Gabriel India

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.

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.

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).

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.

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.

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.

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.