Endurance Technologies Ltd Management Discussions.

Global economic overview

A strong pace of vaccination across countries has raised hopes of recovery in 2021, post an estimated 3.3% contraction in global economy in 2020. The COVID-19 pandemic affected growth across nations, even though some positive factors limited the overall impact, during 2020. China’s quick recovery, followed by better-than-expected recoveries in the second half of the year for most regions, helped mitigate some of the negative impact of the pandemic, as lockdowns eased and the world adapted to new ways of doing business. However, the subsequent second and third COVID-19 infection waves necessitated renewed restrictions in many countries. This stop-go rhythm meant that recovery was uneven and far from complete.

GDP growth in % YoY 2019 2020 2021E 2022E
World Output 2.8 (3.3) 6.0 4.4
Advanced Economies 1.6 (4.7) 5.1 3.6
United States 2.2 (3.5) 6.4 3.5
Euro Area 1.3 (6.6) 4.4 3.8
Japan 0.3 (4.8) 3.3 2.5
United Kingdom 1.4 (9.9) 5.3 5.1
Emerging Market and Developing Economies 3.6 (2.2) 6.7 5.0
China 5.8 2.3 8.4 5.6
India 4.0 (8.0) 12.5 6.9
2021 and 2022 are projections

E - Estimated

Source: World Economic Outlook April 2021, IMF

The global economy is projected to grow at 6% in 2021, on a lower 2020 base. Growth will continue to be moderate at 4.4% in 2022, backed by additional fiscal support in a few large economies, coupled with anticipated recovery in the public health situation considering that vaccination has picked up pace in recent quarters. Future economic growth will depend on the severity of the new COVID-19 strains, and the effectiveness of the vaccines. The ability of various policy actions to limit persistent economic damage, as well as the evolution of financial conditions and commodity prices will further determine the future course of growth. The adjustment capacity of the economy will also play a role in defining the situation, going forward.

COVID-19 and its impact on economies

The COVID-19 pandemic has had sweeping, though diverse, impact on economies around the world. Emerging market economies and low-income developing countries, in general, have suffered significant medium-term losses. Countries that rely on tourism or commodity exports, as well as those with limited policy space to respond, have been the most impacted.

Many of the emerging economies entered the crisis with a weak fiscal capacity, which prevented them from mounting major healthcare policy responses or supporting livelihoods. This adversely impacted employment and earnings, especially for certain groups - mainly the workers with relatively lower educational attainment, and the informally employed. In this scenario, income inequality is likely to increase significantly, with approximately 95 million additional people estimated to have fallen below the threshold of extreme poverty, globally, in 2020.

Climate change and global focus

Compounding the weak sentiment is the ongoing climate change, which poses a fundamental threat to the global economy. Without successful mitigation policies, increasing temperatures will reduce global living standards by at least 5–10% by the end of the century. Though the pandemic put a pause on global emissions at the start of 2020, leading to a reduction of about 4% for the year, the improvement is projected to be temporary, with the second half of the year showing a steady rise once again. It is estimated that global economy must produce declines at the level of the 2020 lockdown period for the next 30 years to lower emissions by 80% by 2050. Without immediate and coordinated global policy action, emissions will rise again as the pandemic passes and output rises, and climate change will continue to hamper economic growth and convergence.

International oil prices

Oil prices increased by 48% between August 2020 and May 2021, on positive vaccine news and rapid economic recovery in Asia. However, a resurgence of COVID-19 cases and difficulties in vaccine rollout at the beginning of 2021 weakened the oil demand outlook. It led the OPEC+ (including Russia and other non-OPEC oil exporters) coalition to prudently review the relaxation of the 7 million barrels a day production curbs, announced in April 2020.

Oil prices are expected to be around USD 58.5 a barrel in 2021 - almost 42% higher than the 2020 average, mostly because of a temporary tight demand-supply balance expectation. The International Energy Agency (IEA) has projected a steady decline in oil inventories, with oil demand estimated at 96.4 million barrels a day and oil supply estimated at 95.5 million barrels a day, in 2021. Upside risks to oil prices arise from large cuts in oil and gas upstream investments. Downside risks arise from a setback in global oil demand recovery, continued elevated inventories, and, in the medium term, breakdown of the OPEC+ coalition.

(Source: World Economic Outlook April 2021, IMF)

Indian economic overview

India’s economic growth fell abysmally in FY 2020-21, impacted seriously by the lockdown imposed in the initial period of the COVID-19 outbreak. However, slow tapering of the mobility and lockdown restrictions, along with pent-up demand, festive spending and Government stimulus, led to robust recovery in the second half of the fiscal. Over the last two quarters, low base, restocking, healthy monsoons, and higher discretionary spends resulted in heightened economic activity, which was led by agriculture, power and the manufacturing sectors. Cheaper interest rates further helped in spurring consumption. Lesser imports, and an accelerated pick-up of agricultural and pharmaceutical exports, also added positivity to the economic scenario.

As per the National Statistics Office, the provisional estimates of National Income for FY 2020-21 indicate real GDP contraction of 7.3% for the year, distorted on account of significant growth in subsidies. The Government initiated several investment-focussed spending programmes, like the National Infrastructure Pipeline and the Centre’s Production-Linked Incentive (PLI) scheme, along with demand-driven capex, to boost economic growth. Improving investor sentiment, recovery in manufacturing and construction, investment-centred Government spending, and a massive COVID vaccination drive enabled India to end the year on a positive note, with some uncertainty posed by the second COVID wave.

Apart from the Government spending and the private final consumption, savings-backed discretionary spends of common households also majorly contributed to the economic recovery in the latter part of the fiscal under review. The accumulated savings of the salaried class in particular, resulting from limited expenses on travel and entertainment, have been partly diverted to the purchase of vehicles and consumer durables. The pent-up demand and the availability of higher savings is, therefore, again expected to drive consumption in FY 2021-22 post the second wave.

Government thrust to boost recovery

To stimulate growth in the coming quarters, the Union Budget 2021-22 centred on increased spending on infrastructure and healthcare sectors to boost economic recovery. Allocation of Rs. 27 lakh crore was made towards the Atmanirbhar Bharat Scheme to spur domestic demand and supply. To aid agriculture sector growth, coupled with development of farmers and doubling of their incomes, disbursement of Rs. 16.05 lakh crore as farm loans was announced.

With the aim of strengthening India’s transportation system, the development of more economic corridors in Kerala, Tamil Nadu, Assam and West Bengal has been targeted, with an allocation of Rs. 3.3 lakh crore. The Budget announcement also proposed launch of a Rs. 18,000 crore scheme to support the augmentation of public bus transport services, allowing private companies to finance, acquire, operate, and maintain around 20,000 buses.

Future Outlook

According to the World Bank, India’s GDP is expected to grow 8.3% in FY 2021-22, down from its earlier projection of 10.1%, with the enormous second COVID-19 wave undermining the sharper-than-expected rebound in activity seen during the second half of FY 2020-21, especially in services. Economic activity is expected to benefit from strong policy support, including higher spending on infrastructure, rural development and health, and a stronger-than-expected recovery in services and manufacturing sectors. The second wave of COVID-19 led to slowdown in economic growth due to localised short-term mobility restrictions. The slowdown in economic activity in the second wave is expected to be followed by recovery, as had happened after the first wave. Strong rebound in private consumption, and the investment growth witnessed in the second and third quarters of FY 2020-21, are expected to support the economy. Public consumption, pent-up private demand, significant pick-up in investment, and a large government capital expenditure push are expected to play a significant role in economic recovery.

(Source: National Statistics Office; World Bank)


Global passenger vehicle market

The global auto industry ended its decade-long growth record in 2019 with 5% decline in production to 92.2 million cars, trucks and buses. The year 2020 saw unprecedented challenges, with shutdowns across a large part of the auto industry and its many suppliers around the world, for several weeks. Production declined 16% in 2020, to 77.6 million vehicles, as per the International Organisation of Manufacturers (OICA). At 12%, the sales decline was, however, not as sharp, due to demand pick-up witnessed towards the end of the year.

Global Sales - All Vehicles

Region Production growth
% YoY
Europe -21.6
NAFTA -20.5
South America -30.4
Asia-Oceania -10.2
Africa -35.3
Source: OICA

The decrease in sales of new automobiles in 2020 was attributable to decline in consumer demand, as many countries imposed lockdowns. The de-growth was contained due to incentives given to car buyers by certain governments. Automobile manufacturers depend heavily on supply of parts and components from various countries. As several governments restricted the movement of goods across countries, there was disruption in the supply chain, leading to slowdown in production. With continued parts supply issues, especially semi-conductors, growth in the first half of 2021 is estimated to be at a slower pace. Also, certain European governments have reduced the extent of incentives.

Even though the overall production and sales of new vehicles suffered due to the outbreak of the pandemic, the electric vehicles (EVs) growth story remained intact. According to EV-Volumes, the share of global EV market (passenger cars and commercial vehicles) increased from 2.5% in 2019 to 4.2% in 2020. This was on account of the continued focus of automotive companies and government bodies on reducing emission of fuels from vehicles, to prevent air pollution and global warming.

(Source: https://www.marketsandmarkets.com/Market-Reports/ automotive-engineering-service-market-151284922.html)

Indian automobile industry performance

The USD 100 billion Indian automobile industry is one of the core sectors of the Indian economy, contributing about 49% to the country’s manufacturing GDP and 7.5% to its overall GDP. The industry value chain employs over 32 million people, and the Indian automobile market is the fourth largest in the world. In the last decade, production of 2-Wheelers has nearly tripled, and that of passenger vehicles (PVs) and commercial vehicles (CVs) has doubled. The industry is also witnessing a massive qualitative jump, with increased focus on safer and more environment-friendly vehicles, driven by a mix of policy changes and changing consumer preference. As per National Automotive Mission Plan 2016-2026, the sector is expected to account for 65 million new jobs within India by 2026.

(Source: https://auto.economictimes.indiatimes.com/report2020)

The Indian automobile sector faced significant challenges during FY 2020-21, owing to the pandemic, which led to supply chain disruption, manufacturing slowdown, and decline in consumer demand. A deep structural slowdown was witnessed in sales, necessitating significant time and efforts by all stakeholders to restore growth. There was uncertainty in the value chain, owing to lockdowns, as well as issues relating to supply of semi-conductors and higher prices of raw material. Further, safety and social distancing compulsions forced consumers to avoid showroom visits, leading to adoption of digitisation and contactless vehicle buying experience. However, the industry made considerable recovery during unlock phase, with a growing preference for personal mobility.

As per SIAM data, the total production of automobiles dropped by 14% in FY 2020-21, to 22,652,108 vehicles, as compared to 26,353,293 vehicles produced in FY_2019-20. Total sales of domestic automobiles witnessed 13.6% decline, to 18,615,588 units sold in FY_2020-21, as compared to 21,545,551 units in FY 2019-20. Exports also declined 13%, to 4,128,928 units in FY 2020-21, as compared to 4,748,738 units exported during FY 2019-20.

India’s 2-Wheeler industry

The most affordable means of individual mobility, the 2-Wheelers, witnessed 13.19% YoY decline in domestic sales volumes during FY 2020-21. While scooter sales were down 19.51%, motorcycles, which are popular in rural India, saw 10.65% sales decline.

India’s 4-Wheeler industry

The passenger vehicle segment was also adversely impacted, with 2.27% decline in sales, which fell to 2,711,457 units. The biggest impact of the pandemic was felt on passenger cars and vans, which clocked 9% and 17.62% decline in sales, respectively. The utility vehicles (UVs) emerged as a saving grace, registering 12% growth in sales, to cross the one million mark for the first time. The sales growth, especially seen in the second half of the fiscal, is attributable to the launch of new models, coupled with growing need for safer personal mobility. Sales of CVs were, however, severely impacted, as most non-essential economic activities, including infrastructure development, construction and public transportation, remained suspended for a substantial part of the year.

Electric Vehicle market

EV sales in India, excluding e-rickshaws, witnessed strong growth of 53% in FY 2020-21, with a total sale of 238,000 EVs, including 144,000 2-Wheeler EVs, 88,000 3-Wheeler EVs and 5,900 4-Wheeler EVs. Electric vehicles leverage on a higher level of energy efficiency, with hybrids having lower fuel consumption. There are, however, certain limitations of EVs, in terms of low battery life and range, high price, inadequate charging infrastructure, renewable energy-based charging, and fleet electrification. These limitations notwithstanding, the Indian EV market is expected to witness significant growth in the foreseeable future, in line with the evolving global EV market trend. Government incentives and increased focus on reducing carbon emissions are expected to be key factors in propelling growth in this segment.

Government policies impacting auto industry

The automobile industry in India, after facing several challenges owing to COVID-19, started showing recovery in the second half of FY 2020-21. However, a temporary blip in production and sales of automobiles was triggered by the second COVID wave. Vehicle manufacturers and OEMs diverted production capabilities for augmenting availability of oxygen for medical use by providing oxygen generating plants, concentrators, cylinders and mobile oxygen vans, besides setting up vehicle tracking systems in oxygen carrying vehicles to reduce their turn-around-time, etc. Supply chain related production challenges re-emerged due to lockdown restrictions. The impact on demand was attributable to low consumer sentiments and inability to close deals due to lockdown restrictions.

Entering into FY 2021-22, the industry is expected to witness similar slowdown-recovery scenario as seen in the first COVID wave, with the announcements in Union Budget 2021-22 expected to catalyse restoration of consumer and market confidence. The Government announced various schemes to strengthen and give the much-needed boost to the automobile sector, with strong focus on curbing air pollution and increase in customs duties of auto components. The budgetary announcements are aimed at providing long-term impetus to the sector by strengthening the fundamental growth drivers.

Some beneficial schemes include:

Introduction of voluntary vehicle scrapping policy, for private cars older than 20 years and commercial vehicles older than 15 years. Taking 1990 as the base year, around 37 lakh commercial vehicles and 52 lakh passenger vehicles will be eligible for voluntary scrapping. This announcement was in line with the Government thrust on keeping air pollution levels under control. The need for new vehicles, to replace the vehicles that are expected to go off the road, will boost automobile sales.

Rates of select auto parts were raised by 10% to 15%, impacting the manufacturers importing these materials. The scheme is in keeping with the Atmanirbhar Bharat initiative, and aimed at promoting the local automobile components industries. The custom duty on import of steel was reduced to 7.5%, helping the struggling MSME sector to bring down its costs.

Allocation of Rs._1.18 lakh crore for the Ministry of Road Transport & Highways to build highways, stretching 8,500 km, by March 2022. This step by the Government will eventually generate demand for the commercial vehicle industry and boost construction equipment sales.

Allocation of Rs._18,000 crore to support the augmentation of public bus transport services, to enable the private sector to contribute in financing, acquisition, operation and maintenance of 20,000 buses. This will provide a significant boost to the automobile sector.

Continued focus on building rural and agricultural infrastructure, along with prioritisation of agriculture credit growth, is expected to have a long-term positive impact on rural demand for vehicles.


With travel restrictions easing in the second half of FY 2020-21, growth in some high-volume segments witnessed revival, at the back of good harvest, festive season and pent-up demand. 2-Wheelers and PVs witnessed strong recovery in demand. The Indian automobile industry is expected to witness strong growth in FY 2021-22, especially in the EV 2-Wheeler segment, with increased preference for personal mobility. By 2030, EV in India is expected to reach USD 206 billion, as per a study by CEEW Centre for Energy Finance.

As per IBEF, the Indian automotive industry (including component manufacturing) is expected to reach USD 251.4 - 282.8 billion by 2026. The sector is set to benefit from new tailwinds, such as global supply-chain rebalancing, government incentives to increase exports, and technology disruptions. Digitalisation is the new mantra for the industry, with large manufacturers already trying to provide the best car buying and selling experience, through usage of VR (Virtual Reality), IoT (Internet of Things) and AR (Augmented Reality).

Indian auto component industry

In India, the auto manufacturing industry plays a pivotal role in the country’s economic growth, contributing 7.5% to its GDP. The turnover of the automotive component industry stood at Rs._349,000 crore (USD 49.20 billion) during FY 2019-20, registering a drop of 11.70% over FY 2018-19. Auto component exports dropped 3.20% to Rs._102,000 crore (USD 14.50 billion) during the period. Aftermarket remained stable at Rs._69,381 crore (USD 9.80 billion). However, sales to OEMs in the domestic market dropped 17% to Rs._287,000 crore (USD 40.5 billion).

In terms of future projections, aftermarket spending could be fiat in the short-term, given that mobility restrictions have reduced vehicle miles travelled, collisions, as well as traffic jams, thus cutting down the wear and tear of vehicles. However, as more people postpone buying new vehicles given the pandemic, the need for repairs on existing and second-hand vehicles provides ample opportunity for the long-term growth of the auto component industry. Government initiatives, like supply side interventions and change in the definition of the MSME sector with doubling of the budget for MSMEs, are also expected to benefit the auto component industry.

The Automotive Component Manufacturers Association (ACMA) and Society of Indian Automobile Manufacturers (SIAM) are working closely to enhance deep localisation in the auto component sector, to improve price competitiveness in the global market. In addition to enhancing exports, the auto component industry is also targeting to curb import of spurious and sub-standard components that are purchased due to lower pricing. The PLI scheme announced by the Government of India, details of which are awaited, is aimed at enhancing the industry’s export competitiveness through incentives. The auto component industry finds huge scope to localise and substitute imports of high-value parts, such as engine/engine components, engine electricals, fuel systems and exhaust parts, as well as gearbox parts. The players can also target to expand capabilities through innovations to match BS-VI standards, which can help replace certain imports with components made in India. Possible collaborations with global suppliers, who are relocating manufacturing operations to India, could further reinforce these efforts and help build new capabilities.

The key growth drivers for the auto component industry include:

Advent of autonomous vehicles

OEM and government focus on electric vehicles

Use of advanced technology

Concerns of vehicle and passenger safety

Vehicle light-weighting

Also, the marked increase in private equity investment in the first half of FY 2020-21 bodes well for liquidity in the auto component sector in the future. Several global firms are looking to invest in the Indian auto component industry, with focus on companies that make parts for internal combustion engine vehicles and electric mobility. Further, with more auto parts retailers adopting e-commerce and digital channels, end-users have started shopping for replacement parts online.

Global OEMs are also increasing their sourcing from India, which they are increasingly looking at as the preferred destination for auto component designing and manufacturing. As supply chains shift, India could expand its share in the global auto components trade. Currently, the country contributes only a small percentage to the total imports of its biggest buyers – 2.2% in the US, 1% in Europe, and 0.6% in China. To grow trade, India could benefit from a targeted export expansion and import substitution programme. It can target higher exports in categories where it has a competitive edge, such as shafts, bearings and fasteners. By building capabilities for high-value products, such as gearbox parts, heating, ventilation and air-conditioning (HVAC) products, component manufacturers could broaden their global export presence.

As per ACMA, the domestic auto component industry is expected to log in double-digit growth in FY 2021-22, with strong growth prospects for all segments of the vehicle industry. However, the industry may have to grapple with near-term headwinds, like high commodity prices, shortage of semiconductors and containers, and increasing freight costs, which could impede growth.

(Source: McKinsey’s Shaping the new normal – India’s auto component industry dated September 2020; ACMA)

COMPANY OVERVIEW About the Company

Endurance Technologies Limited (Endurance / the Company) is a leading auto component manufacturer, with an expanding global footprint. It is the largest aluminium die-casting company, and the largest 2-Wheeler and 3-Wheeler auto component manufacturer in India. Catering to the complete range of customer needs, the Company has emerged as an end-to-end supplier, from design to manufacturing, and culminating in aftersales service, for aluminium die-casting and alloy wheels, suspension, braking systems and transmission products, along with aftermarket service.

In business since 1985, the Company stands tall today as leader in the aluminium die casting segment in India, in terms of total output and capacity.

The Company is a Tier-I supplier to leading Indian and global brands in 2-Wheeler, 3-Wheeler and 4-Wheeler vehicles. It also has extensive presence in Europe through overseas subsidiaries in Italy and Germany. The primary focus of the Company is to create shareholder value through robust business growth, operational excellence and high corporate governance, supported by innovation and sustainable operations.

Manufacturing and R&D Strengths

The Company has 27 state-of-the-art manufacturing facilities, of which nine are in Germany and Italy, with an export footprint spread across 29 countries. In India, the Company has 18 manufacturing facilities, strategically located across Maharashtra, Gujarat, Uttarakhand, Tamil Nadu and Karnataka. During the year under review, the consolidation of foundry activities from two plants in Italy into one plant was completed, enabling annual savings of €600,000.

The new plant at Vallam near Chennai, which started operations from February 2021 for production and supply of aluminium castings to certain OEMs, has added to the Company’s manufacturing capacities. The Company is working on acquiring new business from more OEMs for this plant, which will also carry out integration of disc brake components with control brake modulators.

Capacity addition and infrastructure expansion is a continuing process at Endurance, which is moving into production of two new products – steel braided hose and aluminium forgings, as part of its backward integration initiative. Steel braided hoses are required for ABS brakes, and aluminium forgings for inverted front forks. The import substitution of these products, which were being outsourced, will enable better quality adherence and increase profit margins. Production of these import substitutes is expected to start by the end of the first quarter of FY 2021-22.

A new plant at Waluj is being set up for increasing the disc brake assembly capacity from the existing 285,000 a month to 570,000 a month, and the disc capacity from 375,000 a month to 675,000 a month. The Company is also setting up an aluminium cylinder head low pressure die casting plant at Pantnagar, Uttarakhand, for 720,000 pieces per annum, and the same is expected to become operational in Q2 FY 2021-22. To meet the growing demand, the Company is increasing capacity of alloy wheels from 240,000 per month to 320,000 per month, in its existing Chakan plant in Pune, with production of the additional capacity expected to commence in Q3 FY 2021-22.

The Company closely monitors, and ensures process controls and inspection of its manufacturing facilities to ensure sustainability. It remains committed to increasing automation, with partial automation in highly labour-intensive areas like die-casting, besides consolidation of plants, as well as restructuring of staff and workers to ensure cost optimisation.

The Company also has four modern and advanced R&D facilities, approved by the Department of Scientific & Industrial Research (DSIR), located in Aurangabad and Pune, to steer its strong innovation focus. With the acquisition of Adler SpA in Italy, the Company has added a transmission technical engineering centre to its existing castings technical centre in Europe.

The Company’s 29-acre test track, Endurance Proving Ground (EPG), is a testimony to the Company’s commitment towards achieving and maintaining industry and market leadership. Endurance is the first Tier 1 supplier in India to develop a state-of-the-art proving ground to test products directly on the vehicle. EPG consists of different test surfaces, required for evaluation of suspension, transmission and brake assemblies of 2-Wheeler, 3-Wheeler and quadricycles, including high speed performance track, ride evaluation track, ABS evaluation track, ride & handling track, gradient track, steering pad, mud & water trough, dust tunnel & country track. It is designed for evaluation of key vehicle metrics, such as handling and manoeuvrability, ride comfort, driveability, brake/ABS performance, and reliability. The versatility of EPG is reflected in its ABS test surfaces, equipped for testing the brake system under wet and dry conditions, on different friction surfaces, such as basalt tile, ceramic tiles, high (0.9) asphalt, polished concrete and loose gravel. EPG is managed from a central control tower at the operations centre, which includes fully-equipped confidential workshops required for preparing the vehicles for testing, riders’ rest areas and the test track maintenance building. EPG has certified test riders, trained by global experts in vehicle riding and evaluation of suspension, transmission & braking products. EPG has been certified by ARAI for testing 2-Wheelers and 3-Wheelers.

New product development

The Company has a strong edge in offering ‘first time right’ auto components for new vehicles, as well as for the aftermarket segment. With robust state-of-the-art manufacturing capabilities, R&D centres and testing facilities, Endurance is emerging as the partner of choice for auto OEMs, with its technological edge and proven track record. Frequent changes in vehicle technology and regulatory specifications have enabled the Company to demonstrate its ability to innovatively cater to the ever changing needs of its partner OEMs. Its ability to develop technologically driven futuristic products is led by low cost automation and Computer Aided Engineering (CAE), rapid prototyping, accelerated durability evaluation in labs, and structured & effective failure analysis.

The Company has specialised Cross Focus Teams (CFT) working on Value Analysis / Value Engineering (VAVE), to ensure customer satisfaction. Application of alternative materials, alternate processes, yield improvement, standardisation, part count reduction and light-weighting are the key thrust areas of the value engineering efforts at Endurance. VAVE enables the Company to design, develop and offer technologically advanced, superior quality and cost effective products.

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. Backed by long-standing relationships with key vendors, effective use of its capabilities, and strong customer engagement, the Company ensures continuous product and processes optimisation.

Business overview

Led by the new order and a healthy revival of demand post the first lockdown, the Company clocked its highest ever sales in the third quarter of FY 2020-21.

Driven by robust sales, return on investments and enhanced profits, the consolidated EBITDA and profit after tax margins also held close to last year’s levels despite the pandemic. Aftermarket sales from Indian operations registered growth in both domestic and export markets.

During FY 2020-21, 73% of consolidated total income, including other income, came from Indian operations, and the balance 27% came from European operations. In India, Rs._6,380 million of new business was won from new OEM partners. The Company received Rs._15,000 million worth of requests for quotes (RFQs) from OEMs, from which sizeable business wins are expected.

In Europe, the Company acquired €19.3 million of new business with esteemed OEMs. During the last two years, €110 million of business has been won for electric and hybrids, production for which started in FY 2020-21 and is expected to reach peak volume in FY 2023-24. This represents half of the Company’s existing total Europe business value.

During FY 2020-21, the overseas company, Endurance Overseas Srl, acquired 99% stake of a 2-Wheeler clutch company, Adler SpA, which in turn acquired 100% stake of the 2-Wheeler brake company Grimeca Srl. These acquisitions give Endurance access to fresh know-how, brand and trademarks, enabling it to enter the 200cc plus motorcycle clutch assembly and brake assembly markets.

As an additional source of profitable revenue growth, the Company has forayed into trading of 2-Wheeler and 3-Wheeler tyres for both, exports and domestic markets. In India, the Company has 97 distributors for tyres, complementing its 377-strong distributor network for other after-market products.

The Company constantly endeavours to grow through organic and inorganic means, with focus on technology upgradation, quality improvement, cost competitiveness, as well as environment, health and safety. A strong balance sheet and liquidity position enable the Company to move forward on its growth journey without any compromises. They enable the Company to stay ahead of competition, and invest in future growth irrespective of the industry scenario. Amidst the COVID-19 disruptions, the Company managed smooth business operations, strengthened business relationships and vendor supply chain, and outpaced industry growth. The Company focussed on control over costs, working capital and capex, in order to further strengthen its balance sheet.

CRISIL, a leading credit rating agency in India, upgraded the long-term rating of the Company to AA+ with stable outlook - among the highest in the Indian auto component industry. This is an endorsement of the Company’s ability to continue on its industry-leading growth trajectory, with improved financial strength and risk profile. For short-term bank financing, the Company has the highest rating of A1+.

In October 2020, the Company announced a voluntary separation scheme for all its eligible permanent employees/ workmen employed on the rolls at its oldest die-casting plant at Aurangabad. The Company accepted separation of 86 permanent workmen, with a one-time payout of Rs._112 million. This led to annual wage cost saving of Rs._48.7 million, with additional savings in other associated costs, resulting in greater efficiency in the plant operations. Recently, the Company announced another such scheme at one of its casting plants in Chakan, to lower headcount and sustainably improve operations.

Product Segment Performance

Casting Business

Aluminium die casting

With over three decades of experience in tooling, development, and manufacturing of high pressure, low pressure, and gravity die-casting products for Indian and overseas OEMs, Endurance is the market leader in aluminium die-casting and machining. The Aluminium die casting segment constitutes almost 35% of the Company’s standalone revenues.

During the year, the Company’s main focus in this segment was on increased value addition. It began supplying fully finished machined castings to its key OEM customers. The Company is also working to increase its market presence in the non-auto and tractor segments, and secured an order for supplying to tractors during the year.

The Company is also setting up low pressure die casting capacity for 2-Wheeler cylinder heads at its Pantnagar plant and is expected to be completed by Q3 FY 2021-22.

The Company has embarked upon a project to increase its alloy wheel manufacturing capacity during the year, to cater to new business wins. It also bagged significant orders from large OEMs for passenger cars / 4-Wheeler fully machined casting business. With its new plant at Vallam for production of machined castings, the Company will be able to serve more orders from this facility.

In Europe, the Company won €110 million worth of new business for fully finished machined castings, of which €80 million was for hybrid cars.

The Company focussed on eliminating fettling operations for magneto covers and cylinder barrels as part of process improvement. For the first time, it also developed dies for structural parts.

Endurance improved profitability in raw and machined castings during the year, through increased productivity, enhanced operational efficiency, and better product mix. Focus on value additions, like fully finished castings and higher degree of automation, are expected to further boost profitability. With all the new business wins, especially in the 4-Wheeler segment, future prospects for the casting segment look robust.

The Company has an in-house state-of-the-art tool room facility at Chakan, for designing and developing dies in a highly technologically enabled environment, enabling it to continuously strengthen its position in die casting.

Proprietary Business


The Company is a pioneer and market leader in high performance suspension systems for 2-Wheeler, 3-Wheeler and quadricycles. With over two decades of experience, Endurance designs and produces a wide range of front forks and shock absorbers, to provide safe, stable and comfortable riding experience across all road surfaces. This helps passengers to be relatively isolated from road noise, bumps and vibrations. Endurance is credited with being the only company in India to design, develop and manufacture adjustable and non-adjustable damping force inverted front forks and mono shock absorbers. It supplies suspension products in both, domestic and international markets.

During the year, the segment witnessed robust sales, led by new customer additions and growth in volumes for orders won in the recent past: Scooter suspension business from a leading Japanese 2-Wheeler OEM, which peaked in January 2020, but fell again during the pandemic, but is expected to again rise to Rs._3,500 million in FY 2021-22.

Rs._3,500 million worth of suspension business from another large 2-Wheeler OEM, expected to reach 4,700 vehicles per day in FY 2021-22.

Suspension business started with a South India based OEM.

The Company focussed on Inverted Front Forks (IFF) and adjustable rear mono shocks /emulsion shocks for high-end models of motorcycles. With the help of an esteemed European collaboration partner, it is also developing front forks and shock absorbers for electric 2-Wheelers.

The Company launched a backward integration project for aluminium forging axle clamps, which are required for the growing business of inverted front forks.

The inverted front forks business is seeing good traction, and is expected to accelerate significantly, with new order wins expected from several domestic 2-Wheeler companies. With support from a European technology provider, the Company aims to increase supply of the on-road, and also start with the off-road, motorcycles, including inverted front forks and rear mono shockers for higher cc vehicles.

Braking Systems

Endurance is a leading player in high performance braking solutions for 2-Wheelers and 3-Wheelers. With over 17 years of experience, the Company has developed capabilities to deliver reliable and ‘first time right’ products. Its braking solutions are designed for lesser stopping distance and better stability during deceleration, thereby ensuring rider safety. Endurance is the first company in India to design and manufacture brake systems with split type calipers, integral callipers, and fixed type callipers. It is also the pioneer in designing and manufacturing master cylinders with both integral reservoir and remote reservoir. During the year, the Company established a plant in Pantnagar for CBS manufacturing, and an assembly unit in Vallam plant for integration of disc brake components with control brake modulators.

The acquisition of Grimeca Srl in Italy helped in winning significant business for 200cc plus motorcycles during the year. Backed by strong IP support and brand equity of Grimeca, it aided the Company in making significant inroads in the 2-Wheeler market.

Segment growth during the year was led by new and replacement business from existing customers for braking systems, CBS braking systems, as well as from new customers. The regulatory norm mandating CBS in up to 125cc and ABS for larger bikes also led to market growth for the Company’s disc brake systems. The Company is expanding its capacity in braking segment to realise its vision of establishing itself as the market leader.

The Company is focussing on ABS, and has already bagged its first order from an OEM for one model. Robust quality, strong technology, and competitive pricing in a limited competition market are the elements powering growth in this business segment. The backward integration of steel braided hoses, required for the ABS, is expected to further steer profitability and growth in this segment.

The Company is planning to launch ABS for 150cc plus motorcycles, in collaboration with its US-based technology partner. The ABS with electronic and hydraulic Control Units is expected to be launched and produced in October 2021. The move is aimed at tapping into the huge existing market opportunity in this space, with limited competition.


Endurance is a well-established player in transmission systems for 2-Wheelers and 3-Wheelers, with over two decades of experience. It holds close to 14% market share in transmission. Driven by its in-depth understanding of Indian driving habits, the Company is continuously innovating to design, develop and manufacture a wide range of reliable clutches and Continuous Variable Transmissions (CVTs). Its robust capabilities help in ensuring Rs.first time right’ and breakthrough products, through value addition and value engineering. The products are tested by simulating the exact vehicle operating conditions, which enables the Company to deliver reliability and excellent performance, with reduced development time.

The Company enhanced its capacity for production of paper-based friction clutch plates, and started supplies for new models. As part of its value addition focus, it has embarked upon the development of new generation clutch assemblies for high-end motorcycles of 200cc plus, with the acquisition of an Italian company, Adler SpA, in April 2020. The Company is also working on replacing cork-based clutch assemblies with paper-based clutch assemblies for certain motorcycle models. In the scooter category, CVT or automatic clutch development progressed well for major OEMs.

Endurance Adler SpA (erstwhile Adler SpA) is an advanced service and manufacturing company, with focus on conceiving, designing, prototyping, sampling, testing and manufacturing clutch assemblies for motorcycles and automotive sector.

EV and hybrid

The growth prospects for EVs, in both domestic and European markets, are huge. The Company has already bagged orders for brake assemblies, suspension and aluminium castings for EVs in the domestic market, and for castings in Europe. It has also won orders for supply of EV components, such as adapters, deckels, housings, oil modules, etc., to several leading OEMs in Europe. Further wins are expected to materialise in the coming year.

During FY 2021-22, the Company will start supplies of brake assemblies, suspension and aluminium castings, including battery housing castings, for electric scooters and 3-Wheelers. The Company collaborates for EV-related product development with existing OEM customers and new EV companies that have the financial strength, technology, efficient supply chain and robust distribution network.


The Company caters to the replacement market for components of 2-Wheelers and 3-Wheelers through its aftermarket business. With over 19 years of experience, the Company has significantly increased its presence in domestic and international markets, with 377 distributors in India and 42 dedicated distributors across 29 countries. Additional 97 distributors have been appointed for the newly set up tyre distribution network.

The easing of lockdown during the early part of FY 2020-21 saw a spurt in 2-Wheeler sales, with more and more people opting for personal mobility instead of public transport, in view of the sporadic restrictions and safety concerns. With usage and purchase of motorcycles going up, the demand for spare parts also increased. However, while the 2-Wheeler aftermarket picked up pace, the 3-Wheeler market suffered, as public transport usage decreased substantially. Similar trends were witnessed in the export markets, with substantial growth in 2-Wheelers, especially in countries like Sri Lanka where 2-Wheeler volumes almost doubled. Currently, the Company exports to 29 countries, of which 3 were added in FY 2020-21. The Company is in the process of adding 5 more countries for aftermarket exports in FY 2021-22.

The Company’s in-house products include Suspension, Braking Systems and Transmission, while some other products are outsourced. An extremely stringent process for selection of contract manufacturing vendors is in place, with the Company ensuring strict adherence by the vendors to its SQA. During the year, the Company added a few new products, like tyres for 2-Wheelers, 3-Wheelers, e-rickshaws, wheel rims and 2-Wheeler brake shoes. During the year, Endurance undertook digitisation to spread brand awareness, and also initiated several programmes to train, raise awareness, and resolve any concerns of its distributors.

Overseas Subsidiaries

From early March 2020, the operating subsidiaries in Europe adopted all the precautionary measures advised by the national and international health authorities, to protect the health of their employees and make their workplaces as safe as possible. The companies introduced behavioural and organisational protocols, and careful monitoring thereof. Measures included ensuring social distancing, prohibition of gatherings, ensuring personal cleanliness, defining regulation for use of common areas, entry controls, defining areas and routes reserved for visitors, prohibition on travel and physical meetings, and increased use of virtual platforms for conducting meetings.

Adherence to these measures, and the orderly approach of the workforce, enabled the companies to resume operations after the initial lockdown was eased by the authorities.

Endurance Overseas Srl, Italy (EoSrl): 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 Amann GmbH, Germany ("Amann"), a wholly-owned subsidiary of the Company holds the balance 5% share capital.

EoSrl is also entrusted with rendering management support services to the Endurance Group entities in Europe for certain critical functions that are centralised at EoSrl for strategic reasons.

During FY 2020-21, EoSrl reported a reduction of 19.9% in total income, to € 8.8 million as compared to € 11.0 million in FY 2019-20. Profit after tax saw an increase of 156.3%, to € 9.5 million as against € 3.7 million in the previous year. The reduction in sales is due to the lower services billed to the subsidiaries, and also the reduced activity as a result of lockdown constraints and the other effects of COVID-19 pandemic. Net profit increase is mainly attributable to the income tax benefits and higher dividends received from subsidiaries.

Endurance Group recently added components for clutches and braking systems for the motorcycle segment in Europe. With superior technical skills, available within the Group, in development and design of innovative solutions, a centre of excellence for the design of components for motorcycles is being created in Italy. The technological expertise in this niche product segments will complement the overall offering by the parent company to its OEM customers, and help make inroads in other geographical regions and different product applications in the future.

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

During the year under review, ESpA witnessed 19.7% decline in total income to €139.7 million as compared from €173.9 million in FY 2019-20. The de-growth is an outcome of the unprecedented COVID-19 pandemic impact, resulting in slowdown of economic activities, including on the automotive market, and the effects of the lockdown measures imposed in various countries, further restricting people mobility. Profit after tax declined 27.2%, to €9.2 million as compared to €12.6 million in the previous year. The operations during the year yielded a net profit, despite the significant market contraction and the difficult operating conditions due to the complexities induced by COVID-19, such as irregular production schedules from customers. A positive contribution to the company’s profitability was driven by prudent risk management measures, cost controls and also lower tax burden.

During the year, ESpA undertook consolidation of its foundry activities, whereby the plant operations, including workmen and necessary plant & machinery, from its plant in Grugliasco were shifted to the Chivasso plant. This step was taken to improve the operating & cost efficiencies, and achieve economies of scale.

Endurance Amann GmbH ("Amann"), a wholly-owned subsidiary based in Germany, manufactures high pressure die casting and machining components. It caters to large automotive OEMs in the German market.

During the year under review, Amann witnessed 11.5% decline in total income to €43.2 million from €48.8 million in the previous year. The decrease is mainly due to reduced sales caused by unprecedented effects of the COVID-19 pandemic.

Profit after tax was €2 million as compared to €1.6 million in the previous year. The higher net result, despite the lower sales, was driven by cost containment and the lower depreciation charge. Reduction in depreciation charge was due to extended useful life as certain machines were able to produce a wider array of products.

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

During the year under review, EEsrl witnessed 32.8% decline in total income to €9.8 million from €14.6 million in the previous year. Profit after tax stood at €0.6 million, as compared to €1.3 million in the previous year.

EEsrl continues to support the Group in offering solutions to its customers in producing engineering plastic components that are replacing some of the aluminium products. It aids the Group in aligning itself to the plans of OEMs to shift to alternate lighter material components.

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

During the period ended 31st March 2021, ECSpA witnessed 16.4% decline in total income to €28.1 million, from both captive and non-captive customers, as compared to €33.7 million in the previous year. Profit after tax declined 25.5%, to €1.4 million as compared to €1.8 million in the previous year. The reduction in sales and profit are a result of the effects of COVID-19 pandemic that also impacted the Company’s operating performance due to lockdown constraints triggered by the coronavirus outbreak and consequent issues of workforce availability.

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

During the period ended 31st March 2021, EASpA reported a total income of €7.4 million, and a loss after tax of €1.2 million.

Supply chain - sourcing & challenges

Endurance believes business growth and sustainability to be dependent on its three pillars of: management team, customers & suppliers, and financial strength. The Company has established long-lasting relationships with all its vendor partners. Led by a business-friendly approach, it extends timely or earlier payments, provides logistics support for evacuating materials from the vendor’s end, and also helps vendors in arranging labour support at their facilities.

Amidst growing uncertainty in the year gone by, the Company supported its vendors in planning capacities and increasing orders, while also extending financial assistance in some cases. To ensure smooth business operations, the Company increased the capacity of existing vendors and created new vendors as per need. Despite the challenges amidst lockdown and restricted mobility, the sourcing team ensured business continuity through effective communication with the vendors, besides working at prices suiting their business viability.

The Endurance Vendor Association (EVA) supported the Company’s efforts to develop a collaborative network and capabilities, by standardising and adopting the best practices. Leveraging its robust vendor connect, it continued to help the Company deliver superior quality at competitive prices, with excellence on Quality, Cost, Delivery, Development and Management (QCDDM) parameters. The Company has effectively managed to reduce capex by enhancing the list of its lifetime suppliers for semi-finished materials. Various parameters, such as quality, cost, environmental and legal compliance, financial stability and management capabilities, govern the Company’s strict vendor selection process.

To enhance quality focus and minimise imports, the Company is now also looking at in-sourcing some of the products it has traditionally been outsourcing. It is exploring import substitutes and cheaper alternatives to replace the imports.

Production capabilities

Endurance considers QCDDM to be of prime importance to ensure market leadership and business sustainability. The Company’s strict quality compliance has enabled it to build a strong customer network in both, domestic and overseas markets. This strategic approach has enabled the Company to outpace industry growth consistently. The core values of CITTI (Customer Centricity, Integrity, Transparency, Teamwork and Innovation), along with QCDDM parameters, ensure customer satisfaction, internal process control, and improved corporate governance. All outsourcing business partners and vendors also follow QCDDM parameters, ensuring strong and integrated supply chain, thus leading to business continuity and value creation for all stakeholders.

The Company has also adopted TPM as a holistic and ingenious approach to equipment maintenance, in its quest to achieve perfection in manufacturing. TPM emphasises proactive and preventive maintenance to maximise the operational efficiency of equipment, and also empowers operators to help maintain their equipment. The Company’s TPM programme creates shared responsibility for equipment, thus encouraging greater involvement on the shop floor. It is an effective tool for improving productivity by increasing uptime, reducing cycle times, and eliminating defects. It has enabled the Company to achieve less unplanned maintenance, reduced equipment downtime, cost optimisation, automation, space savings, higher levels of work place safety, and defect-free manufacturing on assembly lines.

In the die casting business, the Company has improved material handling processes and lowered human dependence on critical operations through TPM. The Company is also moving from zero manual trimming to hydraulic trimming operations. In the suspension segment, the assembly lines in one of the plants have already been upgraded to attain complete productivity improvement. TPM has also enabled real-time quality checks and reduced manpower requirements on running operations.

As part of its manufacturing excellence thrust, the Company is continually augmenting its capabilities in process knowledge, efficiencies, cost control, quality and asset sweating.

Risks and Concerns

Industry/Macro downturn

The Company is likely to get impacted in the event of a macro-economic slowdown or an auto industry specific downturn.

Mitigation strategy: Driven by strong product diversification, improved product mix, widespread geographical presence and long-lasting relationships with all stakeholders, the Company is well placed to outpace industry growth even in a challenging environment.

Global pandemic outbreak

A highly infectious third/fourth wave of COVID-19, leading to lockdowns or restricted mobility, could impact business growth of all auto component manufacturers, due to reduced demand for new vehicles, as well as lower wear and tear of existing ones.

Mitigation strategy: Led by several pre-emptive cost optimisation initiatives, the Company is equipped to handle the increased cost burden amidst such risks.

Raw material price volatility

Aluminium and steel are the major raw materials for the Company. Any disruption in availability or pricing of these raw materials may have a significant bearing to business profitability.

Mitigation strategy: To insulate itself from price volatility, the Company has signed contracts with OEMs, which enable it to pass on price increases, thereby protecting its own margins.

Commodity price risks and commodity hedging activities

The Company has adequate risk assessment and minimisation system in place including for commodities. The Company’s profits are not materially exposed to fluctuation in prices of any commodity. While the Company’s raw material costs are impacted by changes in the prices of aluminium and steel, the risk on the Company’s profits due to such changes is mitigated by pass-through mechanism in prices contracted for finished goods. Thus, the Company has no exposure in any particular commodity that needs to be hedged through commodity derivatives.

Concentration of customers

Business sustainability faces risk when revenue contribution by a few customers is significantly high, as any disruption in their businesses has a direct bearing on profitability.

Mitigation strategy: The Company has adopted a conscious strategy to enlarge its customer base, while continuing to increase business from existing customers. Geographical expansion, both in domestic and international markets, further enables the Company to reduce dependence on a select few customers, thus de-risking the business. The Company mostly caters to OEMs who are market leaders in their respective segments, ensuring low volatility in business prospects of such clients.

Intensifying competition

Lucrative growth prospects of the Automobile and Auto components industries are always attracting new players to the market.

Mitigation strategy: The Company has a strong foothold in its existing product categories, in both Indian and European markets. Further, its rich experience, strong relationships with all stakeholders, superior quality, technological edge and competitive pricing make it difficult for competitors to capture market share from Endurance.

Talent acquisition and retention of key resources

Human capital is a key resource for the Company, and drives its sustained business growth and profitability.

Mitigation strategy: The Company is committed towards building and sustaining a high performance culture and ensuring development of employees along with its strategic growth. Well-defined HR policies take care of both personal and professional growth of the employees, thereby attracting new talent. Regular trainings for skill upgradation and personal development, coupled with robust policies regarding work acknowledgement and recognition, ensure minimum attrition and ample learning & development opportunities for the employees. The Company’s unwavering focus on people development has led to a performance driven and positive work culture.

Financial performance

FY 2020-21 results include the abnormally adverse numbers of the first quarter, which was impacted by the prolonged suspension of operations due to the pandemic.

Consolidated Total Income including Other Income decreased by 5.6% to Rs._65,777 million as compared to Rs._69,653 million in the previous year.

Of the total Consolidated Total Income including Other Income, 73% came from Indian operations and balance came from European operations.

Standalone Total Income including Other Income de-grew 3.8% to Rs._47,866 million as compared to Rs._49,748 million in the previous year. The growth was led by faster month-on-month recovery post the relaxation of lockdown.

Sales from European business declined 18% in Euro terms.

Consolidated EBITDA de-grew 9.1% to Rs._10,709 million as compared to Rs._11,784 million in the previous year.

Consolidated EBITDA Margin dropped slightly to 16.3% from 16.9%.

Consolidated PAT de-grew by 8.1% to Rs._5,196 million as compared to Rs._5,655 million in the previous year. This includes the Maharashtra state mega project incentive of Rs._872.18 million.

Aftermarket sales from Indian operations grew by 4.7% to Rs._3,116 million as compared to Rs._2,977 million in the previous year. Aftermarket business in India was almost 6.5% of India net sales. The Company is witnessing large growth in the aftermarket business, both for supplies in India as well as overseas. The Company is targeting to increase revenue contribution from this business to at least 10% of domestic net sales. The Company is exporting to 29 countries, and is in the process of adding 5 more countries for exports in FY 2021-22.

Management outlook

Led by its five core values of Customer Centricity, Integrity, Transparency, Teamwork and Innovation, the Company strives hard to fulfil expectations of all stakeholders. It is constantly seeking to grow through both organic and inorganic routes, with strong focus on technology upgradation, quality improvement, cost competitiveness and environment, health and safety. Being committed to drive inclusive progress and value creation for all stakeholders, the Company strives to grow sustainably in existing business, and expand into new product categories, capacities and geographies, backed by continuous enhancements in scale and quality.

Steered by its strong principles, financial strength and a robust management team, the Company sailed through the disruption caused by the global pandemic, despite the ever emerging threats and challenges, during the year. All stakeholders were efficiently managed across the entire supply chain. Endurance aims to continue to augment its core strengths to ensure continued stakeholder engagement and value delivery.

Over the years, Endurance has been committed to technological development, reflected in its new product development, investments in best-in-class manufacturing, R&D and testing facilities, and ‘first time right’ products. Going forward, the focus is on developing innovative, lean and cost competitive designs, to maintain a technological edge across the product range. The Company’s value-added portfolio includes 250cc plus motorcycle brakes and clutch assemblies, paper-based clutch assemblies replacing the cork-based clutch assemblies for motorcycles, supply of continuous variable transmission or automatic clutch for scooters, ABS for 150cc plus motorcycles, inverted front forks and adjustable rear mono-shock-absorbers for both domestic and export OEMs. Going forward, it will expand its presence in these product lines. In castings, the focus is on fully finished machined castings, as compared to raw and semi-finished castings for 2-Wheelers, 3-Wheelers and 4-Wheelers.

To aid future growth, the Company aims to supply products across all the four business segments to all OEMs, thereby increasing the content per vehicle with each of the customers. At the same time, the Company is determined to add new customers across business segments, including EVs, hybrid vehicles and aftermarket. In the aftermarket business, the Company is focussing on improving growth by introducing new products for new models, trading in 2-Wheeler and 3-Wheeler auto parts not manufactured by Endurance, expanding distribution/dealer network, increasing the rural reach in the domestic market, and entering new countries.

As part of its focus on enhancing product mix, the Company has moved into backward integration of aluminium forgings and steel braided hoses, and is also developing new generation products, such as clutch assemblies. The aim is to increase the share of business with existing customers, or serve as cost-effective import substitutes as part of backward integration. The Company also aims to increase patent applications. In Europe, the Company bagged orders of €19.3 million during FY 2020-21 from several key players of which €17 million is in the battery EV/hybrid space, which will start reflecting in sales from FY 2021-22 and will peak in FY 2023-24.

The Company is working hard towards cost optimisation and enhancing operational efficiencies, by deploying multi-pronged cost reduction strategies in manufacturing and sourcing. The incentives received by plants in Aurangabad, which are covered under the package scheme of incentives of the Maharashtra Government to be adjusted from GST, will generate extra cash flow, helping margin improvement.

The Company is actively looking at organic and inorganic opportunities in enhancing supplies to EV / hybrid vehicles, as this is expected to be the next big game changer in the automobile industry. The focus is on increasing business in high profitability segments with low competitive intensity, and having aftermarket sale of a wide range of technology-intensive auto component products.

Since mid-April 2021, there have been lockdowns again in various states, impacting domestic sales. However, the Company is taking measures on fixed cost, variable cost, raw materials cost and capex controls, with full focus on positive cash flows.

In the European business, the expansion strategy revolves around profitable growth, increased share of high margin products, winning marquee customers and exploring inorganic growth opportunities. The Company will continue to work on diversification of product technology and material solutions, increasing machining automation for high-value products and introduction of higher-tonnage PDC machines for large & complex castings. The Company is also working to get back transmissions business in the PV segment in Mexico, UK, and France, along with casting exports.

Cautionary Statement

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.