Endurance Technologies IPO – How is it ?

ENDURANCE TECHNOLOGIES LIMITED  manufactures two-wheeler and three-wheeler automotive component wants to go public. But this is not the first time they are trying to go public, Endurance Technologies Ltd  that had earlier filed its draft red herring prospectus (DRHP) with  SEBI in September 2011 but later withdrew it in November 2011, has refiled its papers in an Endurance Tech IPOoffer-for-sale issue. Endurance Technologies Ltd. is coming with an initial public offer which will hit the primary market on 5 October 2016. The company aims to raise Rs. 1,161.73  Cr by offering shares at Rs. 467 – Rs. 472 per Equity Share.

About Company:-

Endurance Technologies Ltd  was incorporated in December 27, 1999. Endurance Technologies Ltd is one of the largest two-wheeler and three-wheeler automotive component manufacturer in India. They are a complete solutions provider, providing end-to-end services by engaging their customers from conception to end-user delivery. Their development process includes design, development, validation, testing, manufacturing, delivery and aftermarket sale service for a wide range of technology-intensive auto component products.

In India, they manufacture a diverse range of technology-intensive automotive components for the two-wheeler and three-wheeler segments. They also manufacture specified components for four-wheeler passenger vehicles, light commercial vehicles (“LCVs”) and heavy commercial vehicles (“HCVs”).

Their products and services in India include:

  • Raw and machined aluminium castings, such as high-pressure, low-pressure and aluminium alloy wheels for motorcycles.
  • Suspension, such as shock absorbers for scooters, motorcycles and three-wheelers, front forks for motorcycles and scooters and hydraulic dampers for quadricycles.
  • Transmission, such as clutch assemblies, cork and paper-based friction plates for motorcycles and threewheelers and continuous variable transmission assemblies (“CVTs”) for scooters.
  • Brake systems, such as hydraulic disc brake assemblies including calipers, master cylinders and rotary disc brakes for motorcycles and hydraulic drum brake assemblies and tandem master cylinder assemblies for three-wheelers.
  • Aftermarket services to cater to the replacement market.

They also have operations in Europe with automated manufacturing facilities in Italy and Germany. Tier one companies are companies that directly supply to OEMs (original equipment manufacturer), and they are a tier one supplier to OEMs for most of their products. The firm have 25 plants across India, Italy and Germany. The firm have 18 manufacturing plants in India, all of which are strategically located in the major automotive manufacturing belts of the country, comprising eight in Aurangabad (Maharashtra), five in Pune (Maharashtra), two in Pantnagar (Uttarakhand) and one each in Manesar (Haryana), Chennai (Tamil Nadu) and Sanand (Gujarat).

Strengths:-

  • Consistent track record of organic and inorganic growth.
  • They are the largest two-wheeler and three-wheeler automotive component manufacturer in India.
  • Strong customer relationships with a wide variety of OEMs.
  • Strong research and development and technological capabilities.
  • Growing and profitable European business.

Strategy:-

  • Focus on high-growth markets such as two-wheelers and three-wheelers in India and passenger cars in Europe
  • Continually improve our research and design capabilities in order to focus on advanced technology, high value-add products
  • Expand our presence in the aftermarket sales services
  • Continue to pursue strategic alliances and inorganic growth opportunities
  • Focus on operational efficiencies to improve returns

Objects of the Issue:

The objects of the Offer are :-

  • To achieve the benefits of listing the Equity Shares on the Stock Exchanges and
  • To carry out the Offer for Sale.

Endurance IPO details

Financials:-
The company made its growth in two wheeler industry and it has seen its revenue growth remain modest in single digits barring a 15% growth in FY15. The last year is not that good but then also its net sales grew just 5% to Rs 5,240 crore for the year ended March 31 2016. Its net profit, however, climbed 15% to Rs 289 crore last year.

Basic EPS on consolitated basis is Rs 20.60 giving a multiple of around 22 which is not very cheap.

Endurance Tech Financial

You can find more details about Endurance as a company here.

Disclaimer: We are not SEBI registered advisor and this article is not an investment advice. We are not authorized to give investment advice nor do we provide it on this website. In case you are interested in investing, we would advise you to contact your advisor for the same. We cannot be held liable for any loss arising due to investment made as per this article.

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