ENDURANCE - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 05 Nov 25, 7:43 am

Fundamental Rating: 4.1

📊 Financial Overview: Endurance Technologies exhibits strong financial health with a market cap of ₹39,989 Cr and a debt-to-equity ratio of just 0.01, indicating minimal leverage. The company maintains solid profitability with a ROCE of 21.5% and ROE of 16.1%. However, quarterly PAT declined from ₹187 Cr to ₹166 Cr, reflecting a 1.82% drop.

💹 Valuation Metrics: The stock trades at a P/E of 57.6, significantly higher than the industry average of 32.6, suggesting overvaluation. With a Book Value of ₹309, the P/B ratio is ~9.2. The PEG ratio of 3.10 further indicates that the stock may be priced above its growth potential. Dividend yield is modest at 0.35%.

🏭 Business Model & Competitive Advantage: Endurance Technologies is a leading auto component manufacturer, supplying aluminium die-castings, suspension, transmission, and braking systems to major OEMs. Its diversified product portfolio and long-standing OEM relationships provide a durable competitive moat.

📈 Technical Indicators: The stock is trading near its 50 DMA (₹2,837) and well above its 200 DMA (₹2,537), indicating medium-term strength. RSI at 47.4 suggests neutral momentum, while MACD at 12.3 shows mild bullishness.

🎯 Entry Zone: A more attractive entry point would be in the range of ₹2,600–₹2,700, closer to the 200 DMA, offering a better risk-reward ratio.

🕰️ Long-Term Holding Guidance: With strong fundamentals, low debt, and a resilient business model, Endurance Technologies is a solid long-term holding. However, current valuations suggest waiting for a dip before accumulating.

✅ Positive

• Excellent ROCE (21.5%) and ROE (16.1%) indicate efficient capital utilization.
• Debt-to-equity ratio of 0.01 reflects strong financial discipline.
• Strong OEM partnerships and diversified product lines.
• EPS of ₹48.5 supports consistent earnings performance.

⚠️ Limitation

• High P/E and PEG ratios suggest overvaluation.
• Quarterly PAT declined by 1.82%.
• Dividend yield of 0.35% may not appeal to income-focused investors.

📉 Company Negative News

• Decline in DII holding by 0.49% may reflect cautious domestic sentiment.
• Quarterly profit contraction could indicate margin pressure or rising costs.

📈 Company Positive News

• FII holding increased by 0.30%, signaling growing foreign investor confidence.
• Stock has appreciated 84.4% from its 52-week low of ₹1,556.

🏭 Industry

• Auto ancillary sector is poised for growth with increasing vehicle demand and EV adoption.
• Industry P/E of 32.6 suggests moderate valuation across peers.

🧾 Conclusion

• Endurance Technologies is fundamentally strong with low debt and high returns on capital.
• Valuation is stretched; consider accumulating on dips near ₹2,600.
• Ideal for long-term investors seeking exposure to the auto components sector.