Axis Securities initiated coverage on Endurance Technologies with a BUY rating and a Rs 3,255 target price. Strong order visibility and EV traction are key drivers, despite near-term margin pressures.
Endurance Technologies Sees BUY Rating, Target Hike from Axis Securities
Axis Securities has initiated coverage on Endurance Technologies with a BUY rating and an increased target price of Rs 3,255, up from Rs 2,880. ## What just happened Axis Securities reviewed Endurance Technologies' Q1FY27 performance, noting that while net sales of Rs 4,315 Cr exceeded expectations, growing 30% year-on-year, EBITDA was largely in line at Rs 536 Cr. However, the EBITDA margin came in at 12.4%, below estimates, and adjusted net profit of Rs 245 Cr was also lower than anticipated. ## Why this matters The brokerage's positive stance is driven by strong order visibility, significant traction in the Electric Vehicle (EV) segment, and ongoing capacity expansions. The increased target price reflects confidence in the company's future growth prospects, particularly its strategic shift towards premiumization and electrification. ## The backstory Endurance Technologies is expanding its manufacturing capabilities. This includes adding approximately 0.9 million ABS capacity and setting up a new Chennai disc brake facility, both expected to start by September 2026. The company is also investing Rs 62 Cr to enter the four-wheeler battery pack market, with supplies anticipated by Q4FY27. ## What changes now Axis Securities anticipates margin recovery starting from the second quarter of FY27. This is expected to be driven by the pass-through of raw material cost increases to Original Equipment Manufacturers (OEMs), softening aluminium alloy prices, and operational efficiencies from new plant ramp-ups. ## Risks to watch Potential macroeconomic slowdowns in the EU and Middle East markets pose a risk. Additionally, the company remains sensitive to lower-than-expected demand growth in India's two-wheeler segment. ## Peer comparison While specific peer data was not provided in the filing, Endurance Technologies operates in the auto ancillary sector, competing with other component manufacturers catering to both domestic and international OEMs. ## Context metrics (Q1FY27) * **Net Sales:** Rs 4,315 Cr (up 30% YoY) * **EBITDA:** Rs 536 Cr (up 20.7% YoY) * **Adj. Net Profit:** Rs 245 Cr (up 8% YoY) ## What to track next Investors will be keen to monitor the progress of the new facility ramp-ups, the company's ability to secure further orders, especially in the EV and four-wheeler segments, and the actual realization of margin recovery in the upcoming quarters. Reader Takeaway: Strong order book and EV growth prospects are positives; near-term margins and macro risks are concerns.
