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On the performance front in Q4FY24, revenue for the quarter grew by 20.2% YoY/+4.8% QoQ to Rs.26.85bn on a console basis. Standalone revenue grew +26%YoY/+4% QoQ to Rs.20.79bn. Consol EBIDTA increased by 36.4% YoY to Rs.3.89bn and Stnd EBIDTA up by 32% YoY to Rs.2.97bn. Margin on console basis expanded 173bps YoY to 14.5%, and 283bps on QoQ basis. YoY margin expansion was majorly driven by European operation. PAT for the quarter grew by 54% YoY to Rs.2.1bn. European revenue in EUR terms grew by 1.4% YoY to EUR68.1mn due to muted car production growth, margin came at 17.8% to EUR 12.0mn. Maxwell reported a loss of Rs.37mn due to postponement on new launches by OEM.

* In India in FY24 INR 11.99 billion of new business was won from OEMs other than Bajaj Auto which included Royal Enfield, TVS, Hero MotoCorp, Tata Motors, Honda two wheelers, Jaguar Land Rover, Mahindra and Mahindra, Punch Powertrain and Suzuki. This business win of INR 11.99 billion constitutes INR 9.2 billion of new business and INR 2.79 million of replacement business. This INR 9.2 million of business will reach its peak in the financial year '27.

* Three key segment to lead the growth : In Brakes segment, company won new business from Honda scooters and motorcycles Rs.294 million and the SOP is planned in Q3FY25, also won Royal Enfield's alloy wheel new business of Rs.961 million and SOP has also started. The Brakes company has reached a run rate of 6.2 million numbers per annum and brake discs to 8.1 million numbers per annum. In die casting won new business from Tata Motors Punch Powertrain four-wheeler aluminium casting new business of INR1,026 million, INR582 million SOP is already started for its first phase and Rs.444 million second proposed project SOP is expected in Q3FY25. As demand for high end bikes is increasing and industry is also moving towards launches in new higher segments with premium content, we expect that this pattern will carry over into the next fiscal year (FY24-26), which will support improved revenue growth for component suppliers like Endurance. In addition to that, increasing alloy wheel penetration will also support the growth of alloy wheel division.

View and Valuations: Endurance technology has a promising growth story with various positive factors such as the increasing premiumization content in the 2W (125CC+ category), winning new orders from the non-automotive segment in the casting division, recovery in European business and margin expansion (due to lower energy cost), increasing share of EV order book, and increasing alloy wheel capacity in tandem with growing demand for alloy wheels. However, recent sharp run ups in the stock provide limited upside and factor in most of the positives. We value the stock based on FY26E EPS to arrive at the TP of Rs.2,271 (25x of FY26E EPS) and recommend Reduce rating on the stock.

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