Endurance Tech. Management Discussions

ECONOMIC OVERVIEW World Economic Overview

In the world economy, post robust GDP growth of 6.3% in 2021, it decelerated to 3.4% in 2022. This was mainly on account of the COVID-1 9 resurgence in China, the continued geopolitical tension, supply chain bottlenecks, and mounting inflationary pressure. On the bright side, however, growing private consumption and investment, and fiscal support from various governments provided some support to economic growth, especially in the United States (US), the Euro region, as well as major emerging markets and developing economies (EMDEs).

Inflationary pressure gradually easing out

Though global headline inflation has been coming down since mid-2022, it is well above the range witnessed in the preceding decade. Reduction in inflation in late 2022 was owing to a decline in energy and commodity prices. To control inflation, most central banks globally have resorted to hiking interest rates. Tight monetary action has also helped contain inflationary pressure despite low wage growth. However, post pandemic, a slow recovery is seen in labour markets.

Challenges continue in the Euro zone

The continued geopolitical conflict led to several economic sanctions which progressively reduced supplies of oil and gas and other raw materials from Russia. This resulted in a surge in prices due to difficulties in quickly re-defining and nurturing alternative sources of supply and apprehensions of not achieving adequate levels of storage. The run-up in commodity prices re-ignited inflationary pressures prompting central banks to raise interest rates, thus abandoning the monetary stimulus measures applied with the policy of zero or negative interest rates in some countries. These events impacted economic trends in European countries, marring the recovery path embarked upon after the post-pandemic re-openings. Despite the difficult economic scenario, the European GDP grew 3.5% in 2022 mainly due to the positive performance in the first part of the year. Growth is expected to decelerate sharply in 2023, both the advanced economies and EMDEs.

Future Outlook

In 2023, world growth is expected to be 2.8%, with growth in advanced economies likely to decelerate to 1.3% from 2.7% in 2022. Growth in EMDEs is expected to maintain pace at 3.9% in 2023 versus 4% in 2022. Led by measures taken by central banks inflation has declined and food and energy prices have begun to cool off. However, price pressures sustain with labour markets remaining tight in several economies.

(Source: World Economic Outlook April 2023, IMF)

Indian Economic Overview

During FY 2022-23, the Indian economy witnessed sustainable growth despite the headwinds of the pandemic and geopolitical conflicts. There was an improvement in the current account deficit, with good growth seen in the banking sector. Led by strong monetary action by the Reserve Bank of India (RBI), coupled with the easing of international commodity prices and prompt government action, inflation was under control.

According to the National Statistics Office, the GDP growth in FY 2022-23 is estimated at 7% versus 9.1% in FY 2021-22, with the nation conti nuing to remain one of the fastest-growing major economies in the world. This is on account of the various government interventions and initiatives, as announced in Budget 2023-24, which laid strong emphasis on economic growth. The budget adopted seven priorities, namely inclusive development, green growth, reaching the last mile, infrastructure and investment, unleashing the potential, youth power, and a focus on the financial sector.

Future Outlook

The Economic Survey 2022-23 and the RBI have projected Indian economic growth at 6.5% in FY 2023-24 despite global uncertainties. Moderation in inflationary pressures, huge allocation to capital expenditure and increased public capital expenditure are expected to boost domestic economic growth. According to Indias Chief Economic Advisor, the economy has the potential to become a USD 5 trillion economy by FY 2025-26 and USD 7 trillion by FY 2030 depending on exchange rate fluctuation.

(Source: National Statistics Office; World Bank)


Global market

In 2022, the global automotive industry grappled with challenges posed by high-interest rates, supply chain problems, and recessionary fears, among others. Going forward, moderation in automobile demand will result in supply chain blockages becoming less acute. However, the semiconductor shortage is likely to be addressed in 2024 with new semiconductor capacities coming into operation.

In 2022, according to ACEA (European Automobile Manufacturers Association), new vehicle registrations worldwide were unchanged at 66.2 million vehicles similar to that in 2021. Registrations were down 4.6% in the European Union at 9.255 million as compared to 9.7 million in 2021. Global auto production increased 7.9% with 7.1% growth in the European Union, 1 1.7% growth in the US, 1 1.7% growthin China and 21.6% growth in India. According to EIU, global new car sales are expected to rise by 0.9% in 2023, led by lower consumer spending, high commodity prices, and probable production shutdowns resulting from supply chain disruptions. Overall, following a decline in 2022, new vehicle sales will rise in 2023 to 79 million led by growth in Asia, the Middle East, Africa, and Latin America.

EV sales are expected to witness 25% growth, to ~1 1 million units, during 2023, led by strong government support across the globe. Innovative EV incentive policies have been rolled out in several countries to encourage clean vehicle sales. The EU continues to focus on producing more electric vehicles, installing more charging infrastructure, and giving a boost to circular economy for End-of-Life vehicles and batteries. European automakers are rapidly adapting to the tougher legislations and are making cutting-edge technological strides to aid the process. All these developments are expected to give a boost to EV sales in the coming months.

Source: Automotive Outlook 2023, Economist Intelligence; 23rd Annual Global Automotive Executive Survey : Auto leaders prepare to seize big opportunities : Will they choose the right road? (kpmg.com)

Indian Automobile industry

The Indian automotive industry is worth more than USD 222 billion, contributing 8% to total export, 7.1% to GDP and 49% to manufacturing GDP. As per government estimates, the Indian automobile sector is set to become the third largest in the world by 2030. India is the fourth largest producer of automobiles in the world, with an average annual production of 25+ million motor vehicles. Two-wheelers (2W) and passenger cars dominate the market, with 76% and 17.4% market share respectively.

India is a strong player in the global heavy vehicles industry and is the largest tractor manufacturer, the second largest bus manufacturer, and the third largest heavy trucks manufacturer. Low-cost production is possible due to ready availability of cheap labour and low cost of raw materials. India is set to become the manufacturing hub of automobiles further supported by a weak currency.

The geopolitical tensions and COVID-19 third wave failed to dampen the Indian automobile sector, which clocked its highest ever annual domestic PV sales in 2022. A total of 3.8 million units were sold in 2022, 23% higher than in

2021. The growth is a reflection of high consumer demand and a controlled semiconductor chip situation.

Source: Indian auto industry posts highest ever annual sales in 2022: Details explained - Times of India (indiatimes.com): Invest in Indian Automobile Industry, Auto Sector Growth Trends (investindia.aov.in)

In FY 2022-23, the overall automobile domestic sales volumes witnessed growth of 20.4%. The growth was led by healthy demand in the urban areas, increasing replacement demand, growing demand for utility vehicles in the PV segment and higher infrastructure spending. Total sales of domestic automobiles in FY 2022-23 was up 20% and stood at 21.2 million units, up from 17.6 million units in FY 2021-22. SIAM data suggests that the total production of automobiles saw robust increase of 12.6% in FY 2022-23, to 25.9 million units, from 23.0 million units produced in FY 2021-22.

In the domestic market, all categories saw high double-digit growth, with PVs, CVs and 2Ws clocking 26.7%, 34.3% and 16.9% growth respectively, despite certain persistent supply chain issues. The three-wheelers (3W) segment witnessed a remarkable 87.3% growth, albeit on a low base. Exports declined in all categories, except PVs, due to ongoing global headwinds. Overall, exports saw a sharp decline of 15.2%, to 4.8 million units from 5.6 million units in FY 2021-22.

2W segment

The domestic 2W sales grew 16.9% YoY in FY 2022-23, after witnessing de-growth in the previous three consecutive fiscals. The demand from rural India continues to remain moderate in the face of the inflationary and high interest rate environment. Owing to changes in consumer demand trends, new regulatory norms and the high cost of vehicle ownership, sales of entry-level vehicle category are expected to remain moderate in the near term. While scooter domestic sales grew 26.2%., motorcycles domestic sales grew 13.9% during FY 2022-23.

3W segment

3Ws posted 87% growth, to 488,768 units in FY 2022-23, driven by higher off-take of passenger carriers. The availability of finance, along with the availability of alternative fuels and state subsidies, have contributed to the growth of this segment. Passenger carrier volumes more than doubled to 361,094 units, while goods carrier sales increased 28% to 97,540 units during the year.

4W segment

The PV segment posted highest-ever domestic sales, growing at 26.7% to 3,890,114 units sold in FY 2022-23. Such growth was primarily driven by pent-up demand, a series of new model launches, and better product availability due to the relative easing of the semiconductor chips supply. There was high demand for higher-end variants and premium SUVs. The entry-level variant continues to be under some pressure, as customers in this category are still impacted by high-interest rates and an inflationary environment.

Passenger car sales grew 19.1%, and utility vehicles (UV) posted a strong 34.5% growth in sales during FY 2022-23.

The commercial vehicle sales grew 34.3%, the second highest domestic sales ever, with the medium and heavy commercial vehicle (MHCV) segment growing 49.2% and the light commercial vehicle (LCV) segment clocking 26.8% growth in sales. The demand in the CV space was led by increased infra spending by the Central Government, improved freight movement across the country, an impending Onboard Diagnostic Device (OBD) Stage 2A price hike, and discount offers from OEMs. The demand for heavy trucks was strong given the massive infrastructure push by the government, besides increased activity in e-commerce, construction, and mining segments.

Source: Society of Indian Automobile Manufacturers (siam.in)

EV segment

Total EV sales surpassed the 1 million mark, with 1,152,021 units sold, in FY 2022-23, according to the Society of Manufacturers of Electric Vehicles (SMEV). Amongst the total EV sales, E2W captured the largest pie at 62%. The E3W sales stood at 401,841 units, accounting for 34% of the total EV sales. E4W sales accounted for 4% of the total sales at 47,217 units, whereas the sales of electric buses stood at 1,904 units. The Faster Adoption and Manufacturing of Electric and Hybrid Vehicles (FAME) India scheme commenced on 1st April, 2019, for a period of three years, which was further extended for a period of two years up to 31st March, 2024. The revised FAME II has had a strong positive impact on adoption of E2Ws as it led to ~35% decrease in prices. This, in turn, started attracting the component supply chain that had earlier stayed away because of extremely low volumes.

Source: Fortune India: Business News, Strategy, Finance and Corporate Insight; You can save up to Rs 32,500 on electric scooters before June 1 - The Economic Times (indiatimes.com)

Government policies

To facelift the transportation system, the Indian government is continuously striving to create an integrated EV mobility ecosystem. The governments strategy and policies are intended to promote greater adoption of electric vehicles in response to the growing customer demand for cleaner transportation options.

The Indian government has an ambitious commitment to reducing the emissions to net zero by 2070. For this, transitioning towards electric vehicles is one of the key focus areas. To achieve its ambitious target of cutting its carbon emission to 30% by 2030, the government has taken multiple steps over the last few years. The government is also working to curb emissions through its Voluntary Vehicle Fleet Modernisation Programme (V-VMP), which offers tax benefits and discounts on replacing old vehicles with new ones; and Bharat Stage VI norms.

During the year, the government amended the National Policy on Biofuels - 201 8, to fast forward the target of 20% blending of ethanol in petrol and 5% blending of biodiesel in diesel to FY 2025-26 from FY 2029-30.

In the Union Budget 2023, the government announced a slew of measures to give an impetus to the automobile industry, including reduction in basic custom duty rate from 21% to 13%, increase in rebate on personal income tax from ?5 lakh per annum to ?7 lakh per annum, focus on greener mobility, and help of central government to scrap old vehicles. At the same time, with a focus on local production, the government raised the customs duty on fully imported luxury cars and EVs from 60% to 70%.

Source: Budget 2023: Key takeaways for Indian auto industry : HT Auto (hindustantimes.com)

Overall industry outlook

The industrys growth accelerated in 2022 and is predicted to continue in 2023. The anticipated easing of the semiconductor shortage will contribute to this growth. Clean technology will continue to remain the main focus area. In 2023, the pace of adoption of EVs, already witnessed in 2022, will see further acceleration, especially in the 3W and scooter segment. According to FADA, the order book in the PV segment continues to be strong for several models, and this trend is expected to continue in the early part of 2023.

The continued global economic challenges are keeping the automobile industry in cautious mode. Additionally, interest rates are expected to rise, and companies are expected to pass on cost increases due to new safety norms and guidelines and reductions in subsidies. This may lead to a sharp increase in vehicle prices, dampening PV sales to some extent. The PV industry adopted the second phase of fuel efficiency regulations in April 2022, and is gearing up to meet the stringent second phase of BS-VI emission norms from April 2023. However, the increase in price for transitioning to new norms is expected to be less steep as compared to the BS-IV to BS-VI transition. The reduction in basic customs duty on goods (other than agriculture and textiles), from 21% to 13% may help offset some impact of increase in vehicle prices.

To keep the sales momentum buzzing, OEMs may look to launch new models and introduce product upgrades. As production normalises, the waiting period for several models may also stabilise. ICRA expects auto demand to remain steady, with 6-9% volume growth likely in FY 2023-24.

Indian auto components industry

After two successive years of de-growth (1 1.7% and 3% respectively in FY 2019-20 and FY 2020-21), the Indian auto component sector clocked 23% revenue growth in FY 2021-22, and another 34.8% growth in HI of FY 2022-23. During this half year, the industry size was estimated at ?2.65 lakh crore. The full year FY 2022-23 numbers are also expected to mirror a healthy growth. The increase was driven by the replacement market, domestic OEMs, export volumes, and pass-through of commodity prices. The growing presence of global automobile OEMs in the Indian auto components industry has significantly increased the localisation of their components in the country.

HI FY 2022-23 data reveals that auto component exports and imports were fairly balanced at USD 10.1 billion. Further growth in imports is likely on account of the new norms applicable from 1st April, 2023. A lot of components, like the fabric for airbags and certain electronic components, will need to be imported to address these changes.

On the other hand, the component industry body is bullish about rising investments in the electrification space, with suppliers intensifying capex towards localisation of EV products, as well as developing the entire EV ecosystem. The governments push, in the form of automotive PLI schemes to drive Indian manufacturers towards increased

localisation of advanced automotive technologies, is not just going to deliver growth for the local EV market but is also going to boost exports of such advanced components from India. Indian exports have received a fillip in FY 2022-23, as the China plus one strategy worked in favour of the Indian auto component industry. The growth in exports is attributable to the Indian component manufacturers endeavours to localise technology in India and offer high-quality components at competitive prices.

The overall Indian auto components industry, which accounts for 2.3% of Indias GDP, could benefit from the quick transition of European and American countries to electric engines from internal combustion engines (ICEs). This could lead to a shift in demand to Indian manufacturers, offering the industry some short-to-medium-term opportunities. The domestic market continues to register robust growth, be it PV, tractor, or commercial vehicle segments, with the latter in particular witnessing good growth in the M&HCV category owing to the government push on infrastructure development.

Source: India Auto Industry Growth: Indias auto industry sets on a journey to sustain growth momentum in 2023 - The Economic Times (indiatimes.com)

COMPANY OVERVIEW About the Company

Endurance Technologies Limited (Endurance / the Company), is a leading 2W and 3W auto-component manufacturer with an expanding global footprint. Starting with 2 aluminium die-casting machines in 1985, we have grown to have 31 strategically located manufacturing facilities near our OEMs (1 9 in India and 12 overseas). Our vision is to be consistently recognised as a first choice supplier to all our customers by continuing to foster innovation and deliver excellence by focussing on QCDDM (Quality, Cost, Development, Delivery and Management). We are one of the largest manufacturers of 2W and 3W auto parts in India. Further, we are among the largest aluminium die-casting manufacturers in India serving the 2W, 3W and 4W OEMs. The Company also has presence in Europe, through its overseas subsidiaries in Italy and Germany.

The Company is a complete solution provider for its diverse range of technology-intensive products to 2W, 3W and 4W OEMs. The Companys products cater to the complete needs of the OEMs - from conception to servicing the end user, for aluminium die-casting and alloy wheels, suspension, braking systems and transmission products. The Company is positioned as a dominant Tier-1 supplier to leading Indian and global automotive brands.

At group level, the Company has a skilled team of 325 R&D personnel. Its commitment to quality and innovation is reflected in its 32 patents and 24 design registrations. It has 5 DSIR-approved R&D facilities in Maharashtra, India and two tech centres in Italy. The Company owns a state-of-the-art extensive proving ground (test track) spread over 29-acre in Aurangabad, Maharashtra.

The Company is making continuous efforts to increase the share of value-added products in its product mix, including products for EVs. The Companys established products of braking, suspension and aluminium die-casting components are EV-agnostic. The Company markets such EV components to both, the established OEMs and also the new 2W and 3W EV OEMs.

Through the efficient use of wind and solar power, the Company is striving to achieve carbon neutrality in its plants. It is creating carbon sinks by driving tree plantation, resulting in dense forests, as well as encouraging the use of natural gas and LPG in place of electricity and furnace oil. The Company has discontinued the use of furnace oil. It is also working to reduce hazardous waste generation and achieve zero waste to landfill.

Manufacturing and R&D

Endurance has 31 technologically-advanced manufacturing facilities, focussed on quality-driven processes, across India and Europe. Its 19 manufacturing facilities in India are strategically located across Maharashtra, Gujarat, Uttarakhand, Tamil Nadu and Karnataka. In Europe, 8 facilities are in Italy and 3 in Germany. It has 5 state-of-the-art R&D facilities in Maharashtra.

Historically, Endurance has taken several initiatives to offer complete solutions to its customers. The forward and backward integration projects like ABS modulators, wire braided hoses for ABS, aluminium forgings for inverted front forks, bottom-case for front-forks, and paper for clutches are examples of our initiative to bring in technology of high end products, start in-house manufacturing and substitute imports. The wire steel braided hoses are mainly used for ABS applications for mid and high-end bikes. For aluminium forging axle clamps required for inverted front forks, Endurance has entered into a technical collaboration. Supplies commenced from the Companys Waluj, Aurangabad plant to fulfil existing requirements for supply of inverted front forks within and outside India, even as third-party orders were received for stem assembly and under bracket aluminium forgings. In addition, the Company is engaged with several OEMs for supply of aluminium forgings other than for inverted front forks. Both these projects are value-accretive.

The Company promotes a culture of safety which goes beyond the workplace and beyond the workforce. In terms of implementing safety measures, the Company has achieved some significant milestones. It has consistently achieved an accident frequency rate (LTFR) of less than 1.5 and a severity rate (LTSR) of less than 200. Its rigorous Environmental Health and Safety (EHS) procedures and practices, implemented across India, resulted in fewer accidents. Employees are well aware of the EHS requirements and the importance of incorporating an EHS culture into the manufacturing process at Endurance.

New product development

Innovation is the heart of Endurance. The key element of the Companys futuristic growth strategy is innovation, with a strong emphasis on continual and intensive research and development. Endurance is continually nurturing a culture of innovation across all the R&D verticals (suspension, brakes, transmission, driveline, casting, and electronics). In product innovation, the focus of the efforts are to launch new products or variants, to enhance cost-competitiveness, and to improve performance, durability and quality of our products. Similarly, through process innovation, we build efficiencies in our production processes. Being technology-driven, we continue to invest in the high-end testing equipment and engineering software. We have set up an advanced engineering cell to consistently meet our customer expectations and to support us in our innovation journey. We have built a culture of innovation where we challenge prevailing assumptions when warranted, reconceptualise issues to find solutions, and continue to simplify. We nurture in-house innovations through employee participation and encouraging them to share novel ideas thereby adding to the intellectual property pool.

To further enhance the quality quotient of the products, the Company has introduced the corporate material testing team, and hired subject matter experts for critical components. A monitoring and mitigation system has been implemented, with enhanced in-house durability tests of production lots at defined intervals.

The Company has strong in-house engineering capabilities and state-of-the-art infrastructure for design, virtual validation, CAE - Computer Aided Engineering Analysis, development, lab testing, and vehicle testing at the proving ground. The Company remains focussed on continuous product and process optimisation.


Endurance is continually embracing new technology and innovating new products, as part of its efforts to grow its business operations within and outside India, both organically or inorganically. Technology upgradation, quality improvement, cost reduction EHS are the Companys focus areas in this journey. Endurance aims to fulfil all stakeholder expectations by following its five values of customer centricity, integrity, transparency, teamwork and innovation.

The Company is also looking to increase its anti-lock braking systems (ABS) business for 125cc plus motorcycles in collaboration with its technology partner. Supplies have already commenced to some key customers and Endurance is actively engaged with other OEMs for acquiring new ABS business.

The Company had recently commenced production of aluminium forgings, primarily for captive consumption, with technical inputs from an Italian counterpart. The Company is increasing its production capacity at its Waluj, Aurangabad plant from 280,000 parts per annum to 600,000 parts per annum with an incremental value of ?750 million. The additional capacity is expected to come on stream in FY 2023-24 and reach a peak in FY 2024-25. The additional volumes will serve internal needs for higher volumes of inverted front forks and also certain third party business.

The Company is increasing its business of the 200cc motorcycle inverted front forks and adjustable rear mono shock absorbers with the help of its collaboration partner. It is boosting its supplies for on-road motorcycles, and is looking to start with the off-road motorcycles for inverted front forks and rear shock absorbers. Endurance is also focussing on fully finished machined aluminium castings, as compared to raw casting and semi-finished casting for 2Ws, 3Ws, and 4Ws as well as for non-automotive casting.

Owing to the strong brand equity, customers recognise Endurance as a trusted and a capable partner in their value chain in terms of both technical and financial strengths. Today, Endurance is net debt free and has a net worth of over ?40 billion.

Endurance has a very positive outlook for profitable business growth, based on new large business wins in the last three years, including those for electric vehicles, both in India and Europe.

In terms of financial performance, during FY 2022-23, 76.8% of Endurances consolidated total income, including other income, came from Indian operations, 0.2% from Maxwell and the balance 23% from Europe. In FY 2022-23, the export sales of the India standalone business declined by 5.5% from Rs 2,264.80 million to ?2,139.76 million. The major impact was due to lower aftermarket exports to countries in Africa, South America as well as Indias neighbouring countries.

In India, Rs 9,350 million of new business was won from OEMs other than the largest customer. These wins include Rs 7,800 million of new business and Rs 1,550 million of replacement business. The total business win for EVs till date stood at Rs 6,004 million of which Rs 3,765 million worth new orders were bagged in FY 2022-23. The Company has received Rs 25,668 million worth of requests for quotes from OEMs.

In Europe, in FY 2022-23, the Company won €83.87 million of new business. Cumulatively, in the last 2 years, approximately €158 million of new business was won in Europe.

The aforesaid orders secured in both regions have been won despite adverse macro-economic factors. The quantum of these orders, and sizeable EV/Hybrid related business therein, are very significant for the future growth of the Company.

EV focus

The Company sees huge growth potential in the EV space. Its current EV product portfolio includes suspension front forks and rear shock absorbers, disc brakes, ABS, driveshaft, and different types of aluminium castings, including case transmissions, battery housings, motor housing.

To harness the huge EV opportunity, Endurance acquired 51 % equity stake in Maxwell Energy Systems Private Limited and the balance 49% stake will be acquired in a phased manner. Maxwell is in the business of advanced electronics, particularly in the battery management space (BMS) for automobile EVs and stationary storage. Endurance plans to

leverage Maxwells deep technical expertise and its BMS deployment experience both in India and Europe.

A significant order for BMS from a reputed player will start from July 2023. For this, the Company is setting up a new SMT line at Waluj, Aurangabad. With the current order book, order pipeline and technical strengths as well as synergies between Endurance and Maxwell, the Company is well positioned to benefit from the future growth in EV space.

The EV industry continues to offer significant growth opportunities for the automotive component industry. The Company has received significant orders for EV and hybrids in Europe, as well as from new-age OEMs in India.


Casting business

Aluminium die casting and machining

With over three decades of dominance in the aluminium die-casting and machining segment, the Company is well known for developing and manufacturing high pressure, low pressure and gravity castings. It also designs and produces tools and dies used in precision machining of cast products.

To cater to increased orders of alloy wheels, the Company expanded its existing plant at Chakan, thereby increasing supplies and volumes to 4.5 million wheels per annum from 2.8 million wheels per annum. This plant commenced operations and supplies in July 2022.

The Company is also installing capacities for structural aluminium castings like swing arms, sub frames and structural fairings for both EV and ICE models which are going in for light-weighting for reputed OEMs. This business will commence in FY 2023-24 and will peak in FY 2024-25. The Company has commenced supplies to one of the customers since Q3 FY 2022-23.

Proprietary Business Suspension

A pioneer in high performance suspension systems for 2W, 3W and quadricycles, Endurance has been a market leader in the suspension segment for over two decades. It caters to the suspension needs of OEMs in both, domestic and international markets. The Company designs and produces a wide range of front forks and rear shock absorbers with an aim to provide safe, stable and comfortable riding experience across all road surfaces. Our product development efforts aim to provide performance, durability, reliability and cost optimal solutions to our customers. Endurance is a major Indian Company in the design, development and manufacturing of inverted front forks and mono shock absorbers for high-end motorcycles.

The Company is increasing its business of 200cc plus motorcycle inverted front forks and adjustable rear mono shock absorbers with its collaboration partner. Supplies of inverted front forks and rear shock absorbers have started to a reputed player in India. Endurance has won new orders for the inverted front fork from another major customer, and also is actively engaged with other OEMs to get new business for the inverted front forks and rear mono shock absorbers.

Front fork business of Rs 1,398 million was acquired from a reputed scooter manufacturing company in FY 2022-23 and supplies will start from the Companys plant at Waluj, in FY 2024-25. For this, the Company is installing a new line with annual production capacity of one million front forks. From Q1 FY 2024-25, supply of inverted front forks, worth ?212 million, will commence to another reputed OEM. Further, we have developed a 35-dia air suspension fork with the help of our technology partner. Production will commence by Q1 of FY25, from the Companys plant at Waluj, Aurangabad.

Significant new suspension business will be serviced from our existing plants at Kolar, Karnataka and Halol, Gujarat, which will benefit from higher utilisation levels.

Braking systems

The Companys extensive experience in high performing braking systems has enabled us deliver first-time-right products. Being the first company in India to design and manufacture brake systems with split type callipers, integral callipers, and fixed type callipers, Endurance is a well-established brand. It is also the pioneer in designing and manufacturing master cylinders with both integral reservoir and remote reservoir.

The Company has focussed on the 200cc plus motorcycles brakes business and is showing robust growth. The brake assembly business is growing with the addition of business from several esteemed customers. The second plant at Waluj, Aurangabad, has already commenced operations to handle this increase in volumes. With this new plant, the disc brake assembly capacity has increased to 6.2 million numbers per annum and the brake disc capacity has increased to 8.1 million numbers per annum.

From October 2023, CBS brakes business will commence for an EV scooter maker.

A production run rate of 4,000,000 ABS assemblies per annum was reached in Q3 FY 2022-23. The Company is in the process of supplying dual channel ABS by Q2 of FY 2023-24.

The Company is adding new lines of 200,000 ABS assemblies per annum, taking the total volume to 600,000 ABS assemblies per annum. There are plans to increase the volumes to 1.2 million single and dual channel ABS assemblies per annum from the second half of FY 2024-25. Since March 2023, the Company has started in-house manufacturing of the ABS valves. This is not only a technology component but will aid in substantial cost control, thereby improving profit margins on the ABS.


The Company has strong technical understanding of the evolving market needs in transmission systems for 2Ws and 3Ws. In 2020, the Company further strengthened its transmission technology by acquiring its erstwhile collaborator Adler SpA, Italy. It constantly strives to create a wide range of technologically-advanced reliable clutches. The Companys unique product testing using simulation of the exact vehicle operating conditions increases the robustness of the product, reduces development time, and imparts high confidence to the consumer.

The 200cc plus motorcycle clutch business will commence by Q4 of FY24 aided by the acquisition of Adler in Italy.

The launch of the 3W driveshaft will also steer future growth for the Companys transmission business.

EV and Hybrid

The Company strives to increase supply of value-added products for EV 2W and 3Ws. For electric scooters and 3Ws, it has already started supplies of brake assemblies, suspensions and aluminium castings. Consequent to the acquisition of Maxwell, BMS for 2W EVs and battery pack makers is supplied to the OEMs. The Company is committed to supply EV products to all the existing as well as new 2W and 3W OEMs. The Company is also focussing on E-bicycles business, especially for suspension, BMS, and brakes for both Indian OEMs as well as exports.

In FY 2022-23, the Company won Rs 1,290 million of new business for EVs with a strong pipeline of RFQs.

The Company has received LOI from a reputed brand for the front fork and rear shock absorber business for their EVs worth Rs 230 million. The supply has commenced in Q1 FY24.

The new EV suspension business will be serviced from our existing plants at Kolar, Karnataka and Halol, Gujarat. With low production start time, we would be able to commence despatches in the first half of FY 2023-34.

The Company has won two orders worth ?700 million and Rs 495 million, from reputed OEMs, whose supplies will start in July 2023 and September 2023 respectively.

For EV scooters, the capacity for aluminium castings is being ramped up to 240,000 per annum for battery pack and motor housing aluminium castings. A total order value of Rs 1 billion per annum has been won, which will start in this financial year and will reach the peak in the next financial year. Further, the Company has started fully machined side-channel aluminium casting for an EV scooter model at the Vallam plant with a full business volume of 200,000 per annum valued at ?410 billion, which will peak in FY 2023-24.


One of the key focus areas for the Company is Aftermarket business, which has over the years been successfully catering to the growing 2W and 3W component replacement market in India and abroad. The Company recorded ?4.3 billion of Aftermarket revenues from India, and posted a 12.5% CAGR of such revenues from FY 2016-17 to FY 2022-23, by establishing a strong distribution presence in India and abroad.

While the Company will continue to focus on its in-house suspension, braking systems, and transmission products, it will also enhance its focus on traded or outsourced value-added products including tyres, which are manufactured through outsourcing, but are based on our registered tread designs and brand.

The key growth strategies for domestic Aftermarkets include a focus on increasing market share in each product segment and each State, with penetration in smaller districts. We have started a governing council for our strategic distributors to build strong relationships with them. We have also added warehouses in key strategic locations to reduce turnaround time and improve our service.

On the Channel relationship front, to move away from transactional relationships to participative management relationships, a 15-member distributor governing council meets twice a year for a discussion and implementation of profitable growth strategies in the domestic market.

Larger dealers dealing with all product categories of Endurance are better for the long-term interest of the business. Therefore, an Endurance special club of dealers called ECC, having a minimum Rs 10 million business relation with Endurance is promoted with additional benefits over regular dealers. This brings consistency and market share gains from the competition.

To expand the export business, there is a constant effort to enter new countries every year in line with domestic OEMs. Besides this, new product lines based on non-Indian vehicles are being developed to enter some high-potential countries where Indian vehicle potential is not sufficient. For our global market, we have been increasing our share in South Africa, Asia and Latin American countries. Our focus continues to increase our market share in each product segment while expanding our range of products. Plans are on the anvil to increase the distribution network in all the countries having Indian 2W/3W vehicle exports.


Endurance Overseas Sri: Endurance Overseas Sri (EOSrl), a subsidiary of the Company, is a Special Purpose Vehicle incorporated in Italy, for the purpose of making strategic overseas investments. The Company holds 95% of the share capital in EOSrl and Endurance GmbH, Germany, a wholly-owned subsidiary of the Company holds the balance of 5%. EOSrl also renders management support services to the group entities in Europe for certain critical functions that are centralised at EOSrl for strategic reasons.

During FY 2022-23, EOSrl reported total income of €25.2 million which includes dividend distributed by Italian subsidiaries of € 15 million as against €10.3 million in FY 2021-22. Profit after tax was €16.1 million in FY 2022-23 as compared to € 1.4 million in FY 2021-22.

These acquisitions will provide growth opportunities to the group, by way of having renowned brands in the European aftermarket and creating synergies with the Indian aftermarket business. These acquisitions will also provide in-depth knowledge for production technologies of friction materials, particularly for brake applications.

In February 2023, EOSrl undertook certain reorganisation activities within the Italian operations and completed the transfer of industrial premises at Lombardore and Chivasso to its step-down subsidiary, Endurance SpA. The assets were earlier leased to Endurance SpA for their manufacturing activities. The objective for the assets transfer also aims to facilitate EOSrl to concentrate on its core activity of managing equity investments.

Endurance SpA: Endurance SpA ("ESpA") is a step-down operating subsidiary of the Company in Italy and is primarily engaged in the production of high pressure aluminium die casting and machining components for engine, gearbox and transmission of 4W, and assembling of other metallic components like aluminium alloys, cast iron and steel.

During FY 2022-23, ESpA reported a 14.7% increase in total income to € 155.5 million, as compared to Rs 135.5 million in FY 2021-22. The growth is partially due to higher sales prices on account of pass-through of material price increases. The profit after tax increased by 8% to Rs 4.0 million as compared to Rs 3.7 million in the previous year. PAT margin at 2.6% was significantly lower compared to the earlier years, primarily due to rise in the price of energy, owing to the turmoil in the energy market in Europe. There was unprecedented increase in electricity prices by 250% in FY 2021-22 and 63% in FY 2022-23, while gas prices increased by 300% in FY 2021-22 and 70% in FY 2022-23. Certain corrective measures were taken by the Company to contain the negative effects of these energy price increases in the year.

The effective tax rate for ESpA was lower than the marginal rate, as it benefited from higher allowable depreciation related to technologically-advanced machines bought in previous years. Nevertheless, considering the significant carrying benefit anticipated for the next three years, no additional tax assets were recorded. A further benefit in terms of energy consumption savings is expected in FY 2023-24, as solar panels are under installation. During the year, the Company won new orders from OEMs, particularly powertrain components in BEV, Hybrid and ICE vehicles, for about €50 million of annual turnover with start of production in FY 2023-24.

Endurance GmbH: Endurance GmbH ("EGmbH"), a wholly-owned subsidiary based in Germany, carries out manufacturing operations of high-pressure die casting and machining components. It caters to large automotive OEMs in the German market. During the year, EGmbH reported 2.1% increase in total income to €50.4 million as compared to €49.3 million in the previous year. The growth is partially due to the higher sales prices on account of pass-through of material price increases. Profit after tax was € 1.4 million as against the previous years profit of € 1.1 million.

During the year, the Company won new orders from German OEMs, for about €25 million of peak expected annual turnover, with start of production in FY 2024-25 to BEV, Hybrid and ICE applications.

Endurance Engineering Sri: Endurance Engineering Sri ("EEsrl") is a step-down operating subsidiary of the Company in Italy and is primarily engaged in the production of plastic components for automotive applications.

During the year, EEsrl reported 16.5% increase in total income to €14.0 million as compared to €12.1 million in the previous year, the increase being partially on account of pass-through of material price increases. Profit after tax was €0.7 million as against the previous years profit of €0.7 million.

EEsrl continues to support the Endurance Group to offer alternative solutions to customers in producing engineering plastic components that are complementary to the production of aluminium parts offered by other companies of the Group. The Company won new orders from different customers for about €4.5 million of peak annual expected turnover, with start of production in FY 2024-25.

Endurance Castings SpA: Endurance Castings

SpA ("ECSpA"), is a step-down operating subsidiary of the Company in Italy and is primarily engaged in the manufacturing operation of high-pressure die casting and machining components.

During FY 2022-23, ECSpA reported 16.8% increase in total income to €41.5 million, from both intra-group and third party customers, as compared to €35.5 million in the previous year. As aluminium die-casting is an energy-intensive company, ECSpA suffered energy cost increases which were offset by its customers. Profit after tax increased to €2.7 million as compared to €1.4 million in the previous year. Net profit was also marginally higher on account of lower taxes, which in turn was due higher allowable depreciation related to the technologically-advanced machines bought in previous years. ECSpA won new orders in FY 2022-23 from third party customers for about €4.1 million of peak annual expected turnover, with start of production in FY 2024-25.

Endurance Adler SpA: Endurance Adler SpA ("EASpA"), is a step-down operating subsidiary of the Company in Italy and is primarily engaged in manufacturing operation of clutches and brakes systems and other metal rubber components for 2Ws.

During FY 2022-23, EASpA reported a total income of €10.8 million as compared to total income of €8.1 million for the previous year. Profit after tax stood at €0.2 million similar to that in the previous year.

Veicoli Sri: Ve icoli Sri ("Veicoli"), is a step-down operating subsidiary of the Company in Italy acquired in November 2021. It provides fleet management services through its software application platform. During FY 2022-23,

Veicoli reported a total income of €0.9 million and a profit after tax of €0.1 million (not comparable to the previous year, where the companys results were consolidated for only part of the year). Efforts are on-going to grow the business by expanding the offering and adding new customers.

Frenotecnica Sri: Frenotecnica Sri ("Frenotecnica"), is the new step-down operating subsidiary in Italy acquired in June 2022. Frenotecnica is primarily engaged in manufacturing the operation of brake pads for 2Ws in the after-market and replacement business. In January 2023, Frenotecnica changed its reporting period to 31st March from 31st December, to align uniformly with other group companies and hence the corresponding previous year financial numbers are not comparable. Post-acquisition, the Company contributed a total income of €3.1 million and a profit after tax of €0.1 million.

New Fren Sri: New Fren Sri ("New Fren"), is the new step-down operating subsidiary in Italy acquired in November 2022. New Fren is primarily engaged in the manufacturing operation of brake discs, centrifugal clutches, clutch discs, pads and brake shoes for 2Ws for sale in the after-market and replacement business. In January 2023, New Fren changed its reporting period to 31st March from 31st December, to align uniformly with the other group companies in Europe and hence the corresponding previous year financial numbers are not comparable. Post-acquisition, the Company recorded a total income for €2.2 million and a net loss of Rs 0.2 million.


The Company considers quality as a key driver of its growth strategy. Adherence to the stringent QCDDM parameters has enabled it to establish sustained market leadership, business sustainability, and long-lasting customer relationships globally. All its outsourcing business partners and vendors have to comply with QCDDM parameters, quintessential for a seamless supply chain. To ensure value creation for all stakeholders, the Company lays strong emphasis on strong production capabilities, internal process control and corporate governance.

Total Productivity Management (TPM) remains integral to ensuring proactive and preventive equipment maintenance to maximise operational efficiency and to empower operators. TPM helps in increasing uptime, reducing cycle times and eliminating defects, thereby leading to less unplanned maintenance, reduced equipment downtime, cost optimisation, space savings, higher levels of workplace safety, and defect-free manufacturing on assembly lines. It also enables improvement in material handling processes through real-time quality checks and lower human intervention on critical operations. TPM has proved to be an effective tool for productivity enhancement.


Macro-economic slowdown

Profitability of the Company gets negatively impacted in case of any unfavourable global or local event that affects the auto segment or economic growth.

Mitigation strategy: The Company has diversified its geographical presence as well as its product offerings in the auto component segment. The Company supplies its products to multiple OEMs and also to the Aftermarket. Its strong brand equity, long-standing customer relationships, excellent trade relations with vendors and superior quality control enable it to stay ahead of the industry curve.

Global turmoil

The ongoing geopolitical conflict poses a threat to energy price stability, global-level supply chains, and economic growth in many regions, which in turn may impact business growth.

Mitigation strategy: The Company has expanded its vendor base and focussed on strategic sourcing, cost optimisation and value addition. This has enabled it to effectively manage such turmoil. In case of certain key commodities, price changes are borne by the OEMs. The Company has ramped up its domestic supplier capacities to reduce dependence on China and the international supply chain. Indigenisation and value chain integration are also measures undertaken to mitigate such risks. In Europe, the Company manages energy price fluctuations by customer pass-through, government support and increasing use of sustainable energy. The latter is also true for Indian operations.

Raw material price volatility

Fluctuation in prices of key raw materials like aluminium and steel directly impacts profitability.

Mitigation strategy: The Company insulates itself from fluctuation in commodity prices, as price changes are effectively passed through to the OEM customers, in terms of the contracts entered into with them. This makes it unnecessary to undertake any commodity hedging. However, despite maintaining the same margins in absolute terms, higher metal prices lead to an arithmetical adverse impact on percentage margins, and vice versa.

Supply chain risk

Supply chain is integral to the smooth functioning of any business. This has direct bearing on business operations and profitability.

Mitigation strategy: Timely payments, business-friendly approach coupled with long-lasting vendor relationships helps the Company ensure uninterrupted supply. The policy of paying advances, as deemed fit, strengthens the bond with suppliers further. Endurance also shares close relationships with its own OEM customers, who supported it during escalation of commodity prices triggered by the external geopolitical situation. Indigenous sourcing of certain materials, meticulous material planning, and long-term fixed price contracts are other measures which help mitigate supply chain risks.

Customer concentration

Increased dependence on any customer for revenue leads to risk to profits in the event of negative performance by that clients business.

Mitigation strategy: The Company has a wide client base. Some amount of client concentration is only with strong industry leaders. It is the constant endeavour of the Company to expand its geographical footprint and client base to reduce risk from customer concentration.

Competitive risk

Given the lucrative growth prospects of the industry it operates, the Company faces competitive pressure from local and/or international players.

Mitigation strategy: Superior product quality, competitive pricing, focus on innovation, long-standing leadership position, deep-rooted client relations, and vast product portfolio give an edge to the Company over the competition. Its stronghold in the market is effective in countering the impact of competition on business.

Human capital risk

Human capital is crucial to business growth and continuity. Any disputes or high attrition may impact profitability.

Mitigation strategy: Well-structured HR policies ensure that the personal growth of employees is aligned with the business growth of the organisation. Focus on training and development, job satisfaction, motivated work culture, and timely rewards and recognition, enable the Company to keep the retention rate high. The Company fosters a safe, productive and healthy work environment.


During FY 2022-23, Consolidated Total Income including Other Income increased by 16.6% to Rs 88,495 million from Rs 75,902 million in the previous year.

Standalone Total Income including Other Income increased 18.8% to Rs 67,957 million from ?57,215 million in the previous year. Standalone EBITDA margin stood at 1 1.9%.

Total Income from European business increased 12.7% to €245.6 million. European business EBITDA margins improved to 14.5% from 14.1% in FY 2021-22 amidst high energy costs, which were partially compensated by customers and government support.

Consolidated EBITDA stood at Rs 1 0,81 7 million as compared to Rs 1 0,057 million in the previous year. Consolidated EBITDA Margin was at 12.2%. Consolidated PAT stood at ?4,796 million as compared to ?4,607 million in the previous year.

Financial Ratio Analysis

During the year under review, on a standalone basis, there were no significant changes in the key financial ratios except Interest Coverage Ratio, which varied by more than 25%, as compared to these ratios in the previous financial year. The key financial ratios also include Debtors Turnover, Inventory Turnover, Current Ratio and Operating Profit Margin.

During the year under review, Interest Coverage Ratio decreased to 133 times from 302 times in the previous year, primarily on account of increase in borrowings and increase in interest rates.


Endurance is strategically focussed on harnessing the opportunities in the automobile sector to grow through either M&A, greenfield projects or brownfield expansion. It continues to invest in new technologies that are designed to aid light-weighting and enhance cost efficiencies. Backward integration and value engineering remain critical to the Companys growth plans, which are centred around tapping with agility, into the potential created by the emerging trends in the industry. With customer satisfaction integral to its strategic approach, Endurance also remains focussed on the innovation of quality products that are safer, more affordable and deliver greater efficiencies.

Given the importance of a team in steering a Companys business plans, the Company has prioritised the development and progress of its people, along with their welfare and well-being. Strong vendor relationships are another key driver of its growth journey. The Company takes several initiatives aimed at making its operations and products more sustainable. Tight fiscal discipline is another area that the Company remains proactively focussed on nurturing, as part of its efforts to build a more agile, lean and future-fit organisation.


This document contains some statements about expected future events, financial and operating results of Endurance Technologies Limited, which are forward-looking. By nature, forward-looking statements require the Company to make assumptions and are subject to inherent risks and uncertainties. There is significant risk that the assumptions, predictions and other forward-looking statements will not prove to be accurate. Readers are cautioned not to place undue reliance on forward-looking statements as a number of factors could cause assumptions, actual future results and events to differ materially from those expressed in the forward-looking statements.