Company Update : Endurance Technologies Ltd By Motilal Oswal Financial Services Ltd
Operationally in-line; low other income & high tax lead to PAT miss
* 3QFY25 consol revenue grew ~12% YoY to INR28.6b (in-line). This was driven by a ~9% YoY growth in standalone (India) business (vs the 2W industry sales growth of 7%) and ~20% YoY growth in subsidiaries.
* The Europe business revenue grew ~22% YoY in Indian terms and ~21% in EUR terms against the new car registration growth of 1.3%. Maxwell reported a growth of 37% YoY to INR260m in 3QFY25.
* Aftermarket sales from Indian operations stood at INR3.5m vs. INR 3.3m in the corresponding period of last year.
* Gross margin expanded 300bp YoY/70bp QoQ to 42.9% (est. 42.4%). EBITDA grew ~25% YoY to INR3.7b (est. INR3.9b) while EBITDA margin expanded 130bp YoY (-10bp QoQ) to 13% (est. 13.3%).
* Standalone EBITDA expanded 90bp YoY to 12.5% (est. 13%). EBITDA margin for the EU business expanded 70bp YoY to 16.2%.
* While operating performance was in line, lower other income and higher tax led to a PAT miss at INR1.8b (+21% YoY, est. INR2.1b).
From the PR
India
* Cumulative order book stood at INR42.73b, with order wins of INR7.8b in 9MFY25. This includes INR3.6b for castings, INR3b for brakes, and INR0.8b for suspensions.
* EV order value as of 9MFY25 stood at INR3.9b, translating into 49% of the total order value in 9MFY25 (vs 8% in FY24). It has cumulative orders of INR9.6b in the India EV space, including Bajaj Auto.
Europe
* Cumulative order book in Europe stood at EUR244m, with order wins of EUR36m in 9MFY25. It has large orders in the hybrid segment from VW and BMW.
* Out of EUR244m of cumulative orders won in the last five years, EUR94m (39%) were for EV applications and EUR109m (45%) for Hybrid Applications. ICE end-use, currently at ~50% of Endurance Europe revenues, is expected to reduce to 25% in FY28.
Valuation view: The stock trades at ~24.8x/20.6x FY26E/27E consol EPS.
