Add Endurance Tech Ltd for the Target Rs. 2,820 by Choice Institutional Equities
Strong execution across India and Europe supports growth momentum:
ENDU delivered a healthy operational performance in Q4FY26, driven by a strong traction across premium motorcycles, EV components and European operations. Consolidated total income grew 37.3% YoY, supported by a robust domestic demand, new order ramp-up and contribution from the Stöferle acquisition. Consolidated EBITDA increased 30.8% YoY, while margin remained resilient despite elevated aluminium and energy cost. Standalone profitability was affected by outsourcing costs, commodity inflation and initial expenses related to new plants. However, continued focus on localisation, operational efficiency and premium product mix is projected to benefit the company. We believe ENDU’s increasing presence in high-value products, such as ABS, inverted front forks, alloy wheels, battery packs and embedded electronics strengthen its long-term growth visibility
Europe and EV businesses remain key growth drivers:
Europe operations delivered a strong growth during FY26, supported by the Stöferle acquisition and rising hybrid and EV-linked programmes. Margin performance in Europe remained healthy owing to operating leverage and productivity initiatives. Maxwell and battery-pack businesses are scaling up meaningfully, aided by strong order inflow and customer addition. The company is also witnessing a healthy traction in nonauto applications, such as solar actuators and dampers, diversifying future revenue streams. We expect continued investments in advanced braking systems, aluminium castings and battery packs so as to position ENDU favourably to leverage premiumisation, regulatory and EV-led opportunities
View and Valuation:
We reduce our FY27E EPS estimate by 4.0% due to commodity inflation and higher initial cost related to new plants, while largely maintaining FY28E estimate. We retain our target price of INR 2,820, valuing the stock based on 27x FY28E EPS and maintain our ‘ADD’ rating, supported by EV growth, premiumisation and strong order visibility
Strong Revenue performance, EBITDA margin lower then estimate
* Revenue was up 37.9% YoY and up 13.2% QoQ to INR 40,860 Mn (vs CIE est. at INR 36,153 Mn)
* EBITDA was up 34.4% YoY and up 19.0% QoQ to INR 5,678 Mn (vs CIE est. at INR 5,091 Mn). EBITDA margin was down 36 bps YoY and up 67 bps QoQ to 13.9% (vs CIE est. at 14.1%)
* APAT was up 18.7% YoY and up 14.0% QoQ to INR 2,765 Mn (vs CIE est. at INR 2,655 Mn)
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SEBI Registration no.: INZ 000160131
