Detailed Narrative
Strong Domestic Performance Amidst Global Headwinds
Endurance Technologies reported a robust Q1 FY27, with standalone total income growing 35.9% YoY to ₹3,194.15 crores and consolidated total income up 29.6% YoY to ₹4,348.28 crores. This growth occurred despite a challenging global environment marked by geopolitical conflicts and rising energy costs. Domestic industrial activity remained firm, with the Index of Industrial Production growing 5.1% in May 2026, and automotive sales showing strong recovery across two-wheelers (up 23.6%), passenger vehicles (up 23%), and three-wheelers (up 40%).
Margin Compression Due to Commodity Prices
Despite strong revenue growth, standalone EBITDA margin was 11.2% and consolidated EBITDA margin was 13.1%, impacted by a significant increase in commodity prices. The RMC percentage to total income rose to 68.4% in Q1 FY27 from 64.8% in Q1 FY26, driven by higher costs for aluminium, steel, copper, rubber, and fuels. Management expects to pass on these cost increases to OEMs in Q2 and noted a softening in aluminium alloy rates (12-17 per kg lower), which should benefit margins in the coming quarter.
Strategic Expansion in ABS and Brake Systems
The company is actively expanding its ABS and brake systems capacity, adding 9 lakhs ABS units per annum to its existing 6.4 lakhs units, with SOP for hydraulic brake expansion expected by September/October 2026. Dual channel ABS SOP for Bajaj Auto (120,000 units per annum) is scheduled for this quarter, and a second program will start in Q3 FY27. The new Chennai plant for disc brake assemblies will have a capacity of 3 million units and 4 million discs per annum, with Royal Enfield SOP expected next month.
Growth in 4W Castings and EV Components
Endurance is making significant strides in 4W casting, with cumulative bookings at the AURIC Shendra plant reaching ₹513 crores per annum, and SOP starting in September 2026. New orders from Hyundai and Kia for Chennai 4W casting are valued at ₹80 crores per annum. The company's standalone EV sales in India grew 87.6% YoY to ₹129.7 crores. The Pune battery pack plant, which commenced SOP in June 2026 for Hero MotoCorp, is expected to reach peak volumes by Q3 FY27, with a ₹62 crore capex for 4W battery packs starting SOP in Q4 FY27.
European Operations and Stöferle Integration
European operations recorded a turnover of €104.3 million, a modest 1.1% YoY increase, with EBITDA growing 5.5% to €18.9 million. However, net result declined 31% to €4.4 million due to increased depreciation. The integration of Stöferle is 100% complete on managerial and commercial fronts, with efforts ongoing to integrate casting capacity, expecting full impact by FY28. The European market faces challenges from high energy costs and increased competition from Chinese OEMs, but Endurance secured a significant €13.9 million order from Mercedes for a hybrid vehicle transmission component.
Capital Expenditure and Incentives
India capex for FY27 is projected to remain similar to FY26's ₹800 crores, focusing on automation and new growth areas. The company's standalone net cash balance stood at ₹415.7 crores. Endurance also received an addendum to the Maharashtra Package Scheme of Incentives, increasing the total incentive to ₹858 crores (from ₹600 crores), to be availed over seven years via state GST refund.