Endurance Technologies (ETL), is in the business of manufacturing two wheeler and three-wheeler automotive component. Endurance also manufactures specified components for four-wheeler passenger vehicles, light commercial vehicles and heavy commercial vehicles.
Brokerage firms ICICI Securities, GEPL Capital, Reliance Securitie and Angel Broking have recommended 'Subscribe' to IPO of Endurance Technologies.
Commenting on the investment rationale, ICICIdirect, said, ''We believe ETL has a diversified product portfolio vis-à-vis its peers thus having an edge in terms of higher association with major OEMs. The company has outperformed industry growth in the past with consistent free cash flow generation & strong return ratios (>20%). At upper price band of Rs 472, the stock is available at 22.9x on FY16 EPS of Rs 20.6. We believe ETL has a stable business model (strong customer base & diversified revenue) & financial performance. Hence we recommend SUBSCRIBE for the IPO.''
Meanwhile, GEPL Capital Research, said, ''Endurance technologies stands to gain from operating leverage. At a P/E of 22.9 xs we believe that Endurance technologies demand a discount to its domestic peers. We assign a Subscribe rating to the IPO.''
Reliance Securitie, said, ''ETL has well-diversified customer mix, geography mix, product mix and vehicle segment mix, which allow the Company to spread its reach and increase its penetration in domestic as well as global auto component segment. The Company has registered higher growth in bottom line compared to top line on account of high-margin European business. During FY12-16, while revenue grew at 8.1% CAGR, PAT witnessed 12.4% CAGR. Considering its bulky size, large-sized OEM customers, premium motorcycle play, high-margin European business, healthy return ratios (~20% ROEs), sustainable EBITDA margin and organic as well as inorganic growth opportunity, we recommend to SUBSCRIBE to the IPO with a long-term time horizon. At its upper end of the price band, the IPO is valued at 22.8xFY16 EPS and 12.3xFY16CEPS.''
Angel Broking, said, ''Endurance Technologies is an aurangabad based auto ancillary company. At the higher end of the price band, company is asking for a valuation 22.9x of its FY16 EPS of Rs 20.6. This valuation looks at par with its peers. We believe that the issue is fairly priced at the current valuation considering its growth initiatives, scalability in operations, focus on profitability and strong RoEprofile. We recommend to 'Subscribe' to this issue.''
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