MOSL: ENDURANCE TECHNOLOGIES (Buy)-Below est.; Pressure in India; EU mixed bag
ENDURANCE TECHNOLOGIES: Below est.; Pressure in India; EU mixed bag; New order wins continue
(ENDU IN, Mkt Cap USD2.1b, CMP INR1072, TP INR1240, 16% Upside, Buy)
- net revenues declined 8.5% YoY to ~INR17.7b (v/s est. ~INR19.8b). Lower tax rates boosted adj. PAT to ~INR1.7b (v/s est. 1.8b), a growth of ~35% YoY. 1HFY20 revenue/EBITDA/PAT grew -4%/ 6%/21% YoY.
- India business: S/A revenues declined 10% YoY to ~INR12.9b (v/s est. ~INR14.6b) v/s ~17% YoY decline in 2W industry volumes. EBITDA margins expanded ~230bp YoY to 15.2% (v/s est. 15.5%), but was slightly lower than est. as the gross margin beat was more than offset by higher impact of operating deleverage. Lower tax drove PAT growth of 44% YoY to INR1.37b (v/s est. INR1.5b).
- EU business revenues declined ~5% to INR4.8b (v/s est. INR5.1b). In EUR terms, revenues were flat YoY as against industry volume growth of 2.3% as ENDU was impacted by higher decline at FCA and Daimler due to diesel decline. EBITDA margins expanded 90bp YoY (+220bp QoQ) to 19.7% (v/s est. 17.3%), driven by mix improvement. Adj. PAT grew 6% to INR325m (v/s est. INR284m).
Endurance Technologies Ltd (CN) is an India-based automotive component manufacturer company. The Company is engaged in manufacturing of aluminium die castings (including alloy wheels), suspension, transmission and braking products. The Companys products include aluminium die casting, which offers high pressure die castings, low pressure die castings, gravity die castings, and alloy wheels; suspension which offers shock absorbers, motorcycle front forks, and hydraulic & gas charged dampers, macpherson struts, gas springs for cars ; transmission which offers clutch assemblies, continuous variable transmissions (CVTs), and friction plates; and braking, which offers hydraulic disc brakes, tandem master cylinder assemblies, hydraulic drum brakes, and non-asbestos brake shoes.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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