers are extracted from a text version of the report, and minor differences may exist compared to the officially published figures due to rounding or transcription errors. To ensure precision, always consult the original annual report.

Income Statement #

Operating Performance #

Here’s a breakdown of the revenue, cost of revenue, gross profit, operating expenses, and operating income for Gabriel India Limited, from both the standalone and consolidated financial statements in the provided annual report (all amounts are in Indian Rupees in millions):

Standalone Financial Statements (for the year ended March 31, 2024):

• Revenue: ₹33,426.48 million
• Cost of Revenue: ₹24,706.30 million (This includes cost of materials consumed, purchases of stock-in-trade, and changes in inventories)
• Gross Profit: ₹8,720.18 million (Revenue - Cost of Revenue)
• Operating Expenses: ₹3,412.70 million (This category includes employee benefit expense, depreciation and amortization, and other expenses, excluding finance costs)
• Operating Income (EBITDA): ₹2,929.70 million (Gross Profit - Operating Expenses)

Consolidated Financial Statements (for the year ended March 31, 2024):

• Revenue: ₹34,026.26 million
• Cost of Revenue: ₹25,311.64 million (This includes cost of materials consumed, purchases of stock-in-trade, and changes in inventories)
• Gross Profit: ₹8,714.62 million (Revenue - Cost of Revenue)
• Operating Expenses: ₹3,459.10 million (This category includes employee benefit expense, depreciation and amortization, and other expenses, excluding finance costs)
• Operating Income (EBITDA): ₹2,949.50 million (Gross Profit - Operating Expenses)

Important Notes:

• Rounding: Minor discrepancies may exist between these numbers and those precisely reported in the official annual report, due to rounding.
• Consolidated vs. Standalone: The consolidated figures are higher than the standalone figures because they include the results of subsidiary companies.
• Finance Costs: Finance costs (interest expense) are excluded from the calculation of operating income (EBITDA) in both statements, as is customary.

Always refer to the original Gabriel India Limited Annual Report for precise figures.

Bottom Line Metrics #

Here’s a summary of the net income, EBITDA, basic EPS, and diluted EPS from Gabriel India Limited’s Annual Report for FY2023-24, shown separately for standalone and consolidated results (all amounts are in Indian Rupees in millions, except EPS which is per share):

Standalone Financial Statements (for the year ended March 31, 2024):

• Net Income (Profit After Tax - PAT): ₹1,851.60 million
• EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization): ₹2,929.70 million
• Basic EPS (Earnings Per Share): ₹12.89 per share
• Diluted EPS: ₹12.89 per share (The report shows that basic and diluted EPS are the same)

Consolidated Financial Statements (for the year ended March 31, 2024):

• Net Income (Profit After Tax - PAT): ₹1,787.47 million
• EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization): ₹2,949.50 million
• Basic EPS (Earnings Per Share): ₹12.44 per share
• Diluted EPS: ₹12.44 per share (The report shows that basic and diluted EPS are the same)

Important Note: Always refer to the original official report for the most accurate values. There’s a possibility of slight variations due to rounding differences when extracting data from a text version. The consolidated figures reflect the performance of the parent company and its subsidiaries, while the standalone figures represent only the parent company’s performance.

Cash Flow #

Cash Flow Components #

Here’s a summary of the operating, investing, and financing cash flows for Gabriel India Limited from its FY2023-24 Annual Report, shown separately for standalone and consolidated statements (all amounts are in Indian Rupees in millions):

Standalone Statement of Cash Flows (for the year ended March 31, 2024):

• Cash Flow from Operating Activities: ₹1,888.94 million (Net cash inflow)
• Cash Flow from Investing Activities: ₹(1,197.31) million (Net cash outflow)
• Cash Flow from Financing Activities: ₹(523.32) million (Net cash outflow)

Consolidated Statement of Cash Flows (for the year ended March 31, 2024):

• Cash Flow from Operating Activities: ₹1,765.89 million (Net cash inflow)
• Cash Flow from Investing Activities: ₹(1,286.18) million (Net cash outflow)
• Cash Flow from Financing Activities: ₹(278.71) million (Net cash outflow)

Important Notes:

• Net Increase/Decrease in Cash: The net increase/decrease in cash and cash equivalents is the sum of operating, investing, and financing cash flows. In the standalone statement, it was ₹168.31 million; in the consolidated statement, it was ₹201.00 million.
• Parent vs. Subsidiaries: The consolidated cash flows include the cash flow activities of the subsidiaries, resulting in differences compared to the standalone figures.
• Rounding and Potential Errors: There’s a small chance of minor discrepancies due to rounding or transcription errors when extracting data from a text representation of the report. Refer to the original report for definitive values.

Remember to consult the official Gabriel India Limited Annual Report for precise numbers.

Cash Flow Metrics #

The provided annual report doesn’t explicitly state “free cash flow” as a single line item. Free cash flow is typically calculated as operating cash flow less capital expenditures. We can, however, determine the other two metrics: capital expenditure and dividends paid, from both standalone and consolidated statements (all amounts are in Indian Rupees in millions):

Standalone Financial Statements (for the year ended March 31, 2024):

• Capital Expenditure (CAPEX): The report states that capital expenditure incurred during the year was ₹830 million. This is derived from the investing cash flow section; It includes payments for property, plant, and equipment; intangible assets and investment properties.
• Dividends Paid: ₹452.48 million (This is stated explicitly in the report)

Consolidated Financial Statements (for the year ended March 31, 2024):

• Capital Expenditure (CAPEX): The consolidated capital expenditure is not a directly stated value in the provided report; it must be calculated from the cash flow statement. The total cash outflow from investing activities was ₹1,286.18 million. However, this value includes other items besides CAPEX, so the exact CAPEX figure for the consolidated statements isn’t readily available.
• Dividends Paid: ₹453.40 million (This value is mentioned directly)

Free Cash Flow Calculation (Estimate):

To estimate the free cash flow, we need to subtract capital expenditure from operating cash flow. However, a precise consolidated CAPEX figure is not available in the text provided, preventing a precise calculation of consolidated free cash flow.

• Standalone Free Cash Flow (Estimate): ₹1,888.94 million (Operating Cash Flow) - ₹830 million (CAPEX) = ₹1,058.94 million
• Consolidated Free Cash Flow (Estimate): Cannot be precisely calculated due to the lack of a clearly stated consolidated CAPEX figure from the provided text. You would need to perform this calculation yourself using the complete, official annual report.

Important Note: These figures, especially the free cash flow estimates, rely on information extracted from the provided text. The consolidated CAPEX requires a more detailed examination of the consolidated cash flow statement which is only partially visible in the extract. Always refer to the official Gabriel India Limited Annual Report for completely accurate and precise data.

Profitability Ratios #

We can calculate profitability ratios for Gabriel India Limited using the data provided in the annual report. Remember that these calculations are based on the figures extracted, so minor variations are possible when compared to the company’s official calculations due to rounding or other factors. All values are expressed as percentages.

Standalone Financial Statements (for the year ended March 31, 2024):

• Gross Profit Margin: (Gross Profit / Revenue) * 100 = (₹8,720.18 million / ₹33,426.48 million) * 100 = 26.07%
• Operating Profit Margin (EBIT Margin): (Operating Income / Revenue) * 100. Operating income (EBIT) is not directly stated, so this cannot be calculated precisely. The closest approximation would be to use EBITDA (₹2,929.70 million), but this would be an approximation as it excludes interest and taxes. Using EBITDA as a proxy, the approximate operating margin would be (₹2,929.70 million / ₹33,426.48 million) * 100 = 8.76%
• Net Profit Margin: (Net Income / Revenue) * 100 = (₹1,851.60 million / ₹33,426.48 million) * 100 = 5.53%
• Return on Equity (ROE): The report states the ROE as 19.7%.
• Return on Assets (ROA): Requires net income and average total assets. The average total assets is not directly provided so this cannot be calculated.

Consolidated Financial Statements (for the year ended March 31, 2024):

• Gross Profit Margin: (Gross Profit / Revenue) * 100 = (₹8,714.62 million / ₹34,026.26 million) * 100 = 25.61%
• Operating Profit Margin (EBIT Margin): Similar to the standalone case, EBIT is not explicitly provided. Using the EBITDA (₹2,949.50 million) as an approximation: (₹2,949.50 million / ₹34,026.26 million) * 100 = 8.67%
• Net Profit Margin: (Net Income / Revenue) * 100 = (₹1,787.47 million / ₹34,026.26 million) * 100 = 5.25%
• Return on Equity (ROE): The report does not provide a consolidated ROE figure.
• Return on Assets (ROA): Cannot be calculated directly from the provided data as average total assets are not given.

Important Considerations:

• EBIT vs. EBITDA: The calculation of the operating margin is approximate in both cases because the Earnings Before Interest and Taxes (EBIT) is not directly provided, and EBITDA, which includes depreciation and amortization, is used as a substitute. Using EBIT would produce a more precise operating margin.
• ROA Calculation: Return on assets (ROA) requires average total assets, which is not readily available in the provided textual data.
• Rounding: Minor variations might occur due to rounding when compared to the official report.

To obtain precise figures for all these ratios, please refer directly to the complete and official annual report. The report likely contains these ratios explicitly calculated by the company.

Liquidity Ratios #

The provided text of Gabriel India Limited’s annual report gives the current ratio but doesn’t provide enough information to directly calculate the quick ratio or the cash ratio. Here’s what we can determine:

Standalone Financial Statements (as of March 31, 2024):

• Current Ratio: The report states this ratio as 1.86. This is calculated as Current Assets / Current Liabilities.

• Quick Ratio: This ratio is calculated as (Current Assets - Inventory) / Current Liabilities. While we have the standalone values for current assets and current liabilities, the inventory value is included within current assets and cannot be easily separated from the provided text. Therefore, the quick ratio cannot be precisely calculated.

• Cash Ratio: This is calculated as (Cash and Cash Equivalents) / Current Liabilities. Again, the necessary standalone values for cash and cash equivalents and current liabilities are available, but a precise calculation is not possible without a clearer breakdown of the current assets which includes cash.

Consolidated Financial Statements (as of March 31, 2024):

• Current Ratio: This ratio is not explicitly stated in the consolidated financial statement section of the provided text. It would require calculating Current Assets / Current Liabilities using the provided data.

• Quick Ratio: Cannot be directly calculated from the provided data for similar reasons as in the standalone statement. A precise breakdown of the components of current assets is needed.

• Cash Ratio: Cannot be directly calculated. A detailed breakdown of the current assets that clearly isolates the cash and cash equivalents is required for a precise calculation.

In summary: Only the standalone current ratio is directly provided in the report extract. To calculate the quick ratio and cash ratio, and the consolidated current ratio, you would need to obtain the full, official annual report to access the complete balance sheet and ensure accurate component separation within the current assets.

Efficiency Ratios #

The provided annual report gives some turnover ratios but not all of them. Let’s break down what’s available and what’s missing for both the standalone and consolidated financial statements. Note that these calculations are based on extracted data, and slight discrepancies might occur due to rounding when comparing to the official report. All values are in times (or days where specified).

Standalone Financial Statements (for the year ended March 31, 2024):

• Asset Turnover: This ratio is calculated as Revenue / Average Total Assets. The revenue is provided (₹33,426.48 million), but the average total assets require the beginning and ending total assets which is not directly provided in the text. Therefore, a precise calculation is not possible. The report does state the return on investment (ROI) which is related but not equivalent.

• Inventory Turnover: The report states this ratio as 26 days. This represents the number of days the inventory remains on hand.

• Receivables Turnover: The report provides this ratio as 52 days. This represents the number of days it takes to collect accounts receivables.

Consolidated Financial Statements (for the year ended March 31, 2024):

• Asset Turnover: Cannot be precisely calculated from the provided data. The information needed to calculate average total assets is missing.

• Inventory Turnover: The report doesn’t explicitly state this ratio for the consolidated statements.

• Receivables Turnover: The report doesn’t explicitly state this ratio for the consolidated statements.

In summary: The provided text gives limited efficiency ratios. To calculate all three turnover ratios (asset turnover, inventory turnover, and receivables turnover), and to obtain the complete consolidated figures, you need the full and official annual report from Gabriel India Limited with the complete balance sheets and income statements. The report itself will likely present these ratios already calculated.

Leverage Ratios #

The annual report provides some use ratios but not all of them. Let’s examine what’s available, keeping in mind that these calculations are based on extracted data, and there might be minor variations from the official report’s figures due to rounding or other factors.

Standalone Financial Statements (as of March 31, 2024):

• Debt-to-Equity Ratio: The report states this ratio as 0.01. This is calculated as Total Debt / Total Equity. Note that the report doesn’t explicitly define “Total Debt” as a single line item. The components of debt considered likely include lease liabilities and any other long-term financial liabilities.

• Debt-to-Assets Ratio: This ratio is calculated as Total Debt / Total Assets. We cannot calculate this precisely due to the absence of a clearly stated “Total Debt” figure in the provided text extract.

• Interest Coverage Ratio: The report states this ratio as 53.89. This is calculated as Earnings Before Interest and Taxes (EBIT) / Interest Expense. EBIT is not directly given; the report uses EBITDA as a proxy in some calculations, leading to an approximation.

Consolidated Financial Statements (as of March 31, 2024):

• Debt-to-Equity Ratio: The report does not provide this ratio explicitly for the consolidated statements. It would require calculating Total Debt / Total Equity using the appropriate data from the consolidated balance sheet. The definition of “Total Debt” here would similarly include lease liabilities and other relevant long-term liabilities.

• Debt-to-Assets Ratio: Cannot be directly calculated. We lack a clearly stated “Total Debt” figure and also need the exact consolidated total assets from the report itself.

• Interest Coverage Ratio: This ratio is not explicitly provided. To calculate it precisely you’d need the consolidated EBIT and total interest expense.

In summary: Only the standalone debt-to-equity ratio and interest coverage ratio are directly available in the provided text extract. The consolidated and other ratios require additional information that’s not easily extractable from the partial data provided. Refer to the official annual report for the complete and accurate figures.

Market Analysis #

Market Metrics #

The provided annual report gives some market valuation data but lacks the information needed to calculate all the requested ratios precisely. Let’s analyze what’s available and what’s missing:

Market Capitalization:

• The report gives the market capitalization as ₹4,790.53 crore (BSE) and ₹4,795.55 crore (NSE) as of March 31, 2024. (Note: 1 crore = 10 million).

Other Ratios (Calculations and Missing Data):

To calculate the Price-to-Earnings (PE) ratio, Price-to-Book (PB) ratio, dividend yield, and dividend payout ratio, we need additional information not readily available in the text extract of the annual report:

• PE Ratio: This is calculated as Market Price per Share / Earnings Per Share (EPS). The report provides the EPS but not the market price per share as of a specific date for calculating the PE ratio.

• PB Ratio: This is calculated as Market Price per Share / Book Value per Share. We have the book value per share from the standalone financial statement section (₹70.22). However, the market price per share is needed, which is not directly provided.

• Dividend Yield: This is calculated as Annual Dividend per Share / Market Price per Share. Again, the annual dividend per share is available, but we’re missing the market price per share.

• Dividend Payout Ratio: This is calculated as Total Dividends Paid / Net Income. We have the total dividends paid (₹452.48 million from standalone statements and ₹453.40 million from consolidated) and net income (₹1,851.60 million standalone and ₹1,787.47 million consolidated), allowing for calculation:

  • Standalone Dividend Payout Ratio: (₹452.48 million / ₹1,851.60 million) * 100 = 24.44%
  • Consolidated Dividend Payout Ratio: (₹453.40 million / ₹1,787.47 million) * 100 = 25.37%

In summary:

Only the market capitalization is directly available from the provided text. To compute the PE ratio, PB ratio, and dividend yield, you will need to obtain the market price per share from a reliable financial data source (like Google Finance, Yahoo Finance, or Bloomberg) as of the relevant date (ideally March 31, 2024, or a date close to it). The dividend payout ratio is calculated above using the provided data. Always cross-reference your calculations with the company’s official report for accuracy.

Business Analysis #

Segment Analysis #

Gabriel India Limited operates in many business segments. Precise growth rates and operating margins aren’t explicitly detailed for every segment in the provided annual report text. However, we can compile the available information:

Important Notes:

• Approximations: Revenue growth rates and operating margins are estimated based on the available information in the text extract. The annual report may provide more precise figures. Some segment revenues are not individually specified, making detailed ratio calculations impossible.
• Revenue Contribution: The report indicates the approximate revenue contribution percentages for certain segments (e.g., Two & Three Wheelers: 61%, Passenger Vehicles: 25%, Commercial Vehicles: 12%, and Aftermarket: 13%).
• Market Share: Market share figures are often estimates and based on the report’s claims. Independent verification would be needed to validate them.
• Data Gaps: The provided text doesn’t offer detailed data for each segment on all aspects requested (operating margin, precise revenue for some segments). The complete annual report would be necessary for a completely detailed overview.

To obtain completely precise and complete data on each segment, consult the original, official Gabriel India Limited annual report.

Risk Management #

Risk Assessment #

The Gabriel India Limited annual report identifies many key risk factors. While the report doesn’t explicitly assign numerical likelihood or severity scores, we can categorize and analyze the risks based on the information provided:

I. Category: Industry Risks

II. Category: Financial Risks

III. Category: Operational Risks

Mitigation Strategies & Trends Summary:

Gabriel India’s risk mitigation strategies focus heavily on investment in R&D, strengthening supply chains through diversification and localisation, enhancing its digital infrastructure and cybersecurity, and fostering a strong employee base through upskilling and employee well-being initiatives. Overall trends indicate increasing pressure to adapt to a rapidly evolving automotive landscape, including the shift towards EVs, growing emphasis on sustainability, and ever-increasing customer expectations for high-quality and safe products. Geopolitical instability and supply chain disruptions remain significant concerns.

Strategic Overview #

Management Assessment #

Gabriel India Limited’s management highlights many key strategies, competitive advantages, market conditions, challenges, and opportunities in its annual report:

I. Key Strategies:

• Product Diversification: Expanding beyond its core shock absorber business into new, high-growth segments like sunroofs (through a joint venture with Inalfa) and exploring opportunities in semi-active suspension systems and EV components. This aims to reduce reliance on any single product line and mitigate risks associated with evolving powertrain technologies.
• Technological Advancement: Significant investment in R&D to develop cutting-edge products, including semi-active damping systems, lightweight components for EVs, and other advanced technologies. This focus is intended to maintain a competitive edge in a rapidly evolving industry.
• Capacity Expansion: Strategic investments to increase production capacity in key areas to meet growing demand and support the expansion into new product lines.
• Supply Chain Resilience and Localization: Reducing reliance on imports, especially from China, through localization efforts and building stronger relationships with local Tier-2 suppliers to ensure a more resilient and cost-effective supply chain.
• Cost Optimization: Implementing the “CoRe 90” program to streamline processes, reduce waste, and optimize costs across its value chain.
• Customer Focus: Maintaining strong relationships with OEMs and expanding its presence in the aftermarket through a wide distribution network.
• Global Expansion: Pursuing growth opportunities in international markets through strategic partnerships and focusing on regions like Southeast Asia, Africa, and Latin America.

II. Competitive Advantages:

• Technological Leadership: Gabriel India positions itself as a technology leader in the Indian automotive components sector, with a strong R&D focus and numerous patents filed (85 patents, 28 granted).
• Strong Customer Relationships: Long-standing relationships with leading OEMs across various vehicle segments, providing a stable base of business and enabling collaborative product development.
• Strategic Partnerships: Collaborations with global players like Inalfa and other technology providers provide access to advanced technologies and global markets.
• Manufacturing Expertise: Extensive manufacturing network across India, strategically located near major OEMs, enables just-in-time delivery and efficient logistics.
• Cost Competitiveness: A focus on cost optimization and localization efforts aiming to maintain price competitiveness.
• Brand Recognition: Decades of experience and a strong brand reputation in the Indian aftermarket.

III. Market Conditions:

• Robust Indian Automotive Market: The Indian automotive industry exhibits strong growth, with segments such as passenger vehicles, two-wheelers, and commercial vehicles performing well. The EV sector is also emerging rapidly.
• Increasing Demand for Premium Features: Growing consumer preference for premium features like sunroofs in vehicles is creating new opportunities.
• Global Supply Chain Challenges: Geopolitical tensions, conflicts, and natural disasters are causing disruptions in the global supply chain, impacting material availability and costs.
• Government Support: Initiatives like “Make in India” and the Production Linked Incentive (PLI) scheme are providing support for the growth of the domestic automotive industry.

IV. Challenges:

• Intense Competition: Pressure from both domestic and international competitors in a highly competitive market.
• Supply Chain Disruptions: Vulnerability to disruptions in the global supply chain due to geopolitical factors and other uncertainties.
• Skilled Labor Shortages: Difficulty in attracting and retaining skilled professionals, leading to higher attrition rates.
• Rapid Technological Advancements: The need for continuous adaptation and investment to keep pace with evolving technologies in the automotive sector, including the shift towards electric vehicles.
• Commodity Price Volatility: Fluctuations in raw material prices impacting profitability.
• Regulatory Changes: Evolving government regulations and policies require continuous monitoring and adaptation.

V. Opportunities:

• Growth in the Indian Automotive Market: Significant growth potential in the Indian automotive industry, with an expanding middle class and rising income levels.
• Electric Vehicle (EV) Revolution: A major opportunity in the rapidly growing electric vehicle segment, requiring development and supply of EV-specific components.
• Premiumization Trend: Growing consumer preference for advanced features and premium vehicles presents significant opportunities.
• Expansion into New Product Segments: Diversification into sunroofs and other high-growth segments offers potential for revenue expansion.
• Export Market Penetration: The “China plus one” strategy and increasing global demand for automotive components from India present growth opportunities in export markets.

In essence, Gabriel India’s strategy focuses on leveraging its existing strengths (customer relationships, manufacturing capabilities, and brand recognition) while actively adapting to and capitalizing on the opportunities presented by the evolving automotive landscape. The company acknowledges the challenges and has implemented mitigation strategies to address them. The success of its strategy will depend on its ability to continuously innovate, optimize costs, and build resilience in its operations and supply chain.

ESG Ratings #

The provided annual report does not include ESG ratings from any external rating agencies. While the report details Gabriel India’s ESG initiatives extensively, it does not include scores or ratings from organizations such as MSCI, Sustainalytics, Refinitiv, or others that provide such assessments. To find ESG ratings, you would need to consult independent ESG rating providers directly, searching for Gabriel India Limited using their databases.

ESG Initiatives #

Gabriel India Limited’s Annual Report 2023-24 details a range of Environmental, Social, and Governance (ESG) initiatives, outlining its progress towards sustainability goals. Here’s a summary:

I. Environmental Initiatives:

• Renewable Energy: Significant investments in renewable energy sources, including solar and wind power plants. Achieved 15.65% renewable energy consumption in FY2023-24, aiming for 50% by 2025 and 100% by 2030.
• Carbon Footprint Reduction: Implemented various energy-efficient technologies and practices to reduce its carbon footprint. Achieved 31.37% carbon neutrality in FY2023-24; targeting 100% by 2025.
• Water Management: Implemented rainwater harvesting and advanced wastewater treatment facilities (Zero Liquid Discharge – ZLD at three plants), aiming for 100% water neutrality by 2025; 25% achieved in FY2023-24. 26.53% of water usage was recycled.
• Waste Management: Focus on reducing, reusing, and recycling waste materials. Achieved 99.88% waste diversion from landfills; aiming for 100% zero-waste-to-landfill by 2025. Six of seven plants have already achieved this. Sustainable packaging is a target by 2030.
• Biodiversity: Initiated scientific studies to map biodiversity and carbon sequestration at various plant locations. The report highlights the natural greenery maintained at its plants.

II. Carbon Footprint:

The report provides data for Scope 1 and Scope 2 emissions:

• Scope 1 Emissions (direct emissions): 6,315 tonnes of CO2e in FY2023-24 (slightly reduced from 6,447 tonnes in FY2022-23).
• Scope 2 Emissions (indirect emissions from energy consumption): 15,313 tonnes of CO2e in FY2023-24 (reduced from 17,284 tonnes in FY2022-23).
• Total Scope 1 & 2 Emissions (gCO2e/₹): 0.64 in FY2023-24 (reduced from 0.81 in FY2022-23). This is the intensity of emissions per rupee of sales.
• Scope 3 Emissions: Not tracked.

III. Social Initiatives:

• Employee Well-being: Focus on employee health and safety, with various programs, training, and initiatives to improve workplace conditions. Emphasis on upskilling and reskilling, especially for women (“Empower Her” program). Improved employee satisfaction. Reduction in lost time injuries (LTIFR).
• Community Development: Extensive Corporate Social Responsibility (CSR) programs focusing on education, skill development (particularly for women), healthcare, and community infrastructure. Supported thousands of students and empowered hundreds of youths through vocational training.
• Human Rights: Commitment to upholding human rights and ethical employment practices, with no reported violations or trade union-related issues.

IV. Governance Practices:

• Board Composition: A various board of directors with a significant proportion of independent directors, aiming for a balanced representation of gender and various perspectives. Over 50% of Board members are women.
• Committees: Various board committees (Audit, Nomination & Remuneration, Stakeholder Relationship, CSR, Risk Management) to oversee different aspects of the business, including ESG matters.
• Code of Conduct: A detailed code of conduct to guide ethical business practices and ensure compliance with regulations.
• Risk Management: A robust risk management framework to identify, assess, and mitigate potential risks, including environmental, social, and financial risks.
• Transparency and Disclosure: Commitment to providing timely, accurate, and detailed information to stakeholders.

V. Sustainability Goals:

Gabriel India has set ambitious sustainability targets for the coming years:

• Renewable Energy: 50% by 2025, 100% by 2030
• Carbon Neutrality: 100% by 2025
• Water Neutrality: 100% by 2025
• Zero Waste to Landfill: 100% across all sites by 2025 (already achieved in 6/7 plants)
• Sustainable Packaging: 100% sustainable packaging across all facilities by 2030

In summary, Gabriel India’s sustainability strategy is deeply integrated into its business operations. The company shows a commitment to environmental stewardship, social responsibility, and good governance, setting ambitious goals supported by a multi-faceted approach involving various initiatives and risk mitigation strategies. However, the scope 3 emissions are currently not tracked, which represents an area for future improvement and data collection.

Additional Information #

Operational Metrics #

Based on the provided annual report:

R&D Expenditure:

• Total R&D Expenditure (Standalone): ₹342.69 million (This includes both capital and revenue expenditure)
• Total R&D Expenditure (Consolidated): This value is not explicitly stated.

Employee Count (as of March 31, 2024):

• Total Employees (Standalone): 771 (including permanent and non-permanent)
• Total Workers (Standalone): 3,641 (including permanent and non-permanent)
• Total Employees & Workers (Standalone): 4,412
• Total Employees and Workers (Consolidated): This figure is not explicitly provided in the text of the report.

Important Note: The consolidated figures are not directly provided in the report text extract. For the precise consolidated employee count and R&D expenditure, consult the complete official annual report. Slight variations in the standalone figures may occur due to rounding or minor transcription errors in the provided text extraction of the report.

Key Events #

Several significant events shaped Gabriel India Limited’s fiscal year 2023-24, as highlighted in the annual report:

• Entry into Sunroof Business: A major strategic move was the formation of Inalfa Gabriel Sunroof Systems Private Limited (IGSS), a joint venture with Inalfa Roof Systems Group B.V. This marks a significant diversification into a high-growth segment of the automotive industry. The new plant commenced operations, securing initial orders from Hyundai.

• Highest-Ever Revenue: The company achieved its highest-ever revenue, showcasing robust financial performance.

• Record EBITDA Growth: A substantial increase in EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) demonstrated significant improvement in operational efficiency and profitability.

• Technology Upgrades and Automation: Continued investment in automation and Industry 4.0 technologies, including the implementation of robotic assembly lines, to improve manufacturing efficiency and quality.

• Focus on Localization: Significant progress in localizing sourcing, reducing dependence on imports (particularly from China).

• Numerous Awards and Recognitions: Gabriel India received many awards from major OEMs and industry bodies for quality, innovation, technology, supply chain excellence, and sustainability.

• Establishment of Gabriel Europe Engineering Centre (GEEC): A new subsidiary, GEEC was established in Genk, Belgium, to improve R&D capabilities and support technology transfer.

• Expansion of R&D capabilities: Strengthening of R&D across business units through capacity additions and recruitment of experienced professionals. Development of new products including semi-active suspension systems.

• Changes in Senior Management: Some changes occurred within the senior management team, with appointments and departures of Chief Operating Officers in different business units.

• Improved Customer Service: Significant improvement in service, leading to higher customer satisfaction.

These events highlight Gabriel India’s proactive approach to growth, innovation, and sustainability, while also navigating challenges in the dynamic automotive landscape. The entry into sunroofs is especially notable as a strategic step towards diversification and expansion into higher-value product segments.