Gabriel India Ltd. — Q1 FY27 earnings call

Good morning everyone. Hope you can hear me clearly and loudly. As part of JBL's ongoing inorganic growth journey and commitment to building scale, technology, leadership, and future credit capabilities, we are pleased to share that the Board of Directors yesterday approved two strategic transactions. One is related to acquisition of 28.9999 equity.

We have taken HL Mando Anand India Private Limited from Asia Investment Private Limited for a total consideration of rupees 2231 crores and we also acquired 30% minus one share equity in HL Cromo India for a total cash consideration of US dollar 98.44 million as part of a proposed joint venture with HL Cromo.

These investments represent an important milestone in the annals group long-term what about industry and enforce our commitment to creating a simpler, more integrated and future ready enterprise. They build on successful execution of project Rise which is under listing approval from the stock exchange under which Gabriel acquired equity stakes in and few of the businesses Dana, Anand, Henkel, Anand and these are bringing the

Right in products and of course adhesive structural and NVH solutions. Uh, we further diversified our product offering through the acquisition of 76.1% stake in Anand Sewai Nutik and the merger of Enkemco India's high performance automotive chemical and fluid business into the Gabriel.

We are pleased to report that project rise has been completed successfully as I said, we are just waiting for the approval from the stock exchange for the listing. The successful execution of the important strategic initiative marks a significant milestone in our journey and has already contributed an acceleration in EPS. This has been a central objective of the strategic action undertaken by the Anand Group with a clear focus on enhancing value creation and strengthening our competitive position and driving sustainable long-term growth.

The progress we have achieved to reinforce our confidence in direction of our strategy and the opportunities that lie ahead.

Building on this momentum, the board has now approved Project Jupiter. Through this initiative, Gearbill India will acquire strategic minority stake in HCL Anand, Mando Anand India Private Limited and HCL Cromo India Private Limited. Further strengthening its position as the group automotive component platform. We have also uploaded a detailed which is a business update presentation which is self-explanatory and has all the relevant details on both transaction under Project Jupiter.

Before I hand over to Mr. Jaggi for the operational and financial update for the quarter, let me briefly outline these two strategic investments, starting with HL Mando Anand India Limited. HL Anand Mando Anand India Limited is a leading automotive components company engaged in breaking steering system and power of suspension business. For the passenger vehicle, the investment will strengthen Gabriel's presence across key automotive component segment.

is definitely broadening our product portfolio and which is creating long-term value through operational, technological, and business synergies. To provide a sense of the scale, this company has a turnover around ₹5886 crore, the largest company of the Anand Group, and profit after tax of ₹358 crore in the financial year 2025-26. The company had a net worth of ₹1924 crore.

Gabriel India will acquire 28.99 stake from Asia Investment Private Limited, a promoter of Gabriel India. The acquisition will be funded through a combination of equity and cash transaction consideration. Under the transaction, Gabriel India will allot 1.44 crore equity share to Asia Investment at an issue price of 1305.89 per share, aggregating to rupees 1881 crore and balance 350 crore will be paid in cash, taking the total transaction.

And consideration to 2231 crore.

Additional information on HL Mendu Anand is available on slide 13, 14, 15 of the business update presentation. The strategic rational is clear to consider the group investment in HL Mendu Anand under Jabrels India, aligning his highly quality business with listed automotive components platform and enabling both the companies and its public shareholders to participate directly in the future value creation. Another transaction was with respect to the HL Cromo, which is a new investment or a new joint venture.

which is primarily in the business of ADAS. Uh, we have entered into a joint venture agreement with HL Cromo India, creating a significant opportunity for again Gabriel to participate in high value technology segment including advanced driving assistance system and auto drive electronics. Importantly, this partnership provides access to the advanced capabilities and technology that would have taken considerably longer to build originally.

HCL Cromo India reported revenue of 1000 crores plus and profit after tax of 123 crore in financial year 2026. As part of the transaction, Gabriel India will acquire 30% minus one equity share in HCL Cromo India for a total consideration of 98.44 million. The investment will be completed in two tons. will be paying 73.83 million USD on or before 15th September 2026. Balance

USD 24.61 million within 18 months of signing the definitive agreements. The acquisition will be funded through a combination of internal accruals and that. Further details are available on slides 17, 18 and 19 of the business update presentation. The objective of this investment and joint venture is to establish meaningful presence in India's fast growing adult business through a strong partnership with HCL Global. Together these strategic initiatives positioning Gabriel A

Gable India as Anand's primarily growth vehicle and business consolidation platform for the automotive component sector. Based on our portfolio, deepen our technology capabilities, expand our addressable market and enhance our ability to create sustainable long-term value for all stakeholders. With project Jupiter, we are not simply adding new investment to our portfolio, we are taking the next step in Gable India's transformation, building a stronger, more technology driven and a future ready enterprise.

Supported by world-class partnerships and position to capitalize on the evolving opportunities within the automotive industry. So thank you so much and now I'll hand over to Mr. Atul Chakni for operational and financial updates for the quarter. Yeah.

Uh, thank you, Mr. Goel. Good morning, everyone, and a warm welcome to everybody who has joined the call. I hope all of you are doing well.

So, the manufacturing activity in the automotive industry remained very positive during the first quarter of FY27 with production increasing across all major vehicle categories.

Two-wheeler production expanded by 23% year-on-year during the quarter one FY27. Scooters were the strongest contributor recording growth of 32% while motorcycle production increased by 18%. In the passenger vehicles, industry production rose by 17% year-on-year during the quarter. Utility vehicles continue to lead the segment with production increasing by 21%, reflecting the continued shift in customer preference towards SUVs and crossovers.

Coming to the commercial vehicle production increased by 15% in the quarter one FY27. LCV has delivered a very strong growth of 21% and MHCV production was higher by 6%. At the same time, crude oil and commodity price volatility along with the other geopolitical developments in the West Asia remained important factors to monitor because of their potential impact on the input cost, vehicle ownership economics and customer sentiments.

Coming to the quarter one FY27 performance, before taking you through the financial performance, I would like to briefly explain the reporting structure following the completion of the restructuring.

The financial results for quarter 1 FY27 reflect the expanded business portfolio of Yable India. To facilitate a meaningful comparison, the corresponding quarter 1 FY26 figures have also been presented after incorporating the financial performance of the businesses covered under the restructuring. Therefore, the year-on-year comparison discussed today are also on a like-to-like basis. Coming to the standalone performance, revenue from operations grew by 19%.

to 1274 crores in quarter one FY27. The performance was supported by healthy demand across the core suspension business. Continued growth in after market and contribution from the Nchemco business adding added through the restructuring. Standalone EBIDA increased by 7% to 207 crores compared with 100 crores in quarter one FY26. The EBIDA margin stood at 8.4% in quarter one FY27.

Moving to our consolidated performance, revenue from operations stood at 1426 crore in quarter one FY27, a growth of 15.5% YOY. Consolidated EBITDA for the quarter stood at 124 crores, reflecting a growth of 2.3% YOY. The EBITDA margins stood at 8.7% in the first quarter. The share of profit before tax in equity accounted in invested companies, Dena Anand India Private Limited, Hankel Anand India Private Limited.

Private Limited and SKM Movable India Private Limited has increased by 10% YOY. This is from 39 crores in quarter one FY26 to 43 crores in quarter one FY27. The EBT stood at 133 crores, a growth of 6% year on year with margins standing at 9.3%. The consolidated performance reflects the contribution from our subsidiaries together with the company's share of earning from joint ventures and associates under the ex-

standard business structure. We have also presented the FY26 financial performance by incorporating the businesses covered under the restructuring in both the reported financials and the presentation. On that note, we come to the end of our opinion remarks. I now request the moderator to begin the question and answer session. Thank you so much.

So any one question, yeah? Okay. So, I think our relationship with with HL Mendel group goes back to 1996. So it has been a journey of almost 30 years now and started with with single product, started with breaks and of course from time to time we have been adding expanding this group.

relationship as the trust between the partners increasing. I think we have added multiple products. We added breaking, started with breaking, we added suspension and we later added steering products actually, you know. So happy to share that in 30 years time, of course, we had many other businesses also within Anand Group, but this company has grown the most. I think this company has grown the most.

has reached to almost 5,500 plus very close to the 6,000 crores if you see the result of 2026. So, of course this 25 years 30 years relationship has built up a lot of confidence. They have seen us, we have seen their manufacturing capabilities and of course what they are doing on on the new technologies actually. So, so this is

Overall on the HL Mando and of course we are increasing our relationship with HL Mando again with HL Cromo the same group. And of course as a as a overall expansion plan in Korea Mando HL Mando group has been consistently working on on the ADAS products for last 7-8 years. They have brought special focus on this business by creating it.

a separate entity which was part of the consolidated entity earlier in Korea. So, so that is one, of course, as you know that most of most of the people they want to do business in India, they look for partner as well. I think since we have a very strong relationship and we also trusted many things not only from from the people point of view but also from management capabilities.

their strength in Korea, their succession plan. I think you are very, very confident that we can expand our relationship with the group. And therefore, I think based on our current relationship, we became also the very trusted partner for them in India. And so we joined them together and happy to take this company up together now. I think so that is what all the story behind this.

Okay, so I think it's very difficult to share the overall numbers, but yes, as we look at this business and would like to just answer maybe what is built up in the pricing also of this transaction. I think we have a great hope from this business. The business pipeline is very strong and the company has been working with good thing is not only with Korean customers, this company has been working with with mine customers.

Mahindra and with Tata Motors actually. So that is one of the important thing and just to share a small thing on this that the Mahindra new vehicle which they have launched in last two weeks this company has a business similarly with Tata Motors. I think the growth opportunities are enormous from this business because the product cost itself is very large actually. The per vehicle cost becomes very very large which help us to take turnover.

were very significantly high in very few years actually. So I think we have a very high expectation and and see that in our journey of 50,000 crore in 2030, this company will make significant difference actually.

Yeah.

thank you. I think localization point of view if we look at the first transaction which is with respect to the actual Mando Anand. I think there is a fair level of the localization has already reached. And from the business perspective this company was depending on Korean Korean customers. Very pleased to share that the dependence has significantly reduced. Now almost I think say

40% of the business is coming from non-Korean companies with respect to HL Mando actually. So we have opened door with all the customers. We started with Hyundai, of course, when Kia came in. So we had a business with Kia. Now we are with Tata Motors, we are with Mahindra, we are with Maruti Suzuki as well actually. So I think HL Mando is well poised from that point of view and when you look at the other transaction on the HL Cromo side.

the localization will start. I think we are as as the industry will move, I think there are fair plan to further localize. And as I said already from the business perspective, other than Korean customers, we are there with Mahindra. We are there with there with Tata. I think the primarily the only one customer is left, Maruti Suzuki and of course that is something as they appropriately adopt this ADAS technology.

also we will have opportunities with them as well, you know. I mean so far they have not reached to a level where adopting a proper level of that task. So I think those opportunity will emerge at the OEM will have the plans actually.

Okay. So, I think I look at it overall group perspective. So, we are 50,000 crore and will be targeting in 2030. That is what our plan is. And when we look at it, the Gabriel becomes definitely the key entity for bringing these growth opportunities. So right now, we are focusing on automotive components group businesses. What we

we intend to bring to the Gabriel India. And yes, not limiting ourselves to the passenger car. I think there's no such strategy that we will be only limiting to the passenger car. Our growth is is is around you know, commercial vehicle. We have a lot of focus on the two-wheeler side actually, the business that is another segment which is growing. And we also intend to bring

you know, focus on the off-highway segment that is also going to be our priority as as one of the growth area. So these are these are some of the initiative on on the EV side. Yes, we have a separate vertical already which is which is there in the name of N World which we started sometime back. So that is still progressing actually. So we have we used to a matured level but it's still progressing actually basically.

So, so in a nutshell I think we are not favorite to any segment and we are not adverse to any segment but yes we will stay with the automotive segment actually from the growth perspective.

So one was the question on the regulatory events related to this transit.

I think regulatory events is primarily is already approved by the board of directors. So that is done and therefore we replace both the transactions.

Uh yeah, I think if you look at both the products are to deal with the safety and you can see from the safety perspective the regulatory changes which may emerge in future is definitely going to help both the products actually when you look at from the steering point of view or from the braking point of view which is part of HL Mando and if you look at the HL Cromo which is primarily again the steering point of view and the braking point of view which is part of HL Mando and if you look at the HL Cromo which is primarily against the steering point

going to to deal with ADAS products actually and you can see what is happening now the ADAS regulations are being effective. I think there are different level of ADAS technology. I see this is happening in commercial vehicle at a lower level and of course the things are moving in the passenger car as well. So so looking from the future perspective the regulatory will only help growing these businesses.

you know, whether it is breaking or is it steering or it is ADAS, because all to deal with safety. So we see the positive impact in future of all those changes as far as the business is concerned. And one more thing which is also very important to understand that, you know, the ADAS is to deal with breaking and steering actually, you know, so it's a very integrated solution which we should be able to provide from the technology point of view, which I'm not sure that when

Very easy that someone else will try to bring it to the customer actually. So, so I think it should all help in the growth of the business.

Uh, I think, uh, one of, one of the things was with respect to the sunroof business, uh, that is primarily, uh, I'm sure you must have heard that, uh, there was a, uh, you know, some issue, the operating issue at one of the supplier of Hyundai, uh, movies and where, uh, the Hyundai was not able to produce, uh, you know, the, uh, the vehicles actually, uh, almost our, uh, business was down because of, uh, the Hyundai was not able to produce the Creta and that is the reason.

impacted the business especially in the sunroof. So, so that is creating some impact in the current quarter actually. But I think as we look at from the customer perspective, they say that they should be able to recover the production which they lost in the first quarter.

Thank you again. I think it's a it's a issue with respect to some of the commodity changes which we started with Middle East situation. So you know that has impacted and we account for these recoveries on the actual basis. I think these impacts will come in future in their in their profitability actually.

yes the content per vehicle will always depend actually but I think in my view it can go I think my estimate is maybe 20000 to 60 70000 per vehicle all will depend what kind of a level the customer our OEMs would like to target in their vehicle but I think the content can go as high as 60000 and as low as maybe 20000 or or slightly.

actually, you know, so that is that is one part of information and I think there are fair localization plan. So those those details we will continue to share with you. But as we look at we are entering into the joint venture as we examine the business plan, I think there are fair localization plan in this direction as well.

Yeah.

So thanks, I think from the exports perspective, right now we do maybe 7 to 8% of the current business size exports. And I can't guide you any number in future, but I would like to generally relate with the overall business outlook what most of our partners are looking including including HL Mendo. I think what generally the dialogue is going on is that

The question is that how India becomes a manufacturing sector for supporting their businesses out of India actually. So that is the theory, that is the objective which will drive further exports as we move ahead in future years. So that is something which we are very confident that the export opportunities will emerge with this direction of our partner.

That's actually, that is one part and second is with respect to ADAS. I think as I mentioned that I think all new vehicles you see this this configuration is there on the software point of view of the ADAS. I think it's a it's a need in my view and it's a additional feature which which OEMs are building into their vehicle. So so that is something which I would say that there will be a

Uh, overall focus from, uh, from the OEM point of view and what we can bring to the table. Uh, uh, I mentioned already that, uh, we will be the unique players which are bringing braking, steering, and ADAS together actually to the OEM. And one can understand that ADAS is to do everything with braking or the steering actually, you know. So, so if you look at this concept, we become one of the unique supplier in India to, to give provide in the OEM.

integrated solution to the OEMs actually. And as far as our capabilities are concerned, we have a huge number of people who are in India and who are also in Korea working in engineering centers and those facilities are definitely helping us to grow the technology actually.

So it is, so whatever is required for the vehicle software for the business which we will be targeting in India. So that will, services will be availed from the engineering centers and that become part of our business. But we are not participating in any business which is outside of India actually.

Yeah, okay. So, coming to the first question on the margins on the standalone business. Yes, if you look at the details of the number, there has been in this quarter, there has been pressure on the inflation cost due to the commodity inflation that has happened. So it is a combination of impact that comes on a mathematical level because once even if the recovery is there, there is always a denominator impact that comes in and second.

Only there is, sometimes there is also a little lag in the recovery. Uh, what you are spending in the month doesn't get recovered in the same month there. So, uh, the recoveries are, uh, are sort of getting in aligned with the customers. Some of them already settled, some of them, uh, in the discussion. Uh, but you know, uh, sometimes it can take some time to release the purchase orders, etcetera. And based on that only we

So, the yes, whatever there is a delay in recovery, we are looking forward to the next quarters to make the recovery. That is on the margin part. Secondly, on the sunroof business, I think Mr. Goel already mentioned there was some challenges with one of the suppliers leading to the lower production. The I think the overall number when we look at the quarter, they're around I think somewhere around 15 to 20,000 numbers that could have been produced more. The good thing is that the customer is

has started pulling those numbers. They are very confident of making up those gaps in this quarter and the next quarter, and I think from the budget point of view, we are not looking at any shortfall coming in because it is a timing issue definitely for something which is completely beyond the control of whether the OEM or all the suppliers, but we are not looking at any shortfall coming in.

So, I think if you look at smaller cars, the growth is significantly higher than the market growth, but the gap is primarily on account of the UV is there. Some of the models I think that have performed really well. We are not there on those platforms and some of the biggest customers overall wallet share has been coming down, so that is also impacting because we are very strong there. So it is a model mix.

issue I think for the quarter which is leading to this change.

Uh, again, see these things, uh, they purely depend upon the model where you are present and how the model, uh, the new launches will perform. So, obviously, given our choice, I would like all our models to do exceedingly well. Uh, let us keep differences crossed, but yes, the model mix issue has sometimes been very supportive also, and sometimes it can be a challenge. But yes, I think generally it averages out over a period of time.

Can you, uh, can you be a little clearer? I think either you are on a speaker or you are at a place where it is, uh, the voice is, uh, you can't, yeah. I think maybe if you speak a little slowly and, uh, don't use the speaker, it will be helpful, please.

Yes sir, yes sir, better.

No. No.

Hello

Yeah, I think from the business perspective, we don't see right now Tata having business with HL Mando. As whatever we talked about, it was related to the sharing products from the HL Mando side. In the Tata, we don't have any business with Tata Motors and that is what it is. I think from the technology point of view, they are they are well ahead as per the market. So we don't see any issue.

And in fact, with this transaction, it becomes complementary actually for us whether the business is in Tata Motors with Mando HL Mando or with Gabriel. Finally, it becomes part of the Gabriel actually as this consolidation actually. So that is in fact helping us to integrating the technology directly or indirectly and also the business into our fold.

too early to comment actually the transaction is just announced. It is not even closed actually, let's say. So I think these discussion will fall in place maybe once the transaction is also closed. So as you would see that it was announced last month. I think the process has to close from the process point of view and then I think these discussion may take place but but right now our joint venture has been doing very very good. best business and

when we do look at any integration solution in future, maybe we have to see whether it is right for us or not to go with the eaten actually, you know, considering our the way we the business is performing currently actually. So I think those analysis will take place later, you know, and that's too early right now actually.

I think the reference that you are taking is predominantly on the, I would say, the suspension part of the business of the handloom business where I think a couple of points were discussed. One was the capex part, the extensions that we are doing in various locations including the one in the largest plant around Hosur, but it is not only limited to Hosur.

It is also across certain other expansions because we are expanding the plant in Khansa, which is Gurgaon. We are also making expansions in our Sanam plant. I think it was a combination of all the expansions and new investments including the technology investments that we are making on the suspension business. On the export part, I think we discussed predominantly on the way forward on the export opportunities that we are looking at potentially.

potential opportunities on the cotton chocolate absorber side and also on the solar and e-bike side. So I think this is the combination of all three, we had set up a target of 10% exports in the coming timeline. So this is to answer your question.

I think if you see as we have been talking last one year whole project arise that the Gabriel is our growth engine and that's what we have been talking and our idea is to also look at bringing new businesses into Gabriel and also as appropriately fitting bringing the existing business into the the Gabriel fold from Asia actually or from the Anand. So, so we made significant progress.

So as you can see that with project rise, we reached up to the 58% of the group sale and with now project Jupiter, which is Bando, which I said the largest business which we are bringing into the April fold. So we'll be reaching almost 70%. So the balance 30% is left. I think at appropriate time as we as we have seen, you know, in past, so those efforts will be there as they are, you know, appropriately funded.

from the strategy point of view or from the partner's perspective also. So we don't deny that those will not come. But yes, timeline we have to see as as it is appropriate actually.

Okay, uh, there is no option right now, but it doesn't mean that we can't do that. I think, uh, if I look at, uh, overall the global scenario, mostly, uh, the people will look, uh, for an opportunity to, to, uh, give us opportunity to increase our share because they also need cash. And as, as Indian market is doing good, definitely our desire will be to increase our stake actually basically. So if it is not in action,

Agreement, it doesn't mean that it is not possible, you know. Everything can be, can be discussed and decided whatever is not written in the agreements.

I think we have already shared our information which is there in in the investor tag which is uploaded. already I think if we look at the 2026 results we are talking around 1000 crore of the company in the current year financial year 26 which is right now unaudited results but is very close to the audit and we are looking for a adjustment.

I said a debit of around ₹129 crore from this business actually. That is again unaudited but very close to the audit. This is something which is there and as far as the facilities are concerned, the facilities are there manufacturing in Chennai, which is also very, very much given in our investor tag actually.

So you can refer slide 13 and 20 which will give you the details of both the entities. I think all the expected answers are there on these two slides.

₹220 yeah.

I think the company started with with supporting HL Mando in India and so therefore that whatever as a supplier they are working that continue to work. So it means that if HL Mando is growing business and the projects which are primarily related to the ECU and those will continue. But from the HL Clovo indefinitely, I think that is not the strategy that they will only depend on.

HL Mando, our primary aim, not only aim, it's already started actually. So, we have good business with Mahindra Secured, we have good business with Tata Secured already. Those are in their upcoming vehicle which are already on the road and the product side also I shared almost 50 to 60,000 crore per vehicle set. So we have all good good future and and for HL Promo but certainly our target is is just to support for HL Mando that continues.

Because there's no point in replicating the facilities at two places. But the primary objective is to grow independently business on the other side as far as the HL global is concerned actually, you know. But good thing for us that we are partnering both. So even any transaction happening within these companies today is helping us overall.

Hello

Uh, sorry, can you say again what was it?

Question was that there are other products like actuators and rope. Rope. I think as as this is well explained even if you look at the HL Mando group also I think we started with one product over a period of time we continued to add the product. Similarly so that is that happens in any joint venture once the relationship is there the trust is there which is there for in the last 30 years. Obviously this this has just I think signed off now and obviously at the application.

At the appropriate time, we will also look at the opportunities, more opportunities coming in the Indian market and we'll continue to explore expanding the portfolio. But giving a sort of a firm answer today on this, I think it is too early.

Only only one thing is to understand that I think we are their partner in India. So anything Mando do globally which they want to bring to India, I think we become the preferred partner for the businesses actually.

So I think we already answered that same thing that we started this journey with the Project Rise and now with the Project Jupiter and we have been very openly talking to all of you that our aim is to bring new investment in Gabriel and also look at appropriate opportunity to transfer the existing business into the Gabriel port. So significant portion is already done with this transaction and of course as it is appropriate we will also look at the future of the business.

other businesses at the right time basically.

Yeah, great.

Thank you so much for participating in today's call and we hope that we have been able to address all your queries. For any further information, kindly get in touch with any of us or a strategic growth advisor or investor relation advisors and thank you once again for your participation. Thank you so much. Have a good day.