ENDURANCE - Endurance Technologies Limited Share Price

Management's outlook during the Q1 FY26 earnings call emphasized a robust performance despite global uncertainties, projecting continued growth backed by strategic initiatives. Here are the key forward-looking points discussed:

1. ** ABS Market Expansion**: The upcoming regulation mandating ABS for all 2W vehicles above 50 cc is expected to increase the ABS market requirement five-fold. Endurance Technologies is engaged with OEMs for their increased ABS needs, anticipating a capacity escalation from 640,000 units to 2.4 million by March 2026.

2. New Facility in Chennai: A new plant for disc brake assembly will cater to southern OEM clients like TVS and Royal Enfield, diversifying their product line.

3. AURIC Shendra Facility Updates: Initial shipments to a leading European OEM have commenced, marking a significant milestone in four months. Full-scale production is set to start in Q4 FY26.

4. SOP for Alloy Wheels: The new 2W alloy wheel plant in AURIC Bidkin will begin operations soon with an annual capacity of 3.6 million wheels, which is substantially booked.

5. Battery Pack Facility: Construction is on track, aiming for operational status in January 2026, with a prospective Rs.300 crore annual business value from a leading 2W OEM.

6. Maxwell Stake Acquisition: Endurance now fully owns Maxwell, forecasting significant growth in battery management system sales, targeting Rs.156 crores in annual orders.

7. R&D Expansion in Suspensions: A new R&D center for advanced suspension solutions is operational, targeting entry into the 4W suspension market.

8. Continuous Operational Investments: Management indicated a CAPEX of over Rs.800 crores for FY26, reflecting ongoing expansions and technological advancements.

9. Focus on European Expansion: The Stöferle acquisition is seen as a strategic move to enhance profitability and boost their presence in the European market, with a consolidated revenue growth expected to continue.

10. Sustainability Goals: They aim to enhance their renewable power share and lower carbon footprint, targeting 31% in renewable energy by Q1 FY26.

Management remains optimistic, with a consolidated total income growth of 17.3% year-over-year, and EBITDA growth maintaining stable margins. The commitment to innovation, sustainable practices, and strategic acquisitions positions the company for favorable long-term growth.

Q&A Section Summary of Endurance Technologies Limited Q1 FY26 Earnings Call

Question 1: What could be the SOP and order size for the PV Brakes business, and will we get access to other OEMs?

Answer: The drum brake assembly business is valued at around Rs.25 crores per annum, with SOP starting at the end of Q4. We aim for collaborations in advanced braking systems like ESP, and though there's potential for growth in 4W, establishing solid ties with OEMs takes time.

Question 2: Can you elaborate on the ABS opportunity size and relationships with OEMs?

Answer: We're in talks with most OEMs, projecting a minimum of 16 million 2Ws needing ABS, with our capacity currently at 640,000. Though the Ministry's regulation might delay by 3-6 months, we are adding 2 lines by March 2026. This is indeed a game-changer for us.

Question 3: What is the CAPEX guidance for FY26 and future projections?

Answer: For FY26, we expect CAPEX to exceed Rs.800 crores, with ongoing expansions across multiple facilities. CAPEX should remain high due to our growth plans in various segments. For FY27, it might also remain elevated as we pursue new opportunities.

Question 4: Can you specify the contribution of Stöferle in your current results?

Answer: Stöferle contributed approximately €22 million in revenue this quarter, enhancing our overall earnings. Our EBITDA for Europe reached €18 million, showcasing a notable growth trajectory following acquisitions.

Question 5: What are your plans concerning the ABS market share?

Answer: Currently, our market share is below 15%. However, with a projected increase in capacity for ABS, we aim to reach at least 25% market share post new regulations, which is vital for our growth strategy.

Question 6: Can you detail the timeline for R&D on the ABS products?

Answer: Our aim is to expedite the R&D process significantly. By leveraging in-house capabilities, we plan to be ready by March 2026, ensuring we meet market demands swiftly and cost-effectively.

Question 7: What is the expected peak for capacity in the ABS market?

Answer: We anticipate that the ABS market will reach about 29-30 million vehicles by FY30. Our strategy includes scaling up production to at least 6.4 million units, entirely feasible given the projected market growth.

Question 8: How is Endurance poised against competitors in terms of cost and technology for ABS?

Answer: Our integrated R&D and manufacturing capabilities allow us to offer cost-effective solutions compared to competitors. With our ongoing technological advancements, we are well-positioned to meet OEMs' needs swiftly while reducing costs.

This summary encapsulates the key topics discussed, showcasing Endurance's strategic maneuvers in the evolving automotive landscape.