PL First Cut - [Endurance Technologies]

PL First Cut – [Endurance Technologies | ENDU IN | *Himanshu Singh – Research Analyst, Prabhudas Lilladher Pvt Ltd*

[Endurance Technologies | ENDU IN | TP: INR 1,745 | Accumulate]

First Cut 1QFY24 results – beat on revenue, mixed on margin

Revenue grew by c16% YoY and was a beat on our estimates by 3.9% and on Bloomberg consensus estimates (BBGe) by 2.9%. EBITDA margins at 13.1% were largely in line with PLe (13%) and came lower than BBGe (13.4%) by c30bps. Gross margin was flattish QoQ and came higher than expected while employee expenses and other operating expenses were higher than expected and largely off-set GM beat. EBITDA beat flow-through led to beat on PAT.

ENDU’s standalone revenue in Q1FY24 at Rs 18.4bn has grown by 13.3% YoY growth against a backdrop of industry 2W sales growth of 1.2%

Revenue from Europe at Rs 6.2bn has grown by 22.4% YoY; and grew 12.6% in EUR terms, while EU new car registrations grew by 17.9%. Certain key customers of ENDU reported low/mid-single digit growth.

ENDU won Rs. 3bn in India (excluding Bajaj Auto) and EUR17mn in Europe taking the total order-book to cRs. 32bn in India and EUR237mn in Europe.

PL View:

Overall, a mixed set of numbers with beat on topline getting offset through miss on BBGe margins leading to in line performance at EBITDA level. We saw good ramp-up of revenues at the European subsidiary side, while weakness in demand in 2Ws have slightly weighed on the standalone business. The results call is tomorrow at 10:00AM and we will circle back with more details post that. The stock currently trades at 24.4x FY25 PE.

Financial performance vs PLe:

Revenue grew YoY by 15.9% to Rs. 25bn, and QoQ by 9.7%, and beat PLe by 3.9%

EBITDA grew YoY by 34% to Rs. 03bn, and QoQ by 12.6%, and beat PLe by 4.9%

APAT grew YoY by 58.1% to Rs. 02bn, and QoQ by 19.8%, and beat PLe by 9%

EBITDA margin expanded YoY by 177 bps to 13.1%, and QoQ by 34 bps, and expanded vs PLe by 12bps