JM Financial initiates coverage on Endurance Tech with a 'Buy'; here's why

Domestic brokerage JM Financial has initiated coverage on auto component manufacturer Endurance Technologies, assigning a Buy rating on the stock, citing multiple growth levers in place.

 

At the current market price, the brokerage sees around 17 per cent upside for the stock and has set a price target of ₹3,435, based on a 32x FY28E P/E. Amidst this, Endurance’s shares were trading at ₹2,917.80, down 0.29 per cent from the previous close on the NSE at 09:33 AM on Wednesday, October 29.

 

JM Financial said the target multiple is attractive given Endurance’s robust growth outlook, supported by tailwinds such as opportunities from ABS adoption, entry into the 4W segment, new product launches, value addition in existing products leading to margin expansion, and growth in the European business.

 

 

The brokerage noted that most Indian auto component companies currently trade at an average 30x FY28E P/E, whereas Endurance is at 27.2x on its estimates.

Here are the key rationales behind the coverage

Leadership position and industry tailwinds

Endurance Technologies is a leading auto component supplier with a diversified and EV-ready portfolio, JM Financial said. The company’s domestic business serves an estimated ₹34,100–40,100 crore TAM, with a market share of around 22 per cent.

 

“With GST rationalisation, India’s 2W industry is expected to grow at a 9.7 per cent compound annual growth rate (CAGR) over FY25–28E, positioning Endurance to benefit from its premium product mix and strong OEM relationships. The proposed implementation of ABS in <125cc 2Ws from Jan 2026 could add incremental revenue of ₹610–930 crore in FY27E/FY28E. Additionally, the company’s foray into the 4W segment could create a long runway for growth,” JM Financial said in its report.

European business: Lightweighting trend and inorganic expansion to drive growth

Despite structural challenges in Europe—high energy costs, supply chain disruptions, and a slower EV transition—Endurance has outperformed the market, with 14 per cent revenue CAGR vs. 4 per cent car registration CAGR over FY22–25, the brokerage highlighted.

 

Aligned with EV and lightweighting trends, Endurance’s European revenue is projected to grow at 11.3 per cent CAGR over FY25–28E.

Revenue and PAT growth outlook

On a consolidated basis, JM Financial estimates revenue to register a 14.3 per cent CAGR over FY25–28E, with Ebitda margins expanding by 218 bps, translating into a PAT CAGR of 22.4 per cent. For the standalone business, revenue could grow at 14.7 per cent CAGR, driven by strong demand, premiumisation, ABS adoption in <125cc 2Ws, higher content per vehicle, and aftermarket growth.

 

“In Europe, revenue is estimated to grow at 11.3 per cent CAGR, supported by EV-led lightweighting, a healthy order book, and the Stöferle acquisition,” JM Financial added.