Endurance Technologies Ltd. share price target

Endurance Technologies (ENDU) reported a strong all-round beat in 4QFY21, with both businesses surprising with their performances. While business recovery in the EU continues strongly, the India business is seeing the impact of the second COVID wave. ENDU's outperformance of the underlying 2W industry would continue on the back of a content increase, the mining of recently added customers, and ABS supplies from 3QFY22. ENDU is the best proxy on the 2W industry in India. We maintain our estimates and a Buy rating, with TP of INR1,750....

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...