Endurance Technologies Ltd's Q2FY19 consolidated net profit rises 26% yoy to Rs125cr : Beats Estimates

The company’s consolidated revenue stood at Rs1,936cr, up 23% yoy and 4% qoq.

Nov 04, 2018 10:11 IST India Infoline Research Team

Endurance Technologies Ltd Q2FY19

Consolidated Results Q2FY19: (Rs. in cr)

Q2FY19 YoY (%)
Revenue 1,936.72 23.2
EBITDA 279.76 21.9
EBITDA Margin (%) 14.4 [15]
Net Profit (adjusted) 125.19 25.6
***EBITDA margin change is bps

Automobile ancillary company, Endurance Technologies Limited (Endurance) reported better than expected numbers for Q2FY19. Consolidated revenue was up 23% yoy (4% qoq) at Rs1,937cr, surpassing consensus estimate of Rs1,874cr. At Rs280cr, EBITDA was up 22% yoy (3% qoq) at Rs280cr. EBITDA was better than consensus estimate of Rs270cr. EBITDA margin remained steady on yoy and qoq basis at 14.4%. Growth in EBITDA was similar to PAT growth. Consolidated PAT rose 26% yoy (flat qoq) to Rs125cr, in line with consensus estimate.

Other Highlights
  • Raw material costs went up 27% yoy (6% qoq) during the quarter, in-line with inflationary commodity environment prevailing currently. Consequently, gross margin contracted 164bps yoy (115bps qoq) to 40.3%. However, the company kept operating, manufacturing and employee costs under check, thereby protecting its operating margins.
  • Tax rate during the quarter also remained steady at 34%.
  • Of the total consolidated revenues, 72% came from Indian operations and 28% from European operations. Export revenues grew 72% yoy to Rs128cr.
  • Company’s new plant at Halol commenced production from September 01, 2018

Conference call highlights
  • Capex guidance for FY19E for India business is Rs450cr. It plans to issue fresh shares worth Rs750cr to bring down promoter holding to 75% before October 2019 from current 82.5%. The money thus generated could be used for inorganic opportunities.
  • During H1FY19, Endurance received orders worth Rs740cr from Royal Enfield, Hyundai, Tata Motors and Kia for the domestic market.
  • Contribution of Bajaj Auto to overall sales increased from 36% in H1FY18 to 38% in H1FY19.
  • The strike at Royal Enfield’s plant near Chennai impacted Endurance during the quarter.
  • Total disc brake capacity will be increased by 50% in the near term to keep pace with growing demand for rear disc brakes in bikes. As per the management, this has total revenue potential of Rs150cr.

Technical View:

Endurance Technologies Ltd ended at Rs. 1,266, up by 55.75 points or 4.61% from its previous closing of Rs. 1,210.25 on the BSE.
The scrip opened at Rs. 1,232.90 and touched a high and low of Rs. 1,267 and Rs. 1,226.35 respectively. A total of 14,013 (NSE+BSE) shares were traded on the counter. The stock traded above its 50 DMA.

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