JM Financial Initiates Coverage on Endurance Technologies with 'Buy' Rating and ₹3,435 Price Target

JM Financial has initiated coverage on auto component manufacturer Endurance Technologies Limited with a 'Buy' recommendation, setting a price target of ₹3,435 per share. This target suggests an approximate 17% upside from the current market price. The brokerage has based its target on a 32 times FY28E Price-to-Earnings (P/E) multiple, which it considers attractive given Endurance's robust growth outlook. This outlook is supported by several key factors: the increasing adoption of Anti-lock Braking Systems (ABS) in two-wheelers, the company's strategic entry into the four-wheeler segment, expansion of its product portfolio, value addition to existing products leading to margin improvement, and continued growth in its European operations. JM Financial noted that while most Indian auto component peers trade around 30x FY28E P/E, Endurance is currently valued at 27.2x based on their estimates. The company holds a leadership position in the auto component sector with an EV-ready portfolio, serving a Total Addressable Market (TAM) estimated between ₹34,100–₹40,100 crore. The report anticipates that the implementation of ABS in two-wheelers below 125cc from January 2026 could generate incremental revenue of ₹610–930 crore in FY27E/FY28E. The European business is expected to grow at an 11.3% CAGR over FY25–28E, driven by lightweighting trends and the acquisition of Stöferle. Overall, JM Financial forecasts a consolidated revenue CAGR of 14.3% and a Profit After Tax (PAT) CAGR of 22.4% between FY25–28E, with EBITDA margins expanding by 218 basis points.

Impact This initiation report from a prominent brokerage firm provides a positive outlook and valuation for Endurance Technologies. It is expected to boost investor confidence, potentially leading to increased demand for the stock and a favorable price movement. The detailed growth drivers highlighted could attract both institutional and retail investors to consider the company. Rating: 7/10

Difficult Terms: TAM: Total Addressable Market – The entire market demand for a product or service. CAGR: Compound Annual Growth Rate – The average annual growth rate of an investment over a specified period longer than one year. P/E: Price-to-Earnings Ratio – A valuation ratio of a company's stock price to its earnings per share, used to gauge the market value of a company. EBITDA: Earnings Before Interest, Taxes, Depreciation, and Amortization – A measure of a company's operating performance. PAT: Profit After Tax – The profit remaining after all expenses and taxes have been deducted. OEM: Original Equipment Manufacturer – A company that manufactures parts or components that are used in another company's end product. ABS: Anti-lock Braking System – A safety system that prevents wheels from locking up during braking, improving vehicle control. GST: Goods and Services Tax – A consumption tax placed on a wide range of goods and services. 2W: Two-Wheeler – Refers to motorcycles and scooters. 4W: Four-Wheeler – Refers to cars and other vehicles with four wheels. EV: Electric Vehicle – A vehicle powered by an electric motor.