Buy Endurance Technologies, target price Rs 1190: Axis Securities

Axis Securities has given a buy rating to Endurance Technologies with a target price of Rs 1190. The share price moved down by 0.85 per cent from its previous close of Rs 1076.35. The stock’s last traded price is Rs 1067.20.

Endurance Technologies, is a tier 1 Auto ancillary for 2W OEMs and a leading auto component manufacturing company based out of Aurangabad, Maharashtra. Starting with two aluminium casting machines in FY 1986, the company has grown to operate 16 plants in India and 9 plants in Europe. The product portfolio of Endurance Technologies includes aluminium die casting (including alloy wheels), suspension, transmission and braking systems.

Financials
For the quarter ended 30-06-2020, the company reported a Consolidated sales of Rs 603.11 Crore, down 62.23 % from last quarter Sales of Rs 1596.75 Crore and down -68.41 % from last year same quarter Sales of Rs 1909.17 Crore. The Company reported net profit after tax of Rs -24.93 Crore in latest quarter.

Investment Rationale
Endurance Management has been delivering superior return ratios supported by robust margins (NPMs between 6-8%) and upwards of 2.5x asset turnover. Moreover, the company has zero net debt and would be able to leverage any inorganic growth opportunity in technology intensive products in future.