Endurance Technologies Q2 Review - Margins To Improve As Raw Material Dent To Bottom Out: Yes Securities

Yes Securities Report

Endurance Technologies Ltd. Q2 FY23 reported numbers are not comparable YoY/QoQ due to consolidation of Maxwell Energy Systems Pvt. Ltd.’s financials. Despite, we note consolidated Q2 FY23 results were a mixed as standalone performance came in line with estimates across parameters.

However, European business (adjusted for Maxwell in consolidated) remained weak significantly impacted by steep energy cost inflation (impact of €1.9 million in Q2 FY23 and €3.6 million in H1 FY23).

New order wins of Rs 6.9 billion/€25 million in South Africa/Europe is healthy in H1 FY23 (versus Rs 4.8 billion/€14.3 million in Q1 FY23 and Rs 7.5 billion/€71 million in FY22) is key positive.

Endurance Technologies’ recent acquisition Maxwell energy electric vehicle specific orders at Rs 1.75 billion (including recent order wins of Rs 700 million from Hero Electric) and active lead pipeline of Rs 1.25 billion orders.

Near‐term challenges withstanding, we believe Endurance Technologies should continue to outperform industry growth.

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