Conference Call with Endurance Technologies Management and Analysts on Q3FY24 Performance and Outlook. Listen to the full earnings transcript.
Auto Parts & Equipment company Endurance Technologies announced 9MFY24 results: Consolidated Total Income, including Other Income, increased by 15.5% YoY, reaching Rs 76,152 million from Rs 65,943 million. 77% of Consolidated Total Income, including Other Income, originated from Indian operations (including Maxwell), with the remaining from European operations. Standalone Total Income, including Other Income, for the period experienced a growth of 13.5%. Consolidated EBITDA Margin improved to 13.1% from 11.8% last year, with margin expansion observed in both standalone and European businesses. Consolidated Profit After Tax (PAT) amounted to Rs 4,703 million, marking a 37.1% increase compared to the previous year. Aftermarket sales from Indian operations stood at Rs 3,257 million, compared to Rs 3,085 million in the corresponding period of the previous year. Consolidated Basic and Diluted Earnings Per Share (EPS) for the period stood at Rs 33.44 per share (not annualized), up from Rs 24.39 per share (not annualized) in the corresponding period of the previous year. Commenting on the Company's performance and recent developments, Anurang Jain, Managing Director of the Company, stated: "On a YoY basis, Indian two-wheeler sales volumes in Q3FY24 have grown by 18.7%. Endurance standalone Total Income rose 25.1% despite lower metal costs. Our European business turnover in Euro terms grew at 5.4%, in line with the growth in EU new car registration numbers. The Indian EV two-wheeler market is at an interesting juncture. Phasing out of FAME-II subsidies in June led to a sharp drop in market size, but the market has since recovered. The recovery has been largely led by certain OEMs who were relatively late entrants in the EV fray. With subsidy allocation for two-wheelers widely expected to be lower in FAME-III, OEMs are cognizant about the need to ensure cutting-edge capabilities in the ecosystem to grow the EV market and their own market share. Two-wheeler EV OEMs, both traditional and new-age, recognize us for our ability to design, develop, and produce components such as suspensions, brakes, machined aluminum castings, and BMS, with a focus on performance, durability, and cost. We achieve excellence in this area by offering technology acquired from international players, which is further cost-optimized, localized, and improved by our 300+ R&D; engineers. For EV two-wheelers, we already have capacity for incremental production for suspensions and brakes and have embarked upon projects at Aurangabad and Chennai to add capacity for casting and machining of aluminum components. We have also commenced today, commercial production of BMS ECUs on our newly installed SMT line at Aurangabad. In the Indian passenger vehicles market, the pace of powertrain electrification has been slow, but the signs are encouraging. Our European subsidiaries have won orders for a large number of parts for EVs and Hybrid vehicles. Several of these parts are already in production. As the Indian market matures, we would use our experience in Europe to improve our process technology for EV and hybrid-focused casting and machining in India. While the future pace of electrification in mobility is not ascertained, it appears quite certain that the Indian economy will see good growth, and a large number of families will experience personal mobility for the first time, and that bodes well for our sector." Result PDF
Auto Parts & Equipment company Endurance Technologies announced H1FY24 results: Consolidated Total Income, including Other Income, for the period rose by 12% YoY to Rs 50,271 million from Rs 44,876 million. 77% of Consolidated Total Income including Other Income came from Indian operations (including Maxwell) and the balance came from European operations. Standalone Total Income, including Other Income, for the period grew by 8.2%. Consolidated EBITDA Margin was 13.4% vs. 11.7% last year, with margin expansion both in the standalone and the Europe business. Consolidated PAT at Rs 3,181 million was 35.4% higher than last year. Aftermarket sales from Indian operations stood at Rs 2,177 million vs Rs 2,007 million in the corresponding period of last year, with export markets showing signs of recovery. Consolidated Basic and Diluted EPS for the period stood at Rs 22.61 per share (not annualized) compared to Rs 16.70 per share (not annualized) in the corresponding period of last year. Commenting on the company’s performance and recent developments, Anurang Jain, Managing Director of the Company said, “On a YoY basis, Indian two-wheeler sales volumes in Q2FY24 have de-grown by 2.4%. Endurance standalone Total Income rose 3.8% despite lower metal costs. EU new car registration numbers grew by 14.8%. This was significantly on account of the drawdown of vehicle inventory, as is evidenced by Germany's car production growth of 3.7% trailing their new car registration growth of 17.7%. Our European business turnover in Euro terms rose 10.1%. While Indian OEMs sold 24.5 million two-wheelers in FY19, this number had dropped for 3 consecutive years to 18 million in FY22. Thereafter, the industry recorded 8.3% growth in FY23 to reach 19.5 million and has again de-grown in H1FY24. Consumer sentiment is bound to improve in the long run with stabilization on the geo-political front, economic well-being percolating down to the masses, and buyers making their decisions on alternative powertrains. We have increased production capacity in brakes, alloy wheels, and castings to meet the requirements of new customer orders. As demand bounces back, we will also see higher utilization of our suspensions and transmission capacities. In the first 9 months of 2023, the EU car market has seen battery electric vehicle (BEV) penetration of 15%, as against 12% and 9% in the preceding two calendar years. Out of Euro 104 million orders booked by our European subsidiaries in the last 18 months, Euro 60 million is for this growing BEV market. This includes orders for cooling jackets, housings and covers for a German major, housings for another leading German OEM, and also for covers, housings, and spacers from a French/Italian group for PVs and CVs. OEM customers place their trust in Tier-1 companies like ours which can channel technology, operational excellence, and resources to provide them a competitive edge. We too recognize that businesses thrive when their counterparties are capable and growth-oriented, therefore, we have consciously built long-standing relationships with very strong customers and vendors.” Result PDF