Endurance Technologies Q4 Results Review - Focus On Improving Product Mix To Drive Growth: Prabhudas Lilladher

Prabhudas Lilladher Report

Endurance Technologies Ltd. consolidated revenue for Q4 FY24 grew by 20.2% YoY, in-line with our estimate/Bloomberg estimates which was led by strong growth across all product verticals. Ebitda grew by significantly by 36.4% YoY while margin expanded by ~170 basis points YoY to 14.5% (our estimate: 12.3%; Bloomberg estimate: 12.5%), owing to better operating leverage as a result of increase in volume, improvement in product mix and a one-time gain.

Strong overall performance and rise in other income led its adjusted profit after tax to increase by 54% YoY. Additionally, it is setting up a new greenfield plant with a capacity of 900 million tonne to cater to four wheeler companies as a part of its revenue diversification.

Endurance Technologies shall witness strong growth given-

1. Positive sentiments in two-wheeler industry shall improve its overall volume,

2. ABS capacity ramp-up which shall will benefit from premiumization trend in 2W industry,

3. increasing the share of four-wheeler products and strong potential in after-market products and exports.

Factoring this, we increase our FY25E/FY26E EPS estimates by 4.5%/18.4% owing to strong commentary and healthy order book.

We upgrade our rating from ‘Hold’ to ‘Accumulate’ with a target price of Rs 2,346 (earlier Rs 1,980), valuing it at 26 times on its FY26E EPS.

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