ENDURANCE - Investment Analysis: Buy Signal or Bull Trap?

Last Updated Time : 19 Sept 25, 2:16 pm

Investment Rating: 4.2

📊 Long-Term Investment Analysis

Endurance Technologies shows strong fundamentals and growth momentum, but its current valuation is stretched. Here's a breakdown

✅ Positives

Consistent Revenue & Profit Growth: Revenue grew from ₹6,547 Cr (2021) to ₹11,560 Cr (2025), and net profit rose from ₹519 Cr to ₹836 Cr

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Strong Return Metrics: ROCE at 21.5% and ROE at 16.1% indicate efficient capital use and shareholder value creation.

Low Debt: Debt-to-equity ratio of 0.01 makes it financially resilient.

EPS Growth: EPS of ₹59.46 in FY25 vs ₹48.38 in FY24 shows earnings momentum

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Bullish Sentiment: Recent price action and analyst coverage suggest strong investor confidence

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⚠️ Concerns

High Valuation: Stock P/E of 58.7 vs industry average of 29.1 implies overvaluation.

Elevated PEG Ratio: At 3.16, it suggests the stock is expensive relative to its growth.

Dividend Yield: Low at 0.34%, not ideal for income-focused investors.

Recent PAT Decline: Q-o-Q profit dipped from ₹187 Cr to ₹166 Cr, indicating short-term pressure.

🎯 Ideal Entry Price Zone

Given the stretched valuation and technical indicators

Fair Value Zone: ₹2,550–₹2,700

This aligns with the 50 DMA (₹2,758) and offers a better margin of safety.

Consider accumulating during broader market corrections or dips below ₹2,700.

🧭 Exit Strategy / Holding Period

If you already hold the stock

Holding Period: 3–5 years minimum to benefit from sectoral growth and capacity expansion (ABS, disc brakes)

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Exit Strategy

Partial Profit Booking: If price exceeds ₹3,100–₹3,200 without earnings support.

Re-evaluate: If ROE drops below 13% or PEG exceeds 3.5 persistently.

Monitor FII/DII Trends: FII inflow is positive (+1.17%), but DII reduction (-1.35%) warrants caution.

Would you like a comparison with peers like Minda Corp or Bosch to refine your strategy?

Sources

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Moneycontrol

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NewsBytes

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www.moneycontrol.com

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NewsBytes

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Business Today | MSN

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