9 ENDURANCE share price target reports by brokerages below. See what is analyst's view on ENDURANCE share price forecast, rating, estimates, valuation and prediction behind the target. You may use these research report forecasts for long-term to medium term for your investment or trades in 2020.
We are lowering our consol EPS FY20/21 estimates to by 1%/8% to factor in for impact of coronavirus in EU business and our lowered estimate for 2W industry volume growth. ENDU’s near-term operating performance is expected to be influenced by the longevity of disruption in Europe and the BS6 transition in India. Both these events are transitory in nature but have created meaningful dislocation in price. Our positive view on ENDU remains intact and is driven by the company’s strong positioning in 2W OEMs as well as visibility of increase in content. Post the recent correction in the stock price, valuations are reasonable at 17.4x/15.8x FY21/FY22E consol. EPS. We also lower target multiple 22X (from 25x earlier) to factor in for risk of prolonged impact of coronavirus. Maintain Buy with TP of INR1,025 (~22x Mar’22E consol. EPS).
We have lowered our FY20/FY21E EPS estimate by 2.5%/4.5% to factor in the near-term weakness in the 2W industry. The stock trades at 23.3x/21.4x at FY21/FY22E consol. EPS. Maintain Buy with TP of IN1,261 (~25x Mar’22E consol. EPS).
Management anticipates overall business momentum to remain soft in its domestic and international business in FY20 on account of overall slowdown in Auto markets. It expects business recovery to take place in FY21. Going forward, developing new business segments (like ABS and EV components), sustaining high cash generation and further optimally utilizing its asset base is likely to be the key area for ETL. To factor in better than expected margin performance by the company, we increase our PAT estimates by 9.1%/10% for FY20E and FY21E. We retain our HOLD rating on the stock with revised price target of Rs1178 (PER of 25xFY21E earnings.
We expect the company to post muted revenue growth on account of the demand slowdown and inventory pileup in the Indian two- and three-wheeler markets and softness in the European passenger vehicle market. Hence, we roll forward to FY21E and value Endurance Technologies at 18x FY21E adj. EPS. We downgrade our rating to REDUCE on the stock with a revised target price of Rs. 802.
We expect ETL to report 10.6% sales CAGR and 7.4% PAT CAGR over FY19-21E. At CMP Rs1163, the stock is quoting at PE of 27.5xFY21 earnings. It remains the most expensive stock in the entire Indian Auto Universe. We believe, current stock valuations have not factored in a) possible softness in European business b) margin normalization in Indian and European business and c) long term negative impact of EV on its 2W aluminum casting business. Thus, 7.4% PAT over FY19-21 does not justify these valuations. Our DCF valuation also suggests that to support current valuations ETL needs to grow at 20%+ CAGR for next 10 years. We reiterate our SELL rating on the stock with a revised target price of Rs1058 (25xFY21 PER - 40% premium over sector PE).
Endurance Technologies (Endurance) is one of the biggest suppliers of components to 2- wheelers and 3-wheelers in India, having core-competence in aluminium casting, transmission and suspension products. The company is likely to benefit from new customer wins, stricter safety norms in India and increasing demand for aluminium content in passenger vehicles across India and Europe. The company is growing at a rate faster than its peers as well as its underlying industry, hence we believe that the premium valuations of 24x on FY21E earnings, at which the stock is trading currently is well deserved. We initiate coverage on the stock with a BUY rating and a target of ₹1,399.
SOURCE: Data from D'Market via Quandl. Intraday data delayed 15 minutes.
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