Buy Endurance Technologies; target of Rs 1665: YES Securities

YES Securities is bullish on Endurance Technologies has recommended buy rating on the stock with a target price of Rs 1665 in its research report dated May 18, 2023.

Broker Research

May 20, 2023 / 10:22 IST

Buy

YES Securities' research report on Endurance Technologies

Endurance (ENDU) 4QFY23 consol results were better-than-expected as margins in Europe business at 17.8% (vs 12.6% YoY) outpaced our estimates while margins in S/A at 11.9% (+80bp QoQ, est ~12%) were in-line. Europe margins recovery was led by falling energy prices, and energy cost related compensation from government (Italian government) and customers. New order wins of Rs9.35b/EUR84m in FY23 (v/s Rs8.8b/EUR67.4m in 9MFY23) is healthy considering weak volumes in domestic 2Ws and Europe. ENDU’s EV specific orders is seeing a ramp-up which now stands at ~Rs3.8b in S/A (42% of S/A orderbook vs 12% in FY22) with cumulative order of ~Rs6b (including BJAUT and do not include Rs1.3b orders at Maxwell) till date as well as EUR41m orders in EVs in Europe.

Outlook

We raise FY24/25 consol EPS by ~1% to factor in decline in energy cost. Maintain BUY with revised TP of Rs1,665 (v/s Rs1,648 ) as we value co at 25x to Mar’25 consol EPS (unchanged). ENDU trades at 27.1x/20.9x FY24/25 EPS (v/s 32x LPA) is comforting given expected revenue/EBITDA/PAT CAGR of 13%/29%/38% over FY23-25E.

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