Endurance Technologies Limited (Endurance) reported better than expected numbers for Q4FY18. Consolidated revenue was up 29% yoy at Rs1,782cr, which was 10% better than consensus estimate of Rs1,617cr. EBITDA grew 36% yoy to Rs257cr, while EBITDA margin expanded 69bps yoy to 14.4%. EBITDA exceeded street estimate of Rs231cr by 12%, EBITDA margin was slightly better than estimated 14.3%. Raw material cost as % of sales was 212bps yoy higher at 59.5%. However, operating and manufacturing expenses and employee costs were 114bps yoy lower and 167bps yoy lower respectively as % of sales. Consolidated PAT for Q4FY18 grew 39% yoy to Rs116cr, significantly above consensus estimate of Rs99cr.
As per the management, revenue growth during the quarter was powered by strong growth in motorcycle, scooter and three wheeler sales. Sales for Endurance exceeded market growth in India and Europe. Revenue growth in Q4FY18 was helped by a moderate base of Q4FY17 (up 5% yoy).
Raw material costs as % of sales have steadily risen over the past four quarters, while operating and employee expenses have shown a steady decline (as % of sales) over the past four quarters. We believe that the steady margin improvement could be an effect on improving after-market sales, post the waning of demonetization effect.
The Board of Directors of Endurance declared dividend of Rs4/- per share.
For full year FY18, consolidated revenue, EBITDA and PAT (adjusted for EO) were up 17% yoy, 22% yoy and 26% yoy respectively. EBITDA margin expanded 63bps yoy to 14.2%. Revenue growth was led by strong growth in underlying demand in India and Europe. While raw material cost was 110bps yoy higher as % of sales, strict control on operating (86bps yoy lower as % of sales) and employee (87bps yoy lower as 5 of sales) costs helped EBITDA margin expansion.
The consolidated balance sheet showed an all-round improvement with total cash, bank balance and liquid investments doubling in value yoy to Rs548cr as on March 31, 2018. Debt equity ratio improved slightly from 0.30x to 0.26x.
Endurance Technologies Ltd is currently trading at Rs. 1,155, down by 29.45 points or 2.49% from its previous closing of Rs. 1,184.45 on the BSE.
The scrip opened at Rs. 1,152.35 and has touched a high and low of Rs. 1,197.95 and Rs. 1,140 respectively. So far 42,285 (NSE+BSE) shares were traded on the counter. The stock is currently trading above its 100 DMA.
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