Gabriel India Q2 FY27 Earnings Call: Enters PV Seating Via Forvia JV, Plans Rs. 1,000-1,500 Cr Annual Capex

Gabriel India Ltd held its Q2 FY27 earnings call on October 30, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Strong Top Line, Softer Margin Flow-Through

• Q2 FY 2026-2027 consolidated revenue of Rs.1,608 crore, +23% YoY — EBITDA of Rs.141 crore (+12% YoY) at an 8.8% margin; H1 FY 2026-2027 revenue of Rs.3,034 crore (+19% YoY) with EBITDA of Rs.265 crore (+9% YoY) at 8.7%.
• Standalone Q2 FY 2026-2027 revenue of Rs.1,399 crore, +23% YoY — supported by the core suspension business, aftermarket operations and the Enchemco fluid business added through the completed restructuring; H1 standalone revenue Rs.2,673 crore (+21% YoY).
• Standalone Q2 adjusted EBITDA of Rs.115 crore (+15% YoY) at 8.2% margin — H1 adjusted EBITDA Rs.222 crore (+13% YoY) at 8.3%; standalone PBT before exceptionals Rs.89 crore (+7% YoY, 6.3% margin) in Q2 and Rs.188 crore (+17% YoY, 7% margin) in H1 FY 2026-2027.
• Consolidated PBT before exceptionals of Rs.148 crore in Q2 (+14% YoY, 9.2% margin) — H1 at Rs.281 crore (+10% YoY, 9.3% margin); share of PBT from equity-accounted investees (Dana Anand, Henkel Anand, SK Anur Gabriel, plus new investments HL Mando Anand and HL Clomo India) was Rs.48 crore in Q2 (+39% YoY) and Rs.91 crore in H1 (+24% YoY).
• Rs.1,000 crore of NCDs allotted in September 2026 — unsecured, rated, listed, redeemable, via private placement at an 8.15% annual coupon with a 3-year tenure, to fund strategic growth and expansion initiatives.
• Board declared an interim dividend of Rs.2.15 per share — face value Rs.1 each.
• Margin growth lagged revenue — management attributed subsidiary PAT pressure (Henkel subdued vs Dana performing well) to commodity cost inflation, rising logistics costs and a gap between customer price recovery and costs incurred, challenges common across Henkel, Dana and Gabriel; Dana's large export base provides an exchange-rate benefit that certain other businesses lack.

Entry Into PV Seating Anchors Vision 2030

• JV signed with Forvia on 6 October 2026 — JV entity Forvia Anand Seating India Pvt Ltd incorporated 19 October 2026 to develop, manufacture and supply seat frames and complete seating systems for passenger vehicles; Gabriel India to hold 50% less one share, Forvia 50% plus one share.
• Acquisition of Forvia's India seating business on a slump sale basis — that business runs at a Rs.250 crore revenue run rate with 10% margins (as of Q2 FY 2026-2027); the frame business transferring to Gabriel India is estimated at ~Rs.150 crore, moving across as-is at the prevailing 10% margin; deal closing targeted by December end (Q3 FY 2026-2027), with seat mechanisms excluded from the transfer.
• Mechanisms, estimated at 15-20% of overall car seat value (period unspecified) — will be procured from Forvia's 100%-owned Indian entity, keeping the full seating business scope within the JV's customer interface; the JV will quote for the entire seating system as the single face to the customer.
• Volkswagen business comes along with the JV — management confirmed the JV is formed around existing business already won; order book size not quantified, details to be shared once deal closing is done (timeline unspecified). New JV plants will be set up in Chennai and Pune (timeline not specified).
• Forvia's India ambition of ~10% seating market share over the next five years (from FY 2026-2027) — management said the partnership is fully aligned with "Forvia's four-wheeler seating ambition to reach approximately 10% market share in India over the next five years" as its first growth milestone.
• Passenger car seating sets carry an estimated product value of Rs.30,000-Rs.50,000 per car set (period unspecified) — management described the new JV products as high-value items; most JV technology will come from Forvia's R&D center in India, with a royalty fee management described as standard business practice.
• Vision 2030 target of Rs.50,000 crore reiterated by Anand Group — the two new FY 2026-2027 JVs (HL Clomo India for ADAS with HL Mando, and the Forvia seating JV) were described as very important to this journey, though management declined to quantify their revenue contribution; management said FY 2026-2027 market growth is taking the group closer but it is "not there yet."

ADAS Expansion and Sunroof Ramp

• ADAS draft regulation covers passenger cars, commercial vehicles and two/three-wheelers — management said the ADAS business "will definitely continue to grow in India" and is undertaking complete product mapping across all segments to take advantage of the revised notifications.
• Management expects ADAS to grow "much more than the industry" — ADAS penetration has already risen significantly over the last 4-5 years and is expected to continue growing; the JV has been in this business for the last 7-8 years ("not a new start") with manufacturing setups and technology in place.
• Analyst-cited market context — the ADAS market was already growing at 15-20% before the draft notification (period unspecified); the analyst noted growth could step up to 30-40% once the notification is implemented by 2032.
• HL Mando customer base broadened to all major OEMs — ~60-65% of business currently tied to Hyundai and Kia (as of Q2 FY 2026-2027), now expanding with Tata Motors, a new entry with Maruti Suzuki, and existing presence with Mahindra & Mahindra; management expects both HL Mando and HL Clomo to grow "definitely better than the market" over the next two years (FY 2027-2028 and FY 2028-2029), without quantifying rates.
• Sunroof programs progressing — AY1 did not pick up, VC4 has started, VC4I and VC4T are in commercial production, and the AI4 program in hand will come up in FY 2027-2028; the Bayon model just launched with the customer building stock, so near-term offtake is elevated and monthly rates should reduce once launch normalizes.
• Bayon volume indication of ~100,000 cars per annum (period unspecified) — per management's understanding of the customer's indication, split roughly ~60% India and ~40% outside India; panoramic sunroof is expected to account for 75-80% of the Bayon business, to be supplied by the company.
• Q2 FY 2026-2027 sunroof disruption from a supplier fire — a fire at one of the plants of a Hyundai supplier derailed the complete business for Hyundai, affecting the company's sunroof supplies to Hyundai and Kia; management noted this as an industry-level risk and said it will "wait and watch" despite good initial Bayon bookings.
• Continued bidding for new sunroof business, especially with Tata and Mahindra — capacity expansion (potentially via capex or capacity relocation, depending on the customer) will be considered once new business materializes; management is looking for one more sunroof SOP in FY 2027-2028, with the Hyundai and Kia pipeline moving into different production phases in FY 2027-2028.

Industry Tailwinds, Mix-Driven PV Lag

• Two-wheeler production up 16.5% YoY in Q2 FY 2026-2027 — H1 FY 2026-2027 up 19.5%, with scooters up 31% and motorcycles up 14%; three-wheeler production up 24% YoY in Q2 and 31.5% in H1 on strong last-mile mobility and cargo demand.
• Passenger vehicle production up 25% YoY in Q2 FY 2026-2027 — H1 up 21%, with utility vehicles up 25% in H1 on sustained SUV preference; commercial vehicle production up 34% YoY in Q2 (H1: 25%; LCV 27%, M&HCV 21%).
• Management attributed industry strength to GST-led affordability, improving financing conditions, resilient rural demand and festive momentum — while flagging geopolitical uncertainties and volatility in crude oil and commodity prices as key factors to monitor.
• CV growth exactly matched industry growth in Q2 FY 2026-2027 — per MD Atul Jaggi, given Gabriel's more than 85% market share; reported CV numbers include aftermarket and railway, and aftermarket grew slower in Q2 due to OEM pressure versus a much higher Q2 FY 2025-2026 base.
• PV shock absorber lag is a model-mix issue — responding to analyst Amit Hiranandani's flag of H1 FY 2026-2027 market share loss, Jaggi attributed the Q2 shortfall to post-GST-norm small-car growth outpacing models where Gabriel is present; on CV he said there is "nothing to worry about."
• EV two-wheeler order book described as "quite strong" — Gabriel commenced supplies for the Bajaj Chetak EV model in Q2 FY 2026-2027 (last month), a model previously missing from its Bajaj EV portfolio; management cited a good pipeline with most two-wheeler customers, several launching new models in ramp-up.
• Fluids (Enchemco) margin pressure persisted through Q2 FY 2026-2027 — the higher-margin fluids business has seen EBITDA margin decline over the last three quarters; Jaggi noted Enchemco is a very small part of overall business and is exposed to urea prices, which shot up in Q2 instead of softening as expected, with the customer price-recovery lag continuing, though the business is otherwise doing quite well.

Heavy Capex Cycle, Returns to Converge

• Consolidated capex expected at Rs.1,000-1,500 crore per annum for FY27 and the coming three years — driven by capacity additions, a new plant and plant-level improvements.
• HLL Claymove ROE/ROCE currently sub-10% (FY 2026-2027) — flagged by analyst Jay Kale (Elara Capital); Mahindra Goyal attributed this to the initial phase after heavy capital investment over the last couple of years and expects ROI to improve as capacity utilization rises, with no specific timeline given.
• Management affirmed HLL Claymove returns will trend toward the company average on a steady-state basis — stating "we don't compromise on the ROI" and characterizing the current low-return phase as temporary; no numeric return target was provided.
• Sunroof margins remained depressed in H1 FY 2026-2027 — management said nothing has changed fundamentally, the situation is better than last year and new business is in place, with pressure attributed to unfavorable commodity prices and forex; the company is working with the customer to secure recovery.
• Hyundai's Creta appears to be phasing out in FY 2027-2028 — but Gabriel will continue supplying the Creta EV model; supplies also continue on the AYI, PS7I, VC4I and T programs, with a new AI4-side program expected in future; the AI4 program is slated for production in FY 2027-2028 with significant volume expected, and the company is currently in a bidding position with other customers.
• Festive season demand strong but supply-side pressure flagged — management observed the auto industry continues to perform very well during the ongoing festive season (an industry-wide comment, not a company-specific commitment), and noted significant supply-side pressure in FY 2026-2027 while stating the company continues to fulfill customer requirements.