Motilal Oswal recommends stocks of Endurance Technologies to ‘Buy’ with a potential upside of +16%, in 1 year.
The Current Market Price (CMP) of Endurance Technologies is Rs. 1,816. The brokerage firm has estimated a Target Price for the stock at Rs. 2,100. Hence the stock is expected to give a +16% return, in a Target Period of 12 months.
|Current Market Price (CMP)||Rs. 1,816|
|Target Price||Rs. 2,100|
|1 year return||16.00%|
Endurance Technologies’ 2QFY22 performance has been impacted by RM cost inflation and semiconductor shortage, and the near term outlook was also impacted by weak 2W demand. Consolidated revenue of the company has increased by 8% YoY and 11% QoQ to Rs. 18.9b. EBITDA declined by 9% YoY (+6% QoQ) to Rs. 2.6b. Adjusted PAT declined by 8% YoY (+11% QoQ) to Rs. 1.3b. On the domestic front, its standalone revenue has increased by 19% YoY and 30% QoQ to Rs. 15b. India 2W industry volumes fell 4.5% YoY, whereas ENDU’s India revenue climbed up 16.5% in 2QFY22.
Comments by Motilal Oswal
According to Motilal Oswal, “We cut our FY22E/FY23E EPS estimate by 12.5%/2% to factor in weak 2W OEM demand and impact of the semiconductor shortage in India and the EU business. We increase our P/E multiple to 30x (from 28x earlier) to reflect newer revenue streams like non-Auto in die-casting, brakes and transmission for over 200cc Motorcycles, etc., which are not yet factored into our estimates. We maintain our ‘Buy’ rating with a Target Price of Rs. 2,100 per share (30x Sep’23E EPS).”
About the company
Endurance Technologies has grown to have 27 strategically located manufacturing facilities near our OEMs. They have manufacturing centers in 3 countries from 27 plants and exporting to more than 28 countries.
The above stock has been picked from the brokerage report of Motilal Oswal. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.