Endurance Technologies Set to Accelerate Growth in Automotive Sector

Positive Outlook for Endurance Technologies

Recently, we met with the management of Endurance Technologies (ENDU) to discuss the company's future prospects. Despite waiting for government clarity on mandatory ABS for all two-wheelers, the company is expected to continue outperforming the industry growth.

Key Growth Drivers

The company's growth will be driven by several factors, including:

• The new alloy wheel plant at Bidkin
• Dual-channel ABS and the new brakes facility in Chennai
• The inverted front forks business

Additionally, four-wheelers will play a crucial role in driving growth, with the company aiming to increase the segment's contribution to 45% from the current 30%.

Expansion into New Segments

Endurance Technologies has also developed expertise in adjacent segments, including solar dampers, battery pack assembly, and aluminum forgings. The company is expected to start supplying these products soon.

European Business and Financial Projections

Despite the challenging macro environment, the company's European business is expected to grow steadily, driven by the Stoferle acquisition and new order wins. We estimate a CAGR of 16%/17%/16% in consolidated revenue, EBITDA, and PAT over FY25-28.

The stock is currently trading at 33.6x/29x FY27E/FY28E consolidated EPS. We reiterate our BUY rating with a target price of INR3,050, based on 36x Sep'27E consolidated EPS.

Note: The views and investment tips expressed are those of the investment experts and not of the website or its management.