Release Date: October 23, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Gabriel India Ltd (BOM:505714, Financial) reported a 6.9% year-on-year increase in operating revenue, reaching INR924 crores, driven by improvements in 2-wheeler and EV 2-wheeler sales.
- The company declared an interim dividend of INR1.75 per share, reflecting a strong financial position.
- EBITDA margins remained stable at 8.7%, and PAT showed a 12.2% year-on-year growth, indicating solid profitability.
- The two-wheeler and three-wheeler segments experienced impressive growth, with scooters leading at 16.7% and motorcycles and mopeds growing by 11.3% and 17.9%, respectively.
- Gabriel India Ltd (BOM:505714) is actively expanding its product range and focusing on innovation, maintaining its market leadership across key segments like 2-wheelers, 3-wheelers, and EVs.
Negative Points
- Passenger vehicle sales volume saw a slight decline of 0.6% year-on-year, indicating softer demand in this segment.
- The commercial vehicle sector experienced a year-on-year degrowth of 9.2%, with domestic demand remaining weak due to extended monsoon delays and reduced infrastructure spending.
- Despite strong export growth in the CV sector, the overall domestic market performance was weak, showing an 11% decline.
- The company faces challenges in achieving double-digit EBITDA margins for its standalone business, with ongoing efforts needed to improve profitability.
- The sunroof business, while showing strong margins, faces potential margin fluctuations due to competition and product mix changes.
Q & A Highlights
Q: What are the strategic priorities for Gabriel India under the new Managing Director, Atul Jaggi?
A: Atul Jaggi, the MD, stated that while the overall strategy remains consistent, there will be a renewed focus on exports, margin improvement, and technology. The company aims to expedite initiatives in these areas to drive growth and enhance profitability.
Q: Can you provide an update on the subsidiary business and any changes in royalty or tech license fees?
A: Rishi Luharuka, CFO, mentioned that discussions are ongoing regarding the PN3 application and potential re-approach to the government. The subsidiary will remain wholly owned by Gabriel India until further developments.
Q: What is driving the increase in realizations and margins for the subsidiary business?
A: The increase is attributed to the start of supplying the Alcazar platform, which has led to better operating leverage and localization benefits. However, the CFO cautioned against reading too much into the current growth figures.
Q: What are the plans for the sunroof business, and how does it impact future growth?
A: The company plans to install a second production line by 2025, with full utilization expected by 2026. They have secured an export order and are in talks for additional orders, including an EV platform.
Q: How is Gabriel India addressing the challenges in the commercial vehicle segment?
A: The company is focusing on export markets for commercial vehicles, given the high domestic market share. They are working on expanding their product portfolio and exploring new opportunities with existing customers.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
