Endurance Technologies Ltd Q1 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Aditya Jhawar - Investec Bank plc - Analyst : Yes, thanks for the opportunity. I have you know, two questions. One is, when we look at our India business for four wheelers, we are seeing some decline. So if you look at last one year FY24, it's reported a decline of about 13% odd. Even in this quarter, there is a decline of 3%. So if you can help us understand that or is there any specific customer-specific issue? That is one? And also you can add on that? If you look at our cumulative order book to say about, say, INR37 billion, what can be the proportion of four wheelers in that? That is question number one. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 14, 2024 / 6:30AM, ENDU.NS - Q1 2025 Endurance Technologies Ltd Earnings Call

Question: Aditya Jhawar - Investec Bank plc - Analyst : Sorry. So here I'm talking about absolute, I understand that percentages will decline, but you know, when you look at absolute numbers from INR600 crores in FY23 on stand-alone, it has come down to about INR511 crores in FY24 to absolute decline of 13%. And even in this quarter, the absolute number is down by about 3%.

Question: Aditya Jhawar - Investec Bank plc - Analyst : No, no, no. So firstly, first question is full year FY24 versus FY23, India four wheeler revenue.

Question: Aditya Jhawar - Investec Bank plc - Analyst : Okay. Okay. And even in this quarter, that was a drag?

Question: Aditya Jhawar - Investec Bank plc - Analyst : Okay. Okay.

Question: Aditya Jhawar - Investec Bank plc - Analyst : And what would be the proportion of that roughly? What is the proportion of the for Getrag exact number.

Question: Aditya Jhawar - Investec Bank plc - Analyst : Okay.

Question: Aditya Jhawar - Investec Bank plc - Analyst : Sure, perfect our second question is that this, you know, Freedom 125, what could be Endurance's content per vehicle in Freedom 125?

Question: Aditya Jhawar - Investec Bank plc - Analyst : Yeah. Okay. Now final question about the (multiple speakers)

Question: Aditya Jhawar - Investec Bank plc - Analyst : Okay. Okay. Perfect. My final question is on the forging business. So if you can help us understand that, you know, we have commissioned a fourth press, so out of the total capacity that we have set up for forging, what would be roughly for internal consumption for a backward integration and what would be for external sales? And since the Forth press has come on stream, what could be the peak revenue potential from, you know, from this capacity.

Question: Aditya Jhawar - Investec Bank plc - Analyst : No. My question is that if you look at FI, [say] coming on stream, so what could be the total revenue potential of forging and out of that, you know, some would be, say 15%, 20% could be for internal. So just wanted to understand that split.

Question: Aditya Jhawar - Investec Bank plc - Analyst : Perfect. That's it from my side, all the best.

Question: Jinesh Gandhi - Ambit Private Limited - Analyst : Hi, Mr. Jain. Couple of questions from my side. Can you talk about again on the passenger vehicles and the non-auto business on the aluminum die-casting, given that has been the focus growth area for the aluminum die-casting business, how has been the order wins and there are [subsignals] for us.

Question: Jinesh Gandhi - Ambit Private Limited - Analyst : Okay. Okay. But clearly, there we are on track for increasing share of business for next three to five years. Obviously, last quarterly basis, things will be different. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 14, 2024 / 6:30AM, ENDU.NS - Q1 2025 Endurance Technologies Ltd Earnings Call

Question: Jinesh Gandhi - Ambit Private Limited - Analyst : Got it. Got it. And second question is on Maxwell. So congrats on first Android for MCUs. So can you talk about how would be the content difference between a BMS versus a microcontroller unit cap, if you can talk about that?

Question: Jinesh Gandhi - Ambit Private Limited - Analyst : BMS and motor control unit.

Question: Jinesh Gandhi - Ambit Private Limited - Analyst : Yeah, obviously, currently the BMS I'm saying (inaudible)

Question: Jinesh Gandhi - Ambit Private Limited - Analyst : Yeah absolute on a per unit basis, how much does the cloud would be only our content there --

Question: Jinesh Gandhi - Ambit Private Limited - Analyst : That's what I'm trying to understand is the MCUs contained higher than BMS how would be? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 14, 2024 / 6:30AM, ENDU.NS - Q1 2025 Endurance Technologies Ltd Earnings Call

Question: Jinesh Gandhi - Ambit Private Limited - Analyst : Okay.

Question: Jinesh Gandhi - Ambit Private Limited - Analyst : Trying to understand per-unit series of entry versus BMS.

Question: Jinesh Gandhi - Ambit Private Limited - Analyst : Got it. And on the order book of mixed well, can you talk about the client concentration in that order book comment should be coming from the new players or the players who have lower market share today versus -- REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 14, 2024 / 6:30AM, ENDU.NS - Q1 2025 Endurance Technologies Ltd Earnings Call

Question: Jinesh Gandhi - Ambit Private Limited - Analyst : Got it. Got it.

Question: Jinesh Gandhi - Ambit Private Limited - Analyst : Yeah, that's (inaudible). And the last question is on the European business. So our two point question over there one is obviously, we have seen a very good growth in the European revenues, but is that partly because of our aluminum cost inflation is that the reason for such a strong growth or sort of we have seen actually very strong growth on the core business?

Question: Jinesh Gandhi - Ambit Private Limited - Analyst : Okay. Okay. So in that context, though, our margin performance has been there, I would say relatively weaker because considering the strong revenue growth coming out, there has been a Q2 decline in margins despite having a stronger revenue outcome. And by the way, also just about 40 bps improvement in margin, what would --

Question: Jinesh Gandhi - Ambit Private Limited - Analyst : My question is, I mean, if you have seen a sequentially strong volume growth and that business has a reasonably good operating leverage, it does not there. The benefit of that, just that's what I'm trying to understand. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 14, 2024 / 6:30AM, ENDU.NS - Q1 2025 Endurance Technologies Ltd Earnings Call

Question: Jinesh Gandhi - Ambit Private Limited - Analyst : Yeah, there's obviously the new plant fixed cost from exchange for this it can be the initial expansion. And lastly, we have talked about is our specialty components, specialty plastic components of strong orders from [Volkswagen]. So that can you talk about the kind of investment will need to make on the capabilities and capacities for this business of ours. Can this be a material new technology for the European business how do you think about this as an opportunity? Unidentified Company Representative So the technology is the same that we have in our hands with the other customer of Stellantis. And also I must say this is finance customer data. Important news is that is the first of all that as a Tier one supplier for myself for a Volkswagen Group, but the plastic injection molding and in this movement let me say fortunately for us, there are a lot of problems to the plastic market due to the increase of raw material and a lot of companies are in financial trouble. And this was an important acquisition for us because this is the first acquisition, but we are discussing for future growth and we can use the existing product production capacity for this business for this reason is absolutely strategic for us. We are speaking about only [2 million] available, but is 20% of the total turnover of the company. So you can imagine, which is the potential for the future.

Question: Jinesh Gandhi - Ambit Private Limited - Analyst : Yeah. No, I understand. That's very, very important point. Agreed. So thanks and all the best.

Question: Pramod Amthe - InCred Capital - Analyst : Yeah, hi thanks. So continuing on this European business, some of the manufacturers, especially Porsche that has guided for a very soft next quarter, will it have how what type of [repo] question for you.

Question: Pramod Amthe - InCred Capital - Analyst : Sure, second one is with regard to India business, when you look at these alternative powertrains, especially XCMG bikes, does your content per vehicle drastically increase or is the same as any other ICE vehicle?

Question: Pramod Amthe - InCred Capital - Analyst : Okay. And the third one is with regard to your car ambitions, considering that there is a GM plant being now acquired by Hyundai and Hyundai anyway, you have existing client Do you see more scope for you to add more components because you already have already capacity available. So how do you look at this opportunity?

Question: Pramod Amthe - InCred Capital - Analyst : And so you will continue the same product set or you have an opportunity to add more components

Question: Pramod Amthe - InCred Capital - Analyst : Okay, sure. Thank you.

Question: Pramod Amthe - InCred Capital - Analyst : Okay. And would you be able to indicate which line you are looking at? Is it still be in the Metal Forming or

Question: Pramod Amthe - InCred Capital - Analyst : Okay. So which is like as existing line and you have been (multiple speakers)

Question: Pramod Amthe - InCred Capital - Analyst : Okay, sure. But do you have any headroom capacity or you have to add capacity in the exhaust of capacity

Question: Pramod Amthe - InCred Capital - Analyst : Okay. Sure. Thanks of. Thanks and all the best.

Question: Divya Agarwal - Finfarm Family Office - Analyst : Hi, sir. Thanks for the opportunity so my question is regarding the element in that business. So I just wanted to know what proportion of the total order book would be in the element --

Question: Divya Agarwal - Finfarm Family Office - Analyst : Yes.

Question: Divya Agarwal - Finfarm Family Office - Analyst : Okay. No problem. And secondly, regarding the order wins in a minute, you knew all wins in the aluminum casting. I actually missed the part of you on that and for the new order wins that you've got in aluminum cutting, so can you repeat that. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 14, 2024 / 6:30AM, ENDU.NS - Q1 2025 Endurance Technologies Ltd Earnings Call

Question: Divya Agarwal - Finfarm Family Office - Analyst : Okay, got it. And in regard to the domestic competition in the aluminum casting itself. So I mean, there are players listed players who are either the sole provider in the our cylinder heads to Toyota, Maruti and many other OEMs. So do we have any kind of relationship like a sole provider to any OEM.

Question: Divya Agarwal - Finfarm Family Office - Analyst : Yes, got it. Thanks. Thanks a lot. All the best.

Question: Akshay Karwa - Anand Rathi - Analyst : Hi, sir. Good afternoon. Thank you so much for the opportunity. Sir, my first question is regarding the four wheeler segments in the earlier comments you mentioned that you expect, four wheeler segment to each 45% in the next by FY27, FY30. Sir, what kind of margins what is important about this conversion rate on the EBITDA margins award as and when we move to more aluminum die-cast product. So would there be what margins could cope with the margin performance at this point in time.

Question: Akshay Karwa - Anand Rathi - Analyst : Right. (inaudible) business being heavier had recently been Jaguar and Hyundai on EBITDA. So by FY27 and FY28 like just wanted to get an idea what the switching.

Question: Akshay Karwa - Anand Rathi - Analyst : Got it. And the second question is regarding Europe business onto one definitive top line numbers in euro terms, the revenue number. Unidentified Company Representative Yes, we closed the first quarter with EUR80.3 million of turnover compared to EUR68.8 million of the previous financial year, an increase of 16.8%. You tell us in terms of EBITDA, we closed with the EUR13.3 million of Europe compared to EUR11.1 million below the previous year and certainly 20.2% of increase compared to the previous year, and the percentage of EBITDA was 16.5%. In terms of net result, we closed with EUR4.9 million compared to EUR4.2 million below the previous financial year with an increase of 15.7%. The percentage of net profit was 6.1%. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 14, 2024 / 6:30AM, ENDU.NS - Q1 2025 Endurance Technologies Ltd Earnings Call

Question: Akshay Karwa - Anand Rathi - Analyst : Yes mam.