'Buy' Endurance Technologies Shares Maintains Motilal Oswal Citing Multiple Growth Drivers

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Motilal Oswal Report

Given Endurance Technologies Ltd.’s strong positioning in the two-wheeler segment, it is the best proxy to play the India two-wheeler opportunity, taking into account the underlying trends of premiumization and an uptrend in scooters.

On the back of the new customer wins (won orders worth Rs 43.29 billion since FY22, including new orders worth Rs 36.12 billion) and technology-led increase in content, we estimate Endurance Technologies to continue to outperform the underlying two-wheelers industry in India.

As highlighted in the previous section, it has set a target to increase four-wheeler contribution to 45% of consolidated revenues by FY30 from 25% currently and has made material progress in segments like die-casting, suspensions and brakes. Its focus on ramping up its four-wheeler presence is likely to be amongst its key growth drivers going ahead.

Further, the ABS regulation, as and when it becomes mandatory on all two-wheelers is likely to be another key growth driver for the company.

Its Europe performance resilience has been commendable over the years and with the acquisition of Stoferle, it has further strengthened its presence in the region.

Given Endurance Technologies's strong business franchise and robust management, the stock should continue to command premium valuation multiples in comparison to most domestic auto ancillary companies as there are only a handful of highquality, large-scale, multi-product auto component suppliers, in our view.

We estimate Endurance Tecjhnologies to deliver a CAGR of ~18%/21%/20% in consolidated revenue/Ebitda/PAT over FY25-27 on account of healthy new order wins and its focus on ramping up presence in four-wheelers in a meaningful way going forward. If ABS were to be mandated in all two-wheelers as per the draft notification issued by MoRTH, it would open up a huge growth opportunity for players like Endurance Technologies.

The stock trades at 40x/34x FY26E/FY27E consolidated EPS. We reiterate our Buy rating with a target price of Rs 3,311 (based on 36x Sep’27E consolidated earnings per share).

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