Buy Endurance Technologies; target of Rs 1540: Axis Direct

Axis Direct's research report onEndurance Technologies

Endurance (ETL) had a strong Q3, as anticipated. India revenue grew 25% YoY, as it continues to outperform production growth of India 2W industry (+16% YoY). With volume recovery of Bajaj Auto (~50% of ETL India revenue; +22% YoY in Q3) and strong order wins with Hero, Honda 2W, KTM and Royal Enfield, we expect ETL’s revenue growth and profitability to remain robust.

Outlook

We expect FY18-20 earnings CAGR of 34% (among the highest in our coverage). Reiterate BUY with TP of Rs 1,540 (15x FY20 EV/EBITDA; in line with leading Auto stocks).

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