ENDURANCE - Endurance Technologies Limited Share Price

In the earnings conference call for Q4 FY26, Endurance Technologies management provided an optimistic outlook despite the challenging global environment. Here are the key forward-looking points and financial highlights shared by the management:

1. Market Growth: The Indian automotive sector showed significant sales growth, with two-wheeler sales reaching 7.2 million units in Q4 FY26, a 25.4% year-on-year increase. The management expects this demand trend to persist, supported by government incentives and consumer preference for safety features.

2. Revenue Projections: In FY26, the company's standalone revenue grew 20% year-on-year to Rs.10,696 crores, while consolidated total income surged 26.1% to Rs.14,720 crores. For FY27, management expressed confidence in continuing this growth trajectory.

3. Production Capacity Expansion: A major investment includes expanding ABS capacity, with an additional 1.2 million unit per annum anticipated to commence in September 2026. Dual-channel ABS production will start in June 2026, potentially boosting ABS revenue by 100-150% year-over-year.

4. Capex Plans: The capex budget for FY27 is expected to mirror the previous year's Rs.800 crores, continuing investments in new facilities and automated technologies.

5. New Projects: The AURIC Shendra plant is anticipated to contribute significantly, with annual business potential of Rs.513 crores from various OEMs, including a large US EV OEM, marking the start of production in June 2026.

6. Sustainability and R&D: The company aims to retain momentum by enhancing its R&D capabilities and aims for continuous improvements in sustainability measures, achieving a carbon-neutral percentage of 51.67%.

7. Market Conditions: Management acknowledged the geopolitical challenges affecting input costs, particularly energy prices. Nevertheless, they are optimistic about successfully passing on cost increases to OEMs, with ongoing negotiations already underway.

Overall, management is proactive in addressing challenges while aiming for substantial growth in their core automotive segments, bolstered by strategic investments and enhanced product offerings.

Here is a summary of the major questions and answers from the Q&A section of the earnings transcript for Endurance Technologies Limited, focusing on key details and guidance.

1. Question: "Any one-time impact on the revenues in both standalone and Europe? Something like price hike which impacted the numbers?"
   Answer: I mentioned that standalone revenue was affected by commodity inflation. Raw materials increased by Rs.160 crores, impacting the RMC percentage. Last year, one-time gains totaled Rs.25 crores, including corrections in component prices. Removing the non-value add of Rs.73.7 crores from the alloy and steel, our EBITDA margin would have been 13.3%, not 12.6%.

2. Question: "Will the electricity gas cost in Europe increase further and how is the pass-through happening?"
   Answer: We are facing significant increases in fuel prices, up 50%. We've been engaging with OEMs about these conversion cost increases. In Europe, while energy costs have risen, we've managed to enhance our EBITDA due to increased volumes. We're advocating for price adjustments with our customers, and our efforts are ongoing.

3. Question: "On the ABS side, what kind of revenues are we currently generating? With dual-channel SOP starting, what should we expect next year?"
   Answer: In FY '26, we produced about 280,000 single-channel ABS units. We expect this to double now due to the dual-channel introduction. Overall, we project growth of 100%-150% compared to last year as more OEMs are leaning towards ABS adoption under regulatory pressures.

4. Question: "Can you talk us through the timelines for the four greenfield facilities, including export to US EV OEM and JLR?"
   Answer: The AURIC Bidkin facility started in October 2025, aiming for peak sales by Q4 2026. The AURIC Shendra plant SOP for the US EV OEM is set for June 2026, with JLR following in July-August 2026, projecting around Rs.200 crores this year from Shendra.

5. Question: "Considering the fluctuations in raw material costs, what is the difference in cost escalation clauses between India and Europe?"
   Answer: In India, we typically receive increases in the same quarter; however, proprietary products may have a lag. We're pushing for spot increases due to high fluctuations. In Europe, we adjust prices quarterly based on the previous quarter's averages.

6. Question: "Is there potential to enter the US market for manufacturing?"
   Answer: Our focus remains on supplying from India as clients prefer to source from countries like us due to the China plus One strategy. We believe we can grow substantially by enhancing our operations and quality locally without entering the US market.

7. Question: "Is the battery pack technology you've developed differentiating in the market?"
   Answer: Yes, our battery packs have a patented design that enhances safety and reliability during production. We have developed this technology in-house, which sets us apart in the competitive landscape as our offerings are tailored to customer needs and include significant IP.

8. Question: "What does peak sales translate to for the order book realization?"
   Answer: When I refer to peak sales, it means complete realization of orders. We're also focused on increasing our share of business across different products, enhancing growth beyond peak sales projections in the coming periods.

This summary reflects key insights from the Q&A session of the earnings call, emphasizing guidance and performance queries.