ENDURANCE - Endurance Technologies Limited Share Price

Question: "I have a question on the Slide #12 of the presentation where the scooter segment has seen a decline of 4.4% while industry volume is 12.4%... Can you comment on this line item, why there is a decline in this particular quarter?"

Answer: "The decline primarily stems from Honda Motorcycles and Scooters, our second-largest OEM customer, experiencing a degrowth. Their performance significantly impacts us, as we saw in the previous financial year when they grew. Therefore, their struggles translate to a decline for us."

Question: "My first question is on the standalone business, the India business, where we saw a Y-o-Y basis margin compression... what would be the impact of aluminum pass-through?"

Answer: "Y-o-Y margin compression is due to a 1.36% increase in material costs, with roughly 40% from aluminum price surges. Additionally, we consumed more material for R&D projects and faced seasonal effects, impacting our turnover discounts. Employee costs for strategic hiring and expenditures on consultancy for cost management also contributed to the margin compression."

Question: "So, do we expect that next financial year we will be back to historical margin trajectory for the standalone business?"

Answer: "Yes, we are focused on improving margins as we move forward. Our strategy includes enhancing the product mix. Although current pressures have impacted margins, our investments in growth are crucial for our long-term profitability, and we are committed to restoring historical margin levels."

Question: "So, where are we in terms of the ABS expansion plans and incremental discussion with customers?"

Answer: "We are on track to reach a capacity of 640,000 ABS by Q4 this financial year. We've secured an order for a 1.2 million ABS line expected by Q1 FY 27. We anticipate new guidelines soon, which will influence utilization. Customer discussions are promising, and we're optimistic about capturing this emerging business."

Question: "What is the outlook for the European business, medium term outlook, and any impact of this Nexperia chip issue?"

Answer: "In Europe, we finished Q2 with a 7.7% increase in vehicle registrations. This growth is stable, albeit largely due to stock reductions. We're optimistic for the next quarters despite the component shortages. Our key customers have signaled no current issues, which gives us confidence moving forward."

Question: "On the solar damper side... Any color you can give in what stage the discussions are, and how big business can be for us?"

Answer: "We've made significant strides in solar dampers. We've already begun bulk supplies, and customer feedback is strong. While quantifying potential revenue is premature, this could become a major growth area for us if our customer relationships continue to strengthen."

Question: "So, what technology are we looking for in 4W suspension? Is the competitive intensity quite high?"

Answer: "Entering the 4W suspension market is challenging due to existing players. However, we have a tech partner from Korea. We aim to leverage our strong engineering capabilities, honed from our 2W business. This positions us to provide significant value and competitive advantage in this space."

Question: "Can you provide an update on the ABS expansion plans?"

Answer: "We plan to have a capacity of 640,000 ABS units operational by Q4. We've ordered an additional line for 1.2 million units for Q1 FY 27, awaiting new guidelines that will guide implementation timelines. Our customer outreach suggests strong interest from several OEMs."