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In-line result; both India and the EU outperform the underlying industry

* ENDU’s 2QFY25 consol. revenues grew 14% YoY to INR29.1b (in line). EBITDA rose 20% YoY to INR3.8b (in line), and adj. PAT was up 31% YoY at INR2b (in line).

* Its 1HFY25 revenue/EBITDA/adj. PAT grew 15%/18%/28% YoY.

India business:

* Revenue grew 16.5% YoY to INR23b (inline) compared with underlying 2W industry production growth of ~10% YoY. There was an incentive of INR131m booked in 2Q.

* EBITDA margin at 13% (est. 13.4%) was up 40bp YoY (+10bp QoQ).

* Adj. PAT rose 30% YoY to INR1.85b (in line).

* 1HFY25 revenue/EBITDA/adj. PAT grew 16%/20%/27% YoY.

EU business:

* The EU revenue grew 6% YoY to EUR60m (est. EUR70m). This was despite lower tooling sales and a 7.8% decline in the EU new car registration.

*  EBITDA margin at 16% (est. 15.2%) was up 120bp YoY (-60bp QoQ).

* Adj. PAT grew 39% YoY to EUR3.5m (est. EUR4m).

Maxwell business:

* Revenue grew 12% YoY to INR190m (est. INR80m) as its key customer has again started ramping up volumes from Jul’24.

* Operating loss stood at INR17m vs. INR43m loss in 2QFY24.

Others:

* Consolidated operating cash flow/FCF declined 3%/99% YoY. The sharp drop in FCF was mainly due to higher capex, which grew 49% YoY to INR4.4b.

Valuation view: The stock trades at 39x/32x FY25E/FY26E consol. EPS.

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