Endurance Technologies Ltd. share price target

Endurance Technologies Ltd is one of India's leading automotive component manufacturers with operations in India and Europe. It mainly caters to twoand three-wheeler OEMs in India and supplies aluminium casting products to four-wheeler OEMs in Europe. The company operates 16 plants in India, 9...

Strong Q3FY21 enabled by domestic operations , aftermarket and cost controls Endurance technology Q3FY21 consolidated revenues grew 24% YoY to `20.4bn with EBITDA at `3.5bn (+35% YoY) enabled by 32% growth in standalone operations,+20% YoY growth from Bajaj Auto, HMSI, TVS Motors, Yamaha India, Royal Enfield & Kia Motors, 28% YoY increase in aftermarket segment, better product mix, tighter cost controls and higher incentives from the state government leading to EBITDA margin expansion of 137 bps...

We recommend a BUY on Endurance Tech. with a Target Price of Rs 1510, an upside of ~10% from CMP of Rs. 1365 and Stop Loss Rs 1315.

OUR TOP POSITIVE PLAYS: Hero, Maruti, Endurance Tech, JK Cement, SBI cards, Relaxo, D-Mart, HUL, Asian Paints, ICICI bank, Cholamandalam Invest, Infosys, TCS, HCL tech, Dr. Reddy. NEGATIVE: Bajaj Finance, Cyient.

Excellent growth track record; financials in the pink of health ETL has a history of strong outperformance vis--vis base user industries in India as well as Europe (10-year India sales CAGR at ~12% vs. 2-W industry volume CAGR of ~6%; FY15-20 Europe sales CAGR at ~7%), riding on the back of (i) increasing penetration in existing clients (~80% wallet share with the likes of Bajaj Auto and Royal Enfield), (ii) new client additions (OEMs like TVS Motor, Hyundai and Kia added in recent years), (iii) quick headways into offering multiple products to new clients and (iv) higher value addition...

We recommend a BUY with a Target Price of Rs 1524 (earlier Rs. 1190).

Rich product portfolio for 2W, 3W and PV segments ......................................... 6 Story in Charts ....................................................................................................... 9 Light weighting - A structural trend to drive die-casting business ........................ 11 Breakthrough orders from Hyundai/Kia to help grow beyond 2Ws ................... 12 Die-casting segment highly fragmented with presence of key players ............. 13 Europe Focus on machining and EVs to drive growth ................................... 14 Growth enablers for European business .......................................................... 15 High entry barriers led by product complexity .................................................. 16...

We had hosted the senior management of Endurance Technologies (ENDU). Our meeting with Mr. Anurang Jain, Managing Director, ENDU; Mr. Satrajit Ray, Executive Director & Group Chief Financial Officer; and Mr. Massimo Venuti, Director & CEO, Endurance Overseas included discussions on its growth strategy in India and the EU business, risk and...

Q2FY21 Topline remained flattish YoY The Q2FY21 topline remained flattish YoY at `17,701mn. Flattish revenue was due to flattish revenue growth in the standalone business and benefits of appreciation of EUR versus Rs, offset by 7-8% decline in subsidiaries revenues in EUR terms. Revenues in India business were flat YoY in Q2FY21 led by double-digit growth with HMSI, Yamaha India, Suzuki and Tata Motors, offset by 7-12% YoY decline in revenues from Bajaj Auto and Royal Enfield and 5% YoY decline in the aftermarket segment. EBITDA was at `3,132mn (+7.6% YoY; +633% QoQ) led...