ENDURANCE - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 3.9
| Stock Code | ENDURANCE | Market Cap | 34,586 Cr. | Current Price | 2,454 ₹ | High / Low | 3,080 ₹ |
| Stock P/E | 49.6 | Book Value | 324 ₹ | Dividend Yield | 0.41 % | ROCE | 21.5 % |
| ROE | 16.1 % | Face Value | 10.0 ₹ | DMA 50 | 2,555 ₹ | DMA 200 | 2,564 ₹ |
| Chg in FII Hold | -0.12 % | Chg in DII Hold | 0.15 % | PAT Qtr | 188 Cr. | PAT Prev Qtr | 166 Cr. |
| RSI | 45.5 | MACD | -43.1 | Volume | 1,90,914 | Avg Vol 1Wk | 1,14,276 |
| Low price | 1,556 ₹ | High price | 3,080 ₹ | PEG Ratio | 2.67 | Debt to equity | 0.02 |
| 52w Index | 59.0 % | Qtr Profit Var | 1.49 % | EPS | 48.6 ₹ | Industry PE | 28.7 |
📊 Analysis: ENDURANCE shows solid fundamentals but trades at a premium valuation. ROCE (21.5%) and ROE (16.1%) indicate good capital efficiency and profitability. EPS of 48.6 ₹ is strong, and debt-to-equity at 0.02 reflects a virtually debt-free balance sheet. However, the P/E ratio (49.6) is significantly higher than the industry average (28.7), suggesting overvaluation. Dividend yield of 0.41% is modest. PEG ratio of 2.67 indicates growth is priced expensively. Technically, the stock is trading below DMA 50 (2,555 ₹) and DMA 200 (2,564 ₹), with RSI at 45.5 and MACD negative, suggesting near-term weakness and consolidation.
💰 Ideal Entry Zone: 2,300 ₹ – 2,400 ₹ (below DMA levels, offering margin of safety and better valuation comfort).
📈 Exit / Holding Strategy: For long-term investors, cautious holding is recommended given strong ROE, ROCE, and low debt. If already holding, maintain positions with a 3–5 year horizon, but consider partial profit booking near 3,000–3,080 ₹ (52-week high zone) if valuations stretch. Long-term compounding potential exists, but premium valuation requires disciplined entry and exit.
Positive
- Strong ROCE (21.5%) and ROE (16.1%) indicate efficient capital deployment.
- EPS of 48.6 ₹ reflects consistent profitability.
- Debt-to-equity ratio of 0.02 shows virtually debt-free operations.
- DII holdings increased (+0.15%), showing domestic institutional support.
Limitation
- P/E ratio (49.6) is significantly higher than industry average (28.7).
- PEG ratio of 2.67 suggests growth is priced expensively.
- Dividend yield of 0.41% offers limited shareholder returns.
- Stock trading below DMA 50 & 200, showing weak near-term momentum.
Company Negative News
- Quarterly profit variation only +1.49%, showing muted earnings growth.
- Decline in FII holdings (-0.12%), showing reduced foreign investor confidence.
Company Positive News
- Sequential PAT growth (188 Cr. vs 166 Cr.), showing earnings improvement.
- Strong EPS and virtually debt-free balance sheet.
Industry
- Industry PE at 28.7, lower than company’s valuation, suggesting ENDURANCE trades at a premium.
- Auto ancillary sector benefits from rising demand in OEM and aftermarket segments.
Conclusion
⚠️ ENDURANCE is a moderate candidate for long-term investment. Strong ROE, ROCE, and low debt are positives, but high valuation and modest dividend yield limit attractiveness. Ideal entry zone is 2,300–2,400 ₹ for margin of safety. Investors should hold for 3–5 years, with partial exits near 3,000–3,080 ₹ if valuations peak.
Selva, would you like me to extend this into a peer benchmarking overlay with auto ancillary peers (like Motherson Sumi, Bosch, Sundram Fasteners) so you can compare relative strength and margin-of-safety positioning for your basket rotation strategy?