Reduce Endurance Technologies, target price Rs 1340: HDFC Securities

HDFC Securities has reduce call on Endurance Technologies with a target price of Rs 1340.0. The current market price of Endurance Technologies Ltd. is Rs 1399.45.

Endurance Technologies Ltd., incorporated in the year 1999, is a Mid Cap company (having a market cap of Rs 19638.64 Crore) operating in Auto Ancillaries sector.

Endurance Technologies Ltd. key Products/Revenue Segments include Shock Absorbers, Aluminium & Die Casting, Brake Discs, Clutch Assembly (Parts), Alloy Wheels, Others, Components & Spares, Other Operating Revenue, Job Work, Scrap, Export Incentives, Power Generation for the year ending 31-Mar-2022.


Financials
For the quarter ended 30-09-2022, the company reported a Consolidated Total Income of Rs 2369.06 Crore, up 11.83 % from last quarter Total Income of Rs 2118.51 Crore and up 24.97 % from last year same quarter Total Income of Rs 1895.75 Crore. Company reported net profit after tax of Rs 131.49 Crore in latest quarter.

Investment Rationale
On the back of a gradual decline in input costs and a reduction in energy costs in Europe, it factors in consolidated margin improvement to 14.5% by FY25E (from 12.2% in FY23E), still well below its previous peak of 16.3% achieved in FY20. At 29x FY24E earnings, Endurance appears expensive. Reiterate REDUCE with a target of INR 1,340, valued at 25x Sep2024E.

Promoter/FII Holdings
Promoters held 75.0 per cent stake in the company as of 30-Jun-2022, while FIIs owned 6.43 per cent, DIIs 16.69 per cent.