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Endurance Technologies (Endu) reported consolidated revenues of ?22.3 bn, up 6.6% qoq and 7.5% yoy. EBITDA margins came in at 11.9% in domestic business while European margins jumped to 15.4% aided by good order execution, Italian government incentives and operating leverage. The EBITDA margins at the domestic level were up 80 bps yoy as the positive impact of RM cost was seen in the quarter and also due to firmness in the domestic 2W volumes. Consol PAT grew flattish yoy at ?1.364, while EBITDA margins came in at 12.8%, up 140 bps qoq and 40 bps yoy from 12.4%.

Robust order wins to boosts investor confidence

Endu has won several orders during FY23 and has also received RFQs worth ?26 bn from various OEMs in India and abroad. ?9.35 bn worth new orders were won in FY23 excluding orders from Bajaj Auto. Out of cumulative ?21 bn new business won, the company catered ?4.21bn in FY23, while order pipeline of ?6.92 bn would be addressed in FY24E and ?9.73 bn would be completed in FY25E-26E. Apart from this, the company has started work on new order worth ?1.2 bn from Hero Electric for BMS (Battery Management Services) under its EV portfolio in April 23. The other major order wins mainly consist orders from HMSI (Rear shock absorbers), HMCL (Castings and front forks), Aether Energy (Battery box housing, suspensions, aluminium castings), Hero Electric (Alloy wheels, suspensions), Okinawa (brakes), Greaves Electric Ampere (brakes), Suzuki (front forks), Tata Motors & Yamaha (suspensions), TVS (Brakes, inverted front forks), KTM (air suspension forks) & RE (castings & ABS). The total order wins by Endu in the EV space is ?3.8 bn FY23 (42% of total order book), which includes ?1.24 bn from Bajaj Auto and rest from Aether Energy, Hero Electric, Mahindra Electric, TVS, Tata Motors, Ampere, Okinawa and a new entrant Bounce.

The company will focus on developing value added products, which include brake and clutch assembly for 200cc+ motorcycles along with ABS, paper based clutches, inverted front forks and fully machined & semi-finished castings. The company supplies ABS assemblies to Bajaj Auto & Royal Enfield and has reached peak production of 400K this month, while with increasing demand, the company shall take it up to 600K units by end of this fiscal and 1.2 mn units per annum by H2 FY25. As a value added product, Endu has started manufacturing Valves for ABS from March which is considered to be a high margin business. Also the Dual channel ABS supply shall start in Q1 FY24 (>30% of current ABS production).

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