Known for its legacy in suspension systems, this Anand Group company is now stepping into high-value, premium product segments, from sunroofs and solar dampers to e-bike parts. </p><div id="paywall_11750141825246">
The company, Gabriel India, is planning this shift at a time when the auto industry is rapidly evolving, and margin pressures are prompting players to move up the value chain.
Gabriel’s new strategy promises revenue diversification and better profitability. But while strategic pivots seem promising on paper, they come with execution risks and market uncertainties.
Will Gabriel’s bet on premiumisation pay off? Can the company sustain margins while navigating the complexities of new product development and global competition? Let’s find out.
Inside Gabriel India’s core business
Gabriel India has established a significant presence across all automotive customer segments, including OEMs, aftermarket, and exports.
It manufactures over 500 models of ride control products. Its products include shock absorbers, struts, front forks and others.
The company’s domestic business caters to three main segments namely two- and three-wheelers (2W & 3W), passenger vehicles, and commercial vehicles.
The two and three-wheeler segment accounts for 63% of the total revenue of the company while the passenger vehicle (including aftermarket) accounts for 25%. Commercial vehicles (& railways) contribute to the remaining 11% of the revenue.
In the two- and three-wheeler segment, the company is the market leader with a 30% market share. It supplies most of the two-wheeler (except for Hero MotoCorp) and all the three-wheeler names in the auto industry. TVS Motors, Yamaha and Bajaj Auto are the top 3 customers for Gabriel India.
In the passenger vehicle segment, Maruti Suzuki, Volkswagen and Mahindra are its top three customers. In fact, Gabriel is a sole supplier of suspension systems for Volkswagen and Skoda in India.
In the commercial vehicle segment (&railways segment) as well the company holds a dominant share. Gabriel India is a major supplier of shock absorbers and dampers for commercial vehicles It also supplies various types of shock absorbers/dampers for the Indian Railways, including components for Vande Bharat trains.
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Gabriel India Segment Revenue – FY25
Source: BSE
Sunroof revenue
While Gabriel India has a stronghold in the various segments it operates in, it plans to leverage its position by actively expanding its product portfolio and market presence in newer areas like sunroofs, solar dampers, and e-bikes.
The company has already made considerable headway in the sunroof segment. It has a joint venture called Inalfa Gabriel Sunroof Systems Pvt. Ltd. (IGSS) with Dutch sunroof-maker Inalfa, which has a 25% global market share in sunroofs and a US$ 1.5 billion turnover.
IGSS began operations in the March 2024 quarter, backed by a projected investment of $22 million with plans to manufacture 200,000 units annually.
Since then, the company has grown on the back of demand for sunroofs, fueled by strong Utility Vehicle (UV) sales and frequent new model launches.
For FY25, the company reported a revenue of ₹420 crores with net profit margins of 8.1%. The sunroof business added meaningful heft to Gabriel India’s topline, contributing almost 10% to the company’s overall revenue of ₹4,063 crores.
Going ahead, the company is set to double its sunroof production capacity by the second half of 2025 to meet this growing demand. It currently has an order pipeline for two lines in Chennai and is in advanced discussions for various programs, including some in the western part of India.
At present, the company manufactures only the BLTA sunroof, a panoramic variant, which accounts for 100% of its production in this segment.
Localization stands at around 30%, which means that about 30% of the sunroof components are sourced locally. Gabriel India plans to increase this to 50–60% over the next 3 to 5 years. However, there won’t be much change in FY25 or FY26, as investment plans for higher localization are still being worked out.
The company’s vision for the sunroof vertical is to achieve ₹1,000 crores in revenue by 2030. It is aiming for double-digit EBITDA margins on a steady-state basis and is actively engaging with other OEMs to grow its presence.
The company is also in advanced discussions to finalize the PN3 reapplication related to the structure of the Inalfa JV. While details remain confidential, a 5% technology license fee and royalty are currently shared between Inalfa and Gabriel. The reapplication process is expected to conclude by the end of the current quarter.
Solar dampers emerge as the next growth bet
Gabriel India is also stepping into the solar damper space, recognizing the potential in solar energy setups, particularly solar trackers.
Solar dampers are crucial components in solar trackers, which align panels with the sun to maximize energy capture and improve overall efficiency. These dampers help control motion and reduce damage to the trackers, ensuring more efficient solar panels.
According to the company, the opportunity stands at around $326 million in 2025, with an anticipated annual growth of around 15% until 2030.
To tap into the space, Gabriel is already working with two export clients and one domestic customer in this space and has secured a couple of export orders along with one domestic win. Mass production is expected to begin later this year, followed by a gradual scale-up.
While order sizes haven’t been disclosed, Gabriel expects this to become a ₹200 crore-plus business within the next two years.
Over the next three years, the company is targeting revenues of ₹200 to 300 crores from solar dampers. The aim is to build a high-margin business, potentially more profitable than some of its conventional product lines.
This is not a volume-chasing play just yet. The company is taking a phased approach to better understand the product, technology, and market landscape before scaling aggressively.
Production will be housed within an existing facility, with a dedicated line being set up. No new plant is planned for now. Gabriel also has available capacity in gas dampers (a related category), with current utilization at around 68–70%.
However, any major push in this area would require fresh capacity investment down the line.
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E-bike components to push margins
After making strategic moves into sunroofs and solar dampers, Gabriel India is also tapping into a third high-potential segment, e-bike components, as part of its broader push into emerging mobility solutions.
The company is in advanced discussions with three to four OEMs in Europe and has already developed a few products that are being offered to potential customers. In one case, Gabriel is co-developing a differentiated product tailored to specific requirements.
The e-bike market is substantial, estimated at over $1 billion globally, with a wide price range for front forks, depending on bike type. While high-end models may fetch as much as $200, the mass-market sweet spot lies between $30 and $70.
According to the company, margins in this segment are generally attractive and better than some conventional products.
Gabriel is approaching this as a B2B play, working directly with e-bike manufacturers. Although formal letters of intent (LOIs) are still pending, the company believes the potential is significant.
At this stage, the focus remains on refining the product offering and securing firm commitments before providing specific revenue guidance. Once LOIs are signed and volumes confirmed, the company expects to have greater visibility on the top-line impact of this promising new vertical.
Balancing ambition with execution risk
Gabriel India’s strategic shift toward high-growth, premium segments such as sunroofs, solar dampers, and e-bike components is expected to diversify the company’s revenue streams meaningfully. However, these new bets come with their own execution challenges.
In thesunroof segment, while the company is planning to double its production capacity by the second half of 2025 to meet rising demand, the timeline for setting up a new facility in Western India remains unclear. This expansion is contingent on customer-led discussions, making the outcome hard to pin down.
Meanwhile, competitive intensity is rising. Current margins are elevated (15-20%) due to special pricing on a localized programme, but management has guided toward a normalized Ebitda margin of 10-14% for this business, signalling pressure ahead as new players enter and pricing dynamics evolve.
In thesolar dampers vertical, Gabriel is still in the early innings of market development. The company has acknowledged the need to understand the product, market, and technology in more detail before scaling materially beyond its initial revenue target of ₹200–300 crores over the next three years.
Adding to the uncertainty, the company notes that current orders are open, making it difficult to offer precise revenue visibility despite expecting this business to cross ₹200 crores within two years.
Thee-bike businessis at an even earlier stage. While product development is underway and discussions are ongoing with three to four OEMs in Europe, firm LOIs are still pending. This makes both topline and margin contributions harder to estimate in the near term.
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Solid fundamentals back strategic bets
Gabriel India’s financial track record over the past couple of years strongly supports its ongoing pivot to premium products.
Over the last five years, the company has delivered consistent growth in both revenue and profitability while maintaining a debt-free balance sheet. Sales have grown at a 14% CAGR, supported by steady domestic demand, while net profit has compounded at 20%.
Operating profit margins (OPM) have also improved, rising from 6% in FY21 to 9% in FY24 and FY25. The company’s shift toward premium segments like sunroofs, ride control systems, and EV-compatible components has supported this expansion. Going forward, this trend is expected to continue as these newer businesses scale.
Higher profitability has translated into impressive capital efficiency. The company’s Return on Equity (RoE) and Return on Capital Employed (RoCE) stand at 19.6% and 26.4%, respectively, among the best in its peer set.
The company also maintains a solid balance sheet, with a net cash position and efficient working capital management.
The company has cash and cash equivalents of ₹37.5 crores as of FY25. Long-standing relationships with suppliers and OEM clients have enabled favourable credit terms, resulting in a lean cash conversion cycle of just 21 days.
Valuations
Gabriel India’s stock has delivered impressive gains, rising over 40% in the past year. However, the surge in share price has driven valuations to elevated levels.
At a price-to-earnings ratio of 41.2x, the stock trades at almost double its 10-year average P/E of 21.6x. This premium pricing underscores strong market confidence but also implies a limited margin for error.
Expectations are high, and any execution miss or headwind in key verticals could negatively impact sentiment.
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Will the premiumization bet pay off?
Gabriel India’s pivot toward premiumisation is both bold and well-timed. As the auto components industry undergoes structural changes, the company is choosing to play offence, not defence.
That said, premiumisation is a long game. Much depends on execution. Competition, pricing pressures, and capex timing will also play key roles in determining whether these verticals deliver sustainable value.
However, Gabriel India’s strategy is sound and its financial base solid. If it can execute with precision, its bet on premium auto components could very well redefine its growth trajectory over the next decade.
For more such analysis, read Profit Pulse.
About the author: Ayesha Shetty is a research analyst registered with the Securities and Exchange Board of India. She is a certified Financial Risk Manager (FRM) and is working toward the Chartered Financial Analyst (CFA) designation.
Disclosure:The author does not hold shares in any of the companies discussed. The views expressed are for informational purposes only and should not be considered investment advice. Readers should conduct their own research and consult a financial professional before making investment decisions.
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