Shares of Endurance Technologies were up 17 per cent, intra-day, to Rs 869 on the BSE on Friday, after the company withdrew expansion plan of new business for manufacturing of tyres.
On Thursday, the automotive component manufacturer's stock tanked 20 per to Rs 743, its lowest level since March 30, 2017, after the company announced the expansion plan.
“To the wishes of the important stakeholders' feedback, the management (has) reconsidered the same and (has) decided not to pursue the aforementioned project. Management has recommended to the Board to the above effect,” Endurance Technologies said in a regulatory filing on Thursday, after market hours.
While the management believed that the proposal for expansion into tyre manufacturing was appropriate strategy for the growth of the company, the investors on the call expressed their reservations and requested the management to reconsider the same, the company said.
The management, while announcing the April-June (Q1FY20) results, on Thursday, said the inventory with the Original Equipment Manufacturers (OEM) and their dealers continued to be high and could impact future volumes during this fiscal. The company further said Europe, too, was witnessing a drop in volume of new cars registered.
“After witnessing tepid growth in the festive season of last year, Q4FY19 and Q1FY20 have seen year on year (YoY) de-growth in the number of two-wheelers and three-wheelers sold in the country. This de-growth is continuing,” Anurang Jain, Managing Director of Endurance Technologies said.
Endurance Technologies has reported a 2.6 per cent YoY growth in consolidated revenue from operations at Rs 1,909 crore in April-June quarter (Q1FY20), due to Rs 70 crore of incentives recorded during the quarter, under Government of Maharashtra's Package Scheme of Incentives. The company said it had the benefit of revenue from new orders that were announced in the past few quarters. The company’s consolidated net profit during the quarter grew 32 per cent at Rs 166 crore on YoY basis.
At 12:11 pm, the stock was trading 11 per cent higher at Rs 826 on the BSE, as compared to a per cent rise in the S&P BSE Sensex. The trading volumes on the counter jumped more than three-fold with a combined around 1 million shares changing hands on the BSE and NSE so far.