LKP Research has given Buy recommendation for Endurance Technologies with a target price of Rs. 1637 in its research report issued on May 23, 2022

LKP Research’s research report on Endurance Technologies

Endurance Technologies (Endurance) reported consolidated revenues of ₹20.8 bn, a 10% qoq growth led largely by price hikes taken in the European business. EBITDA margins grew 160 bps qoq to 12.4% led by 12.7% margins in domestic business and 11.5% margins in the European business. Both the margins surprised the street positively. The EBITDA beat was due to lower than expected RM cost to sales ratio (66.7% v/s 68% qoq in the standalone operations). In the India business, revenues dropped 3% yoy to ₹15.5 bn, however, the company continued to outperform the underlying industry as 2W production declined ~21% yoy in 4QFY22 v/s a revenue decline of 3% yoy for Endurance. Adj. PAT dipped 27% yoy to ₹1.36 bn.

Outlook

Considering Endurance’s size and strong market share in its operating segments, the stock should command a premium to its domestic peers. Maintain BUY with a target price of ₹1,637.

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