Buy Endurance Technologies target of Rs 2835 Prabhudas Lilladher

Prabhudas Lilladher's research report on Endurance Technologies

We upgrade our rating from “ACCUMULATE” to “BUY” given the healthy order book, capacity expansion and diversification benefits across categories. ENDU’s consolidated revenue for Q2FY25 grew by 14.4% YoY, in line with consensus /PLe. The growth in revenue was aided by healthy volume growth in the domestic 2W industry and decent Europe business in a tepid environment. EBITDA grew by 20% YoY while margin expanded by 61bps YoY to 13.1%. The margin performance was marginally lower than consensus/PLe due to rise in other expenses. Decent overall performance enabled it's PAT to increase by 31.3% YoY. We envisage ENDU to deliver healthy revenue growth CAGR of 17.6% which shall be driven by capacity expansion in different category of its businesses, healthy order book in ICE and EV business and diversification benefits across categories. Additionally, the company is the process of entering into drivetrain products for 4W which shall add further lever to its growth.

Outlook

Factoring this, we estimate its EBITDA/EPS to grow at a CAGR of 22.8%/28.3% over FY24-27E and assign ‘BUY’ with a TP of Rs2,835 (earlier Rs2,569), valuing it at 31x on its Sept’26 EPS.

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