Endurance Technologies Q1 FY26: Is This Auto Component Giant's EV & ABS Strategy a Game-Changer for Future Growth?

Endurance Technologies Limited’s Q1 FY26 results have just landed, and for an automotive component manufacturer navigating a dynamic and often challenging market, the numbers tell a compelling story. While the broader Indian market has seen a mixed bag with a July correction, Endurance appears to be steering clear of the headwinds, driven by strategic pivots and robust execution.

Let’s dissect what these results mean for Endurance’s journey ahead, particularly its ability to build future earnings.

The Order Book: Charting the Course for Future Growth 🚀

For an auto ancillary company like Endurance, the order book isn’t just a list of past successes; it’s a window into future revenue streams. And the Q1 FY26 figures provide a clear view of strategic foresight paying off.

India Business: A Strategic Shift Towards New Opportunities Endurance’s India business secured orders worth a notable ₹560 Crore in Q1 FY26 (this excludes battery pack and Bajaj Auto orders, but includes ₹300 Crore for battery packs as a separate LoI). This adds to a substantial five-year cumulative order book of ₹4,329 Crore, with ₹3,612 Crore stemming from new business wins. This strong pipeline is critical for sustained growth.

The ramp-up schedule for these new orders signals significant future revenue, with an expected peak annual value of ₹3,300 Crore by FY27.

Key highlights from the India order wins:

• Diversification into 4-Wheelers (4W): Orders worth ₹97 Crore for 4W Machined Castings and the first proprietary orders for Passenger Vehicle (PV) Foundation Brakes and Driveshaft mark a strategic expansion beyond the traditional 2-Wheeler (2W) dominance.
• Strong OEM Relationships: Alloy Wheel orders from Royal Enfield contributed ₹68 Crore, bringing the total from RE to ₹164 Crore. New 2W Brakes orders added ₹27 Crore.
• ABS Mandate Opportunity: The upcoming mandatory ABS regulations for 2Ws from January 2026 are a game-changer. Endurance, as the only Indian player, is aggressively expanding its ABS capacity from 640,000 units to 2.4 million units by March 2026, aiming for a significant market share. Dual-channel ABS supply is set to begin in September 2025. This isn’t just about orders; it’s about capitalizing on a regulatory-driven market boom.
• Large Pipeline: The company is currently discussing ₹3,225 Crore worth of Requests for Quotations (RFQs), indicating further potential order book expansion.

The Electric Vehicle (EV) Pivot: Endurance is making significant strides in the burgeoning EV segment, which is a major positive change.

• Q1 FY26 saw ₹30 Crore in EV orders (excluding Bajaj Auto & battery-pack), making up 12% of total standalone orders.
• Cumulatively, EV orders (including Bajaj Auto and battery packs) have reached an impressive ₹1,017 Crore. This includes:
  • ₹410 Crore for Castings
  • ₹300 Crore for Brakes
  • ₹108 Crore for Suspensions
  • Crucially, ₹300 Crore for e-4W applications from renowned international customers like Valeo and Yazaki.
• The Letter of Intent (LoI) for an e-2W battery pack, with a peak annual sale potential of ₹300 Crore, further solidifies its position in the new energy ecosystem.

European Business: A Proactive Shift to EV/Hybrid The European operations secured Euro 1.7 million in Q1 FY26 orders. While seemingly modest for the quarter, the long-term trend is the real story here. Of the Euro 231 million in cumulative orders over the last five years, a striking 83% are for EV (41%) and Hybrid (42%) applications. This deliberate pivot is essential, as Endurance anticipates ICE-related revenues in Europe to shrink from approximately 40% currently to just 25% by FY28. The ramp-up schedule projects peak invoicing of Euro 142+ million by FY29.

This consistent focus on future mobility solutions across both geographies demonstrates management’s agility and commitment to adapting to industry transitions.

Sales Performance: Defying Market Headwinds 📊

In a quarter where the broader Indian vehicle market experienced a slight -0.79% degrowth and EU new car registrations dipped by -1.8%, Endurance Technologies delivered a remarkably strong top-line performance. This resilience is precisely what investors look for.

Here’s a snapshot of the consolidated sales figures:

Key Sales Changes and Drivers:

• Consolidated Total Income surged by 17.3% YoY to ₹3,355 Crore. This exceptional growth, particularly against a backdrop of general market caution (as seen in the July correction), highlights Endurance’s strategic strength.
• Standalone India Business grew by a solid 10.1% YoY, reaching ₹2,351 Crore. This is particularly impressive given the 1.65% degrowth in overall Indian 2-Wheeler sales. The growth was driven by content addition in brakes and suspension for key OEMs (TVS, Royal Enfield, HMSI, Suzuki, Hero MotoCorp) and necessary price corrections due to commodity inflation, along with a ₹33 Crore incentive booked. This implies market share gains and a richer product mix.
• European Business was a key growth engine, expanding by an astounding 39.0% YoY in INR terms (28.5% in EUR terms). While the acquisition of Stöferle certainly played a role, the underlying organic growth of 0.6% in EUR terms is commendable given the declining EU car market. This acquisition clearly bolstered the top-line, aligning with the “domestic-growth themes” preference for investors focusing on the Indian economy’s resilience.
• Maxwell (Embedded Electronics) demonstrated explosive growth of 840.7% YoY, reaching ₹31 Crore. This indicates significant progress in the company’s efforts to establish a foothold in new-age electronics, especially with Battery Management Systems (BMS).

The shifting revenue mix is also noteworthy, with Europe’s contribution to consolidated income rising from 25.2% to 29.9%, and 4-Wheeler’s share increasing from 27.1% to 31.4%. This shows a healthy diversification in line with future industry trends.

Earnings: Strategic Moves Cushioning Cost Pressures 💰

While revenue growth is exciting, sustainable profitability is what truly matters. Endurance’s Q1 FY26 earnings demonstrate a robust performance, especially considering external cost pressures.

Key Earnings Changes:

• Consolidated EBITDA grew healthily by 17.5% YoY to ₹480 Crore, impressively maintaining its margin at 14.3% despite inflationary pressures. This speaks to effective cost management and operational efficiencies across the group.
• Consolidated PAT increased by 11.0% YoY to ₹226 Crore. The slight dip in PAT margin (7.1% to 6.7%) could be attributed to increased depreciation or interest expenses related to CapEx and acquisitions, which are investments for future growth.
• Standalone EBITDA grew by 6.0% YoY, but margins saw a slight dip from 13.5% to 13.0%. Importantly, management explicitly stated that margins would have been approximately 28 basis points higher if metal prices were at last year’s levels. This clarifies that core operational efficiency was largely maintained, with external commodity prices being the primary drag.
• European Operations showed exceptional strength, with EBITDA soaring by 46.1% YoY to ₹174 Crore and margins expanding from 16.5% to 17.4%. This robust performance, significantly boosted by the Stöferle acquisition, underscores its integration success and high profitability.
• Maxwell’s turnaround is a significant positive change. It shifted from a negative EBITDA of ₹4 Crore to a positive ₹1 Crore, and its PAT loss was substantially reduced from ₹7 Crore to ₹2 Crore. This indicates that Endurance’s strategic investments in embedded electronics and new energy are beginning to yield results, transforming Maxwell from a drag on earnings to a contributor.

Given its consistent top-line growth, strategic moves into high-growth areas like EVs and ABS, and effective management of external cost pressures, Endurance Technologies fits the profile of a Fast Grower. The focus on higher-value products and new technologies is driving this accelerated growth.

Fueling Future Growth: The Capital Expenditure Roadmap ⚙️

A company’s CapEx plans are a strong indicator of its commitment to future growth. Endurance has outlined a clear and ambitious plan for FY26:

• Standalone CapEx: ₹286 Crore in Q1 FY26 alone, with over 80% allocated to expansion and dies. This includes crucial investments in capacity for brake assemblies, aluminum alloy wheels, aluminum casting, and machining. The full FY26 CapEx is expected to exceed ₹800 Crore for India.
• European CapEx: Euro 9.0 million in Q1 FY26, aimed at expanding production capacity to cater to new orders from major customers like Stellantis, Daimler, and the VW group. An additional Euro 38 million was invested in the Stöferle acquisition, which is a key growth-oriented CapEx.

These investments are primarily for growth, not just maintenance. Key projects with defined Start of Production (SOP) timelines include:

• A new facility for Machined Castings at AURIC Shendra, with SOP in Q4 FY26.
• A new Lithium-ion Battery Pack plant in Pune, also with SOP in Q4 FY26.
• The greenfield project for Alloy Wheels (3.6 million wheels annual capacity) at AURIC Bidkin, expected to commence production in Q2 FY26.
• Dual-channel ABS supply projected to begin from September 2025.

The clarity on SOP dates provides excellent visibility, indicating that these CapEx investments are not merely aspirational but are on track to convert into tangible revenue and earnings growth in the near future.

Financing Analysis: Strategic Acquisitions and Incentives 🤝

While detailed changes in debt or equity weren’t explicitly provided, the financing story revolved around strategic acquisitions and government support.

• The acquisition of a 60% stake in Stöferle for €37.7 million (with plans to acquire the remaining 40% based on EBITDA over 5 years) is a significant financing event. This move immediately bolstered European revenues and profitability, demonstrating a strategic deployment of capital for inorganic growth.
• The acceleration of the purchase of the remaining 38.5% stake in Maxwell, making it a 100% owned subsidiary, reflects a commitment to fully integrate and leverage this electronics and energy segment.
• Crucially, the company booked a Maharashtra PSI incentive of ₹32.91 Crore in Q1 FY26 and has an eligibility certificate for ₹606 Crore for CapEx incurred until September 2025. These incentives provide significant non-dilutive funding for its aggressive expansion plans, reducing the reliance on traditional financing and strengthening the balance sheet. This support is highly positive for CapEx heavy businesses.

Key Takeaways: A Resilient “Fast Grower” Poised for the Future 🌱

Endurance Technologies has delivered a commendable Q1 FY26 performance, showcasing strong resilience and strategic agility in a dynamic automotive market.

• Strategic Transformation Underway: The company is successfully diversifying its revenue streams, with a clear and aggressive pivot towards EV components, advanced braking systems (ABS), and 4-Wheelers, aligning with the “domestic-growth themes” that market favors.
• Outperformance Against Industry Trends: Despite a subdued auto industry in both India and Europe, Endurance managed to deliver robust top-line and EBITDA growth, a testament to its market position, content addition, and strategic acquisitions like Stöferle.
• Profitability Despite Headwinds: The ability to maintain consolidated EBITDA margins and grow PAT, even with external commodity price pressures, highlights strong operational efficiencies and the positive impact of the Maxwell turnaround and strong European performance.
• Future-Ready Investments with Clear Timelines: The significant CapEx plans for FY26 are strategically aimed at driving long-term growth, especially in new-age mobility solutions. The defined SOP timelines for new plants and product lines provide excellent visibility on future revenue generation.
• Beneficiary of Policy Tailwinds: The mandatory ABS regulations and government incentives like PSI provide tailwinds for specific product lines and CapEx funding, respectively.

In conclusion, Endurance Technologies is not merely surviving but thriving by proactively embracing the evolving automotive landscape. Its strong order book, impressive top-line growth against industry headwinds, and well-defined CapEx plans position it as a “Fast Grower” with clear pathways for sustained earnings expansion. Investors will be keenly observing the successful ramp-up of new projects and the continued integration of the European and Maxwell businesses to solidify these promising trends.

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