Axis Securities
Endurance Tech (Buy)
Target: ₹1,190
CMP: ₹1,092.50
Endurance Technologies, is a tier 1 Auto ancillary for 2W OEMs based out of Aurangabad, Maharashtra. Starting with two aluminium casting machines in FY 1986, the company has grown to operate 16 plants in India and 9 plants in Europe.
The standalone operations of the company derive major sales from the 2W industry, while the European operation’s produce aluminium casting dedicated to the 4W industry.
The company has been growing both from increasing penetration amongst OEMs and also rationalising the share of business from OEMs.
In Q1-FY21, the company has won new orders worth ₹122 crore for 2/3W brake assembly, ₹32 crore for suspension products from TVS Motors and Yamaha and further discussion is going on for orders worth ₹54 crore for brakes and ₹27 cr for suspension products.
Rise in kit per vehicle with introduction of new products; market share gains with rise in orders from Hero Moto, TVS Motors and HMSI; favourable product mix with focus on VW; cost reduction measures along with consolidation of foundry operations in Italy are some of key triggers.