Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Endurance Technologies Ltd (BOM:540153, Financial) reported a strong financial performance with a 16.8% year-on-year growth in standalone total income and a 29.7% increase in net profits.
- The company is expanding its operations with new factories for four-wheeler aluminum castings and two-wheeler alloy wheels, which are expected to significantly contribute to future growth.
- Sales to electric vehicle two-wheelers have almost doubled, showcasing a strong CAGR growth of 236% over the last 3.5 years.
- The company's braking segment has shown robust improvement, with total income doubling in two years and plans to expand further with new ABS products.
- Endurance Technologies Ltd (BOM:540153) is making strides in sustainability, aiming to reach a carbon neutral percentage of more than 50% by FY30.
Negative Points
- The four-wheeler market in India and Europe showed weak performance, with passenger vehicle volumes dropping by 1% in India.
- The company faces challenges in fully utilizing its suspension plant capacities, although improvements are underway.
- Operating expenses increased by 20% year-on-year, impacting the potential for greater margin expansion despite revenue growth.
- The European market is experiencing a decline in vehicle registrations, although Endurance Technologies Ltd (BOM:540153) has managed to grow its market share.
- There is uncertainty regarding the timing and recognition of incentives under the new mega project scheme, which could impact financials in FY26.
Q & A Highlights
Q: Can you provide details on the revenue ramp-up for the new AURIC plant and the four-wheeler segment?
A: The AURIC plant is focused on four-wheeler and non-auto aluminum castings, with production starting in Q2 FY26. We are confident in meeting our business plan due to strong interest from OEMs. The two-wheeler alloy wheel plant will start in September 2025, doubling our current capacity. These expansions will significantly contribute to our growth. - Anurang Jain, Managing Director
Q: What is the expected contribution of aluminum and alloy wheels to overall revenue, and what is the share of imported alloy wheels in India?
A: We do not disclose specific contribution figures, but alloy wheels are a significant part of our growth strategy. The import of alloy wheels is minimal due to BIS standards, and most are sourced locally. - Anurang Jain, Managing Director
Q: Can you explain the increase in operating expenses and the outlook for standalone margins?
A: Operating expenses increased due to special processes and wage hikes. However, we are implementing efficiency improvements to enhance margins. We expect margin expansion driven by better product mix and operational efficiencies. - Raja Sastry, Group CFO
Q: How is the European business performing, and what is the outlook for the region?
A: Despite a challenging market, we grew by 6.4% in Q2 due to new project acquisitions. We are gaining market share and expect continued growth, supported by strategic investments and new customer partnerships. - Massimo Venuti, CEO Endurance Overseas
Q: What is the strategy for the drivetrain products for four-wheelers, and how do you see the risk from EVs?
A: Our drivetrain products are ICE agnostic and suitable for both ICE and EVs. We see no immediate risk from EVs, as ICE vehicles will continue to be produced in large numbers. - Rajendra Abhange, COO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
