Detailed Narrative
Strategic Acquisition of Stöferle and European Performance
Endurance Technologies announced the acquisition of Stöferle in Germany, a highly profitable and vertically integrated company. This acquisition is expected to add EUR 80 million in sales and EUR 15-16 million in EBITDA, funded largely by internal accruals. Despite a difficult European market with new car sales down 0.4% year-to-date, Endurance's European subsidiaries demonstrated strong growth, with Q3 revenues up 21.2% and EBITDA up 26.7% year-on-year, attributed to astute management and new business wins.
Expansion into 4W Segment and New R&D Facilities
The company is making significant strides in the 4W segment, including a new technical assistance agreement for 4W suspension with a leading Korean entity, aiming to become a second source for existing OEMs and a first for new platforms. A new R&D facility (G45) for 2W, 3W, and 4W suspensions is on track to start by March/April 2025, which will be four times larger than the existing facility. Additionally, the AURIC Shendra four-wheeler casting plant, a green building with advanced die casting machines, is set for SOP in June 2025, having already secured orders including ₹730 million from Valeo for an e-axle for Mahindra EV and ₹1.5 billion for export to a global OEM.
Robust Order Wins and Product Diversification
Endurance secured new orders totaling ₹7,806 million this year (excluding Bajaj Auto), with 50% attributed to electric vehicles and 40% to the 4W segment. Key product-wise wins include ₹3,779 million for aluminum castings, ₹1,413 million for suspension, ₹1,710 million for brakes, ₹524 million for transmission clutch assemblies, and ₹415 million for drive shafts. The company also noted that ₹14 billion of orders won since FY21 are expected to reach SOP this fiscal year, with another ₹10 billion slated for FY26, indicating strong future revenue visibility.
EV Readiness and Market Strategy
The company emphasized its EV-agnostic product range, with 96% of its offerings (excluding clutch assemblies) being suitable for both EV and internal combustion engine models. New orders for electric vehicles since FY22 amount to ₹9,631 million, even after removing ₹1,580 million from financially challenged OEMs. Endurance is also developing innovative mid and high-voltage Battery Management System (BMS) platforms (XT-Safe and HP-Safe) and motor control/power electronics solutions, catering to a broad range of market segments and geographies.
Aftermarket Business and ESG Initiatives
Endurance is embarking on a special project with a global consultancy to multiply aftermarket sales over the next two years, focusing on market spread, new product introductions, and exports. On the ESG front, the company is actively working towards a net-zero target, having achieved 43% carbon neutrality and aiming for over 50% by FY30. Initiatives include increased sourcing of captive solar power (capacity doubled to 25 MW), 91% water recycling, and various community development programs through its CSR arm, Sevak-Trust.