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Financial Results and Business Strategy Discussion - Endurance Technologies

Jul 18, 2024

Financial Results and Business Strategy Discussion - Endurance Technologies

Financial Highlights for FY24

  • Mega Project Incentive: Rs 23.3 million for Q4 FY24.
  • Consolidated Total Income: Grew by 16.7% to Rs 103,216.486 million from Rs 88,849.473 million in FY23.
    • First time surpassing the Rs 100,000 million mark.
  • Consolidated EBITDA: Grew by 30.7% to Rs 14,113.599 million from Rs 10,869 million in FY23.
    • EBITDA margin at 13.7%.
  • Net Profit: Grew by 41.9% to Rs 6,848.8 million (6.6% margin).
    • Includes Maharashtra State Mega Project incentive of Rs 792.35 million.
  • Standalone Total Income: Grew by 16.6% to Rs 79,247 million from Rs 67,907 million in FY23.
  • Standalone EBITDA: Grew by 30.8% to Rs 10,557.183 million from Rs 8,743.4 million in FY23.
    • EBITDA margin at 13.3%.
  • Standalone Net Profit: Grew by 43.7% to Rs 5,877.93 million (7.4% margin).
    • Includes Maharashtra State Mega Project incentive of Rs 792.35 million.
  • Cash Position: No net debt; positive consolidated cash available at Rs 5.44 billion.

Business Performance and Cash Flow

  • Indian Operations: 77% of consolidated total income.
  • European Operations: 23% of consolidated total income.
  • New Business Wins: Rs 11,980 million of business from non-Bajaj OEMs including Royal Enfield, Hero MotoCorp, Tata Motors, Hyundai, Suzuki among others.
    • Comprises Rs 8,248 million of new business and Rs 3,732 million of replacement business.
    • Peak sales expected in FY27.
    • Total four-wheeler business win of Rs 2,810 million (23% of total auto wins in FY24).
  • EV Business: Rs 5,320 million in sales expected to peak in FY26.
    • Orders from HMSI, Ather Energy, Bajaj Auto, Hero Electric, Royal Enfield Electric, Tata Motors' Punch Powertrain.
  • Aftermarket Sales: Grew by 6.92% to Rs 4,693.6 million in FY24.
    • Added three new countries to the network.

Future Strategy and Focus Areas

  • Product Mix and Profit Margins: Focus on bettering the product mix and achieving higher profit margins.
    • Increase the share of four-wheeler business to 45% of consolidated business by FY30.
  • EBITDA Margins: Affected by Rs 200 million one-time gain from vendor and client side.
  • Capacity Expansion: New plant being set up in Aurangabad; SOP to start in Q1 FY26.
    • Focus on four-wheeler and non-automotive aluminium casting business.
    • Expected CapEx: Rs 4.9 billion till March 2028; sales expectation: Rs 5,000 million per annum.
  • Brake Assemblies: Significant expansion in disc brake assembly capabilities.
    • New capacity and customers (Hero MotoCorp, TVS).
  • European Business: Produced 263.3 million Euros in total income with a 7.2% increase from the previous financial year.
    • Focus on electric and hybrid vehicles, large investments in production capacities to meet growing demands.
    • Better quality and automation as per new stringent requirements.
  • M&A Opportunities: Consideration for possible acquisition opportunities to grow in advanced electronics, EVs, and related areas.

Key Takeaways

  • Endurance Technologies has shown robust financial growth in FY24 with a significant rise in total income, net profit, and EBITDA margins despite challenges.
  • Strategic focus on increasing its footprint in the four-wheeler and EV markets, with significant investments in new plants and capacity expansions.
  • Continued success in winning new business, especially in India, with ongoing projects and orders extending into the next few years.
  • Positive cash flow and debt-free state underscore the company's financial health and ability to invest in future growth opportunities.
  • Future focus areas include expansion in premium segments, non-automotive aluminum castings, embedded electronics, and aftermarket sales.

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