Endurance soars 20%; stock zooms 51% in 1 month on solid Q4 earnings

The management is positive on growth across segments and expects decent growth, going ahead, led by robust orderbook.

Endurance Technologies share price record high: Shares of Endurance Technologies hit a new record high of Rs 3,059.05 as they soared 20 per cent on the BSE in Friday's intraday trade, extending their past four days' gain on healthy business outlook. In the past one week, the stock of the auto ancillary company has surged 26 per cent. In the past one month, it has zoomed 51 per cent after it reported a solid earnings for the January to March quarter (Q4FY24).

At 09:26 AM, Endurance was trading 13 per cent higher at Rs 2,890.90, as compared to 0.26 per cent decline in the BSE Sensex.

Endurance is one of the leading automotive component manufacturers, having a diverse range of technology intensified products with operations in India and Europe (Italy and Germany). In India, the company predominantly caters to two and three wheeler OEMs and its products include aluminium castings, suspensions, transmission, braking and battery management systems. In Europe, the company supplies aluminium castings to four wheeler OEMs, and also caters to the after-market for two wheeler components.

For Q4FY24, Endurance had reported 54 per cent year-on-year (Y-o-Y) growth in its consolidated profit after tax at Rs 210.2 crore, against Rs 136.5 crore in Q4FY23. Total income grew 20.2 per cent Y-o-Y at Rs 2,711 crore. Earnings before interest, taxes, depreciation & amortization (Ebitda) margin improved 170bps to 15.3 per cent in Q4FY24 from 13.6 per cent in Q4FY23.

The management said new vehicle sales in the Indian 2W market and in the European car market have seen YOY improvement, but are still below 90 per cent of pre-pandemic levels.

The management is positive on growth across segments and expects decent growth, going ahead, led by a robust orderbook. Endurance expects to increase the share of passenger vehicles (PV) in total revenue, driven by aluminium casting and forgings business.

The company won orders worth Rs 1,200 crore in the standalone operations in FY24, while total orderbook was Rs 4,090 crore. Orders from PV OEM stood at Rs 281 crore in FY24, which included orders from Tata Motors for Punch and Hyundai.

Analysts at Elara Capital expect Endurance to continue to outperform domestic 2W volume growth, with a revenue CAGR of ~12 per cent versus 2W volume CAGR of ~9 per cent through FY24-26E, led by capacity ramp-up, rising content per vehicle (due to premiumization), improving SOB and new order wins.

The company has a healthy cumulative EV orderbook of Rs 710 crore in addition to Maxwell’s orderbook of Rs 370 crore, with strong order pipeline from all major domestic 2W/PV players and Europe. The brokerage expects robust FCF generation of Rs 1,800 crore in FY24-26E, led by balanced capex going ahead. The stock, however, is trading above the brokerage firm's target price of Rs 2,368 per share.