Q1 2027 Endurance Technologies Ltd Earnings Call Transcript
Key Points
- Strong revenue growth: Standalone total income grew 35.9% YoY, driven by robust domestic two-wheeler and passenger vehicle sales.
- Record order wins: Secured INR391.6 crore in new orders in Q1 FY27, including a significant INR336 crore from HMSI and a large European order from Mercedes for hybrid transmission components.
- Expansion in high-growth areas: Progressing on ABS capacity addition, battery pack plant SOP for Hero MotoCorp, and new orders for four-wheeler castings from Hyundai, Kia, and Isuzu.
- Maxwell subsidiary turns PAT positive: Achieved first-time profitability with 85% YoY revenue growth, supported by strong BMS demand and a cumulative order book of INR238 crore.
- Improving margin outlook: Management expects EBITDA margin to improve in Q2 FY27 due to raw material price softening (aluminum alloys) and pending price settlements with OEMs.
- Strong market share gains: Increased share in two-wheeler front forks (43.8%) and brake assemblies (34.5%), with brake business growing at over 30% CAGR in the last four years.
- Diversification into non-auto and EV segments: Solar damper and actuator orders (INR345 crore) and entry into four-wheeler battery packs provide new growth avenues.
- Margin pressure from commodity inflation: EBITDA margin fell to 11.2% (standalone) due to a sharp rise in raw material costs (aluminum, steel, copper, rubber) and conversion costs (fuels, gases, cutting tools).
- Geopolitical and global challenges: The West Asia conflict has led to higher energy prices, supply chain disruptions, and increased freight costs, impacting operations.
- European market headwinds: Despite revenue growth, net profit in Europe declined 31% due to higher depreciation from accelerated write-offs of ICE-related assets and intense competition from Chinese OEMs.
- Ramp-up risks in new plants: The Bidkin alloy wheel plant and battery pack plant are still ramping up and have not reached optimum sales, expected only by Q3 FY27.
- Order book decline in Europe: The European order book for FY27-29 has declined QoQ, reflecting reduced opportunities in a challenging market, though management remains optimistic.
- Raw material cost pass-through lag: Commodity increases of approximately INR318 crore were paid upfront in Q1, with settlements expected only in Q2, impacting cash flow and margins.
- High dependence on two-wheeler segment: With 70% of standalone business from motorcycles, any slowdown in this segment could significantly affect performance.
(audio in progress) Please note that this conference is being recorded.
I now hand the conference over to Mr. Nishit Jalan from Axis Capital. Thank you, and over to you, sir.
Thank you so much. Good morning, everyone. Welcome to Q1 FY27 post-results conference call of Endurance Technologies. We are pleased to host the management team of Endurance today.
We have with us Mr. Anurang Jain, Managing Director; Mr. Massimo Venuti, Director and CEO, Endurance Overseas; Mr. Rajendra Abhange, Director and COO; Mr. Raja Gopal Sastry, Group CFO; and Mr. Raj Mundra, Treasurer and Investor Relations.
I'll now hand over the call to Mr. Anurang Jain for his opening remarks, post which we will have the Q&A. Over to you, Mr. Jain.
Thank you very much. So good morning, everyone. As we close quarter one of FY27, the business scenario presents a mixed picture, with a steady domestic
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