MOSL: ENDURANCE TECHNOLOGIES (Buy)-Op. performance in line-Revenue growth outperforms industry volumes
​Endurance Technologies: Op. performance in line; Revenue growth outperforms industry volumes
(ENDU IN, Mkt Cap USD1.7b, CMP INR796, TP INR948, 19% Upside, Buy)
- EBITDA margin hurt by lower utilization and VRS: Consol. net sales grew 3.7% YoY to INR13.6b (est. of INR12.9b). Consol. EBITDA margin contracted 30bp YoY (-60bp QoQ) to 12.8% (est. of 13.3%), impacted by weaker India margins. In FY17, net sales grew by 6.6% and PAT rose 9.9% to INR3.3b.
- India business margins disappoint: S/A revenue grew 3.7% YoY (v/s 2% decline in 2W industry volumes), driven by strong growth with HMSI and Royal Enfield. EBITDA margin shrunk 200bp YoY to 10.4% (est. of 10.8%), impacted by VRS expenses (INR30m) and negative op. leverage. EBITDA declined 13% to INR986m (est. of INR883m). Higher other income restricted PAT decline to 7% (to INR525m v/s est. of INR333m).
- Better mix in EU business drives margins: EU revenue grew 3.7% in INR terms to INR4.2b (est. of INR4.8b). However, in EUR terms, growth was 7.2% (40% more than PV industry). Margin improved 360bp YoY (+120bp QoQ) to 18.2% (est. of 17.5%) driven by a better mix. EBITDA was INR766m v/s est. of INR835m). Higher other income boosted PAT to INR310m (est. of INR330m).
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.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.