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On the performance front in Q2FY25, revenue for the quarter grew by 14.4% YoY/+3.1% QoQ to Rs.29.13bn on a console basis. Standalone revenue grew +16.5% YoY/+8.4% QoQ to Rs.22.99bn. Consol EBIDTA increased by 20.0% YoY to Rs.3.82bn and Stnd EBIDTA up by 20.5% YoY to Rs.2.98bn. Margin on console basis expanded by 61bps YoY to 13.1%, however contracted by 12bps on QoQ basis. PAT for the quarter grew by 31.3% YoY to Rs.2.03bn. European revenue grew by 9.3% YoY to Rs.6.17bn despite lower tooling sales and EU new car registration de-growth of 7.8%. Margin came at 16.0% to Rs.0.99bn.

* The company is entering the critical drivetrain space for four-wheelers, leveraging its experience in two- and three-wheeler drivetrains. Production is expected to begin next year, with advanced capabilities integrating high-precision mechanical and electronic components. The new factory in AURIC Chh. Sambhajinagar is set to produce fourwheeler and non-auto aluminum castings, with production beginning in Q2 FY26. This aligns with their strategy to increase four-wheeler business share from 25% to 45% by FY30. A second alloy wheel factory in the AURIC will begin operations in September 2025. This expansion aims to double the company's current alloy wheel capacity, potentially increasing its market share from 13.3% to 25%.

* Additionally, The braking segment has doubled revenue in two years, supported by a second factory reaching peak capacity. Endurance has manufactured 700,000 singlechannel ABS units and plans to start dual-channel ABS production in Q4 FY25. The company is maximizing the capacity of its suspension plants, with expansions in Sanand, Halol, and Waluj to meet increased demand. A large suspension order from Suzuki scooters (worth INR 1,650 million annually) is set to begin production in January 2025, supported by advanced Industry 4.0 tools for automation and efficiency.

View and Valuations: Endurance Technologies presents a compelling growth opportunity with strong potential across multiple segments. The expansion in the AURIC industrial area for four-wheeler aluminum castings aligns well with rising OEM demand domestically and internationally, while the alloy wheel plant at Chakan will nearly double its capacity to support profitable growth. The company’s strategic focus on high-value braking and suspension systems, particularly in electric and premium two-wheelers, is expected to drive revenue. Operational improvements, including automation and in-house manufacturing, enhance cost competitiveness. Supported by robust order wins and a diversified customer portfolio, Endurance Technologies is well-positioned for continued expansion. We value the stock based on Sep-FY27E EPS to arrive at the TP of Rs.2,924 (30x of Sep-FY27E EPS) and recommend BUY rating on the stock.

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