Gabriel India Limited — Q3 FY26 earnings call

Call held 3 Feb 2026

Management summary

Gabriel India delivered a strong Q3 FY26, reporting a 16% Y-o-Y growth in both standalone and consolidated revenues, with improved EBITDA margins. The company achieved significant new business wins in sunroofs, e-bikes, and 2-wheelers, and is on track with its long-term strategic goals including localization. While facing increased other expenses and underutilization of a sunroof production line, management outlined clear plans for future growth and efficiency.

Highlights

  • Standalone operating revenue grew by 16% Y-o-Y to INR1,072 crores, driven by higher volumes and strong sales performance.

  • Standalone EBITDA grew by 21% Y-o-Y to INR96 crores, with margins improving from 8.6% in Q3 FY25 to 9% in Q3 FY26 due to higher volumes and operational excellence.

  • Consolidated revenue grew by 16% Y-o-Y to INR1,179 crores, and consolidated EBITDA stood at INR111 crores with margins of 9.4%.

  • Inalfa Gabriel Sunroof Systems (IGSS) secured new business with Hyundai for 3 model variants, expected to generate an annual turnover of INR120 crores.

  • Gabriel India secured its first development order for e-bike forks from a European customer and made significant inroads into Hero MotoCorp in the 2-wheeler segment.

Concerns

  • INR13 crores was accounted as a one-time exceptional item due to the new Labor Code Act.

  • Other expenses increased by INR8 crores Q-on-Q due to enhanced technical support from partners and restructuring cost milestones.

  • The sunroof second manufacturing line is currently not utilized at all, primarily due to the underperforming Syros model.

Key financials

  1. Standalone Operating Revenue ₹1,072 Cr +16%YoY
  2. Standalone EBITDA ₹96 Cr +21%YoY
  3. Standalone EBITDA Margin 9%
  4. Consolidated Revenue ₹1,179 Cr +16%YoY
  5. Consolidated EBITDA ₹111 Cr
  6. Consolidated EBITDA Margin 9.4%
  7. Adjusted Consolidated PAT ₹68 Cr +13%YoY

What they filed

Q1 FY27: revenue up 15.6%, net profit up 2.9% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,027 1,017 1,073 1,234 1,180 +15%1,179 +16%1,381 +29%1,426 +16%
EBITDA99 91 109 118 113 +14%107 +18%133 +22%124 +5%
Net profit63 60 64 105 69 +10%55 −8%119 +86%108 +3%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Inalfa Gabriel Sunroof Systems Private Limited (IGSS)
    ₹107 Cr Revenue13.5% EBITDA Margin

Order book

high confidence

Total value

₹120 Cr

as of 2025-12-31 quantified

Inflow this quarter

₹120 Cr

Execution

Start of production expected to be by December of 2027.

Composition

  • Hyundai Sunroof (3 variants, TVS type) (product) ₹120 Cr 100%
IGSS won new business with Hyundai for 3 model variants, expected to generate an annual turnover of INR120 crores, with SOP by December 2027.

Source: Prepared remarks

Capital allocation

medium confidence
  • Capex Capex disclosed
    • Capacity enhancement in 2-wheeler segment, including 2 new lines cleared in Board meeting
    • Adding a new location for capacity
    So obviously, with new businesses coming in not only from Hero, but from all the other customers also, I think the share of business has been continuously improving. In line with that, we have been adding capacities in the existing plants also, and we are looking forward to maybe adding a location specifically in the coming some time. So capacity enhancement in 2-wheeler is, to be honest, is a continuous affair. Even today also, we have cleared 2 more lines in our Board meeting there. So we continue to invest.
  • M&A SK Enmove entity Joint venture · Announced

    Formation of a new entity

    Costs related to forming a company and initial expenditure are being incurred, but not substantial.

    We are concluding the CPs, and we have formed the company. So we are expecting to contribute equity during this quarter, and we expect the start of operations from quarter 1 of FY '27, a small operation to begin with. There are costs related to forming a company and initial expenditure are being incurred, but we do not see any substantial expenditures.

Guidance & targets

Capacity

  • Sunroof second line utilization Capacity · Moving forward · Medium confidence 60-70%
    So we are looking at a very good utilization of the second line moving forward there. So the second line will get converted into hybrid line to ensure that we can make BLT as well as the TVS type sunroof. And so utilization will not be a major issue moving forward once this model come into the play.

    — Atul Jaggi

Localization

  • Sunroof localization percentage Localization · by end of '26, '27 (next 1-1.5 years) · High confidence 60%

    From 33% today

    So current status of the localization is around 33%. It used to be around 26%, I think when we first started, if I'm not wrong. And we are -- the target is to take it to 60%.

    — Atul Jaggi

Product Development

  • Semi-active shocks penetration in Passenger Cars Product Development · 5 years down the line · Low confidence Top-end variants
    So it will be a slow progress there on the passenger car side. While it's one-odd variants will keep coming, I think maybe as you ask 5 years down the line, my estimate is that maybe top-end variants of some models may have this.

    — Atul Jaggi

Long-term Vision

  • Projected number for sunroofs Long-term Vision · 2030/31 · Medium confidence On track
    I think 2 things are there. We have always mentioned that by, say, 2030, '31 around that number, we are now with the wins that we have seen recently, I think the one thing I can confirm that we are on track on the projected number in the long run.

    — Atul Jaggi

What to watch in Q4 FY26

Sunroof second line utilization

Moving forward
Current Not utilized at all (only one line utilized)
Target 60-70% utilization

Why it matters

Improved utilization of the second sunroof production line is crucial for enhancing asset efficiency and profitability from the sunroof segment.

So the second line is not utilized at all. Currently, we are utilizing only one line. ... we are looking at a very good utilization of the second line moving forward there.

Risks & concerns

  • Increased competition in sunroof segment impacting margins and realization

    medium

    Management noted that increased competition naturally puts pressure on margins and requires higher localization efforts.

    That is very normal and very natural for any product because when there is an increased competition, the pressure both on the margins as well as on more localization requirements, et cetera, keep increasing. So definitely, the answer I will not say the answer is no. The answer is yes.

    Analyst acknowledged

  • Slow penetration of semi-active shocks due to high cost and ecosystem challenges

    medium

    The penetration of semi-active shocks is expected to be slow, especially on the passenger car side, due to significant cost impact and the need for an electronics ecosystem.

    The penetration will be slow. Obviously, the cost impact is also significant. Even today also, whatever is being made is not made locally, they're all imported. So you need an ecosystem on the electronics, on the assembly, on the dampers, etc. So it will be a slow progress there on the passenger car side.

    Management acknowledged

Q&A highlights

8 direct
Details on new sunroof and Hero MotoCorp orders Direct
So this is as I said, this is Hyundai order win with 3 variants. This is a TVS type of sunroof. The total volume expected is 130,000 with an annual turnover of roughly around INR120 crores. The start of production is expected to be by December of 2027. ... We are working on the SOP date. I think I'm expecting the start of production by end of quarter 1 financial year or maybe start of quarter 2. And then there are a couple of models under discussion.

Provides specific financial and operational details for significant new order wins, including timelines for production.

Asked by Mumuksh

Reasons for increase in other expenses Direct
So the increase is primarily in the other cost is for 2 reasons. One is the enhanced technical support from the partner where we would like to expedite the new business supports and localization support to improve the localization in India to reduce the RMC percentage on the sunroof business... And second, on the account of the restructuring cost basis the milestones.

Clarifies the drivers behind increased operating costs, indicating strategic investments for future growth and one-time restructuring charges.

Asked by Mumuksh

Perceived market share loss in 2-wheeler and PV segments Direct
So in terms of the loss in share, there's no loss in the market share that is there. If you look at the production numbers, yes, this quarter, we see against the 2-wheeler, if you see the the production, while the sales number are different, but obviously, we go with the production numbers. So the market has grown between 15% to 16%. The Gabriel growth is around 13% is primarily because of 2 reasons. One, this quarter, the Hero growth has been much higher than in the previous quarters.

Addresses analyst concerns about market share, attributing growth differences to model mix and specific OEM performance rather than actual share erosion.

Asked by Nikhil Upadhyay

Commercialization timelines for e-bike forks and solar dampers Direct
E-bike: The start of production expected is around, I think, the quarter 3 because now the development will start and around quarter 3 of the next year, we will be seeing the start of production. ... Solar: So once the validation happens, we will get into the mass production time line. So as of now, there is no delay. Rather, I would say that with the tariff being changed for the U.S. market, I'm really positive about because North America is a big market.

Provides specific timelines for new product launches and highlights a positive regulatory development for solar dampers in the US market.

Asked by Nikhil Upadhyay

Utilization of the sunroof second production line and future plans Direct
So the second line is not utilized at all. Currently, we are utilizing only one line. ... we intend to make that line as hybrid. And with the recent wins, the few models under development that I had already shared with you. ... we are looking at a very good utilization of the second line moving forward there. So the second line will get converted into hybrid line to ensure that we can make BLT as well as the TVS type sunroof.

Explains the current underutilization of a key asset and outlines the strategy to improve efficiency through hybrid conversion and new order integration.

Asked by Puneet Javeri

Impact of Free Trade Agreements (FTAs) on exports and competitiveness Direct
One is when we look at the deal with Europe, FTA with Europe, we already have our tech center there. We have an entity where we are working on various technologies. I think this would help us enhance the technology support there, definitely find more avenues on the technology front, number one. Number two, definitely, the -- because of the change in the duty, the FTA coming in, clearly, you compensate on the transportation cost of it. So you're -- the competitiveness goes up.

Details how recent FTAs are expected to boost export capabilities through technology and cost advantages, leading to new customer engagements.

Asked by Amit Hiranandani

Target and timeline for sunroof localization Direct
So current status of the localization is around 33%. It used to be around 26%, I think when we first started, if I'm not wrong. And we are -- the target is to take it to 60%. ... Within the next 1, 1.5 years, I think, yes. We are now working I think while we are having this call, there are already workshops going on. ... So by end of '26, '27, we intend to do that.

Provides a clear, quantifiable target and timeline for increasing localization, which is crucial for cost reduction and margin improvement.

Asked by Puneet Javeri

Market evolution and Gabriel's readiness for semi-active shocks Direct
The semi-active product is completely ready with us now. We just -- I think in the last 2, 3 months, we have done a complete tuning on 2 vehicles. Now the 2 POCs have been done on different customer vehicles... The penetration will be slow. Obviously, the cost impact is also significant... So it will be a slow progress there on the passenger car side. While it's one-odd variants will keep coming, I think maybe as you ask 5 years down the line, my estimate is that maybe top-end variants of some models may have this.

Outlines the company's preparedness for advanced technology and offers a realistic perspective on market adoption challenges and timelines for semi-active shocks.

Asked by Amit Hiranandani

3 min read 7 chapters

Detailed narrative

Q3 FY26 Financial Performance Overview

Gabriel India reported a strong Q3 FY26, with standalone operating revenue growing 16% year-on-year to INR1,072 crores. Standalone EBITDA increased by 21% to INR96 crores, resulting in an improved margin of 9% compared to 8.6% in Q3 FY25. On a consolidated basis, the company achieved INR1,179 crores in revenue, marking a 16% Y-o-Y growth, with consolidated EBITDA at INR111 crores and margins of 9.4%. Adjusted PAT, excluding a one-time exceptional expense of INR13 crores for the new Labor Code Act, grew 13% Y-o-Y to INR68 crores.

Significant New Business Wins and Product Development

The company secured a major new order for Hyundai sunroofs, encompassing 3 model variants of the TVS type, with an expected annual turnover of INR120 crores from a volume of 130,000 units, slated for SOP by December 2027. In the e-bike segment, Gabriel India received its first development order from a European customer, with production anticipated to begin in Q3 FY27. Additionally, the company has made inroads into Hero MotoCorp for the 2-wheeler segment, with one model currently under development and SOP expected by Q1/Q2 FY27, with further orders under discussion.

Sunroof Segment Strategy and Localization Efforts

The Inalfa Gabriel Sunroof Systems (IGSS) subsidiary contributed INR107 crores in revenue with EBITDA margins of 13.5% in Q3 FY26. The second manufacturing line for sunroofs is currently unutilized, primarily due to the underperformance of the Syros model. To enhance utilization, the company plans to convert this line into a hybrid model capable of producing both BLT and TVS type sunroofs, aiming for 60-70% utilization. Localization efforts are a key focus, with a target to increase sunroof localization from the current 33% to 60% within the next 1-1.5 years (by end of FY27).

Impact of Trade Agreements and Export Opportunities

Management highlighted the strategic advantages of the recently concluded India-EU Free Trade Agreement and the US-India trade deal, which reduces reciprocal tariffs from 25% to 18%. These agreements are expected to boost exports, foster technology partnerships, and improve competitiveness by offsetting transportation costs. The company has already received meeting requests from European customers and anticipates increased traction for solar dampers in the North American market due to these tariff changes.

Advanced Technologies: Semi-Active Shocks

Gabriel India has developed a semi-active shock product, with technology proving complete and two Proof of Concepts (POCs) successfully conducted on customer vehicles. While the penetration of semi-active shocks in the passenger car segment is expected to be slow over the next five years due to significant cost implications and the need for an electronics ecosystem, adoption in the 2-wheeler segment is anticipated to be faster. The company is leveraging its European tech center expertise for these advanced technologies.

Operational Efficiency and Cost Management

The improvement in Q3 FY26 margins was attributed to higher volumes and the continued impact of the CORE 90 operational excellence program. However, other expenses saw an INR8 crore Q-on-Q increase, primarily due to enhanced technical support from partners aimed at expediting new business and localization, alongside restructuring cost milestones. Management emphasized ongoing efforts with the Inalfa global team to increase localization, which is crucial for mitigating margin pressure from rising competition.

Capacity Expansion and Joint Venture Progress

Gabriel India is continuously expanding its capacity in the 2-wheeler segment, having recently cleared two more production lines in a Board meeting and exploring new manufacturing locations. Current 2-wheeler capacity utilization stands at approximately 70%, strategically maintained to accommodate festival season demand. The joint venture entity, SK Enmove, has been formally established, with equity contribution expected this quarter and operations set to commence in Q1 FY27, with initial expenditures noted as not substantial.

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