Endurance Technologies Ltd Q2 2025 Earnings Call Transcript

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

Question: Mumuksh Mandlesha - Anand Rathi Shares and Stock Brokers Ltd - Analyst : Yeah. Thank you, sir for the opportunity, and happy questions to the management. Sir, can you provide some more details on how you see the revenue ramp up for the new AURIC plant which is starting for the next year? And any details on what kind of products we are targeting? Also on this, can you add for the four-wheeler segment you mentioned about the time frame products and coaching aluminum coaching opportunities. Can you share more or more how do you see the revenue projection for this new products? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 07, 2024 / 5:30AM, ENDU.NS - Q2 2025 Endurance Technologies Ltd Earnings Call

Question: Mumuksh Mandlesha - Anand Rathi Shares and Stock Brokers Ltd - Analyst : Yeah, drive train and alumni forging sir?

Question: Mumuksh Mandlesha - Anand Rathi Shares and Stock Brokers Ltd - Analyst : Okay. So this is really helpful, sir. Just possible to any share what kind of CapEx we are doing for this aluminum forging and the drive train product, sir.

Question: Mumuksh Mandlesha - Anand Rathi Shares and Stock Brokers Ltd - Analyst : Yeah, sure, sir. Sure. Secondly, on alloys sir, how do you see that this new capacity to utilize? I mean, how much period for my 0.26? You see the relation are happening and also, any more color on the new customer wins we have including the EV are the new customers adding the capacity in the [Oracle Gym]. And also how do you see the market share changing with this new wheel, sir?

Question: Mumuksh Mandlesha - Anand Rathi Shares and Stock Brokers Ltd - Analyst : Okay. And so basically in a say a one or two years, you can see the ramp up happening for this new additionals?

Question: Mumuksh Mandlesha - Anand Rathi Shares and Stock Brokers Ltd - Analyst : Okay. And in terms of market share for the segment, do you see that has increased, sir, with the new order win sir.

Question: Mumuksh Mandlesha - Anand Rathi Shares and Stock Brokers Ltd - Analyst : Got it, sir. Sir, last name on the financial side, a limit prices have increased in recent quarters. Has there any impact in the Q2 quarter, and just want to understand generally what is the pass through like for the prices? And secondly, on the incentive part, what is the incentive expected for the second half, sir?

Question: Mumuksh Mandlesha - Anand Rathi Shares and Stock Brokers Ltd - Analyst : So there's no impact of that in the current projects?

Question: Mumuksh Mandlesha - Anand Rathi Shares and Stock Brokers Ltd - Analyst : Got it, sir. Thank you so much for this opportunity.

Question: Mumuksh Mandlesha - Anand Rathi Shares and Stock Brokers Ltd - Analyst : Thank you so much for this.

Question: Aditya Jhawar - Investec Bank - Analyst : Hi. Thanks for the opportunity, and congrats on good set of numbers. My first question is on our aluminum and alloy wheels. What is the expected contribution at INR9.8 million in overall revenue? That is number one number. Second, is that what would be the share of imported alloy wheels in India as we speak?

Question: Aditya Jhawar - Investec Bank - Analyst : Import share in India?

Question: Aditya Jhawar - Investec Bank - Analyst : Sure, that's helpful. Second question is on the profitability of the standalone operation. So this time around we saw a spike in OpEx operating expenses. So it almost increased 20%. YoY to almost about INR400 crore. So is there anything that you would like to call out on this? Why this question, because if you look at the margin expansion, it is largely driven by your gross margin. We did not have a significant benefit of operating leverage despite a 16% of topline growth. So is there anything that you would like to call out in OpEx, number one. Number second, how should we look at standalone margin in the medium to long term?

Question: Aditya Jhawar - Investec Bank - Analyst : Yeah, to some extent because some of the items you mentioned are more part of COGS and employee cost. Now, one would expect that with the better utilization of some of our plants, especially the suspension plan, we could start seeing slight better, performance at the EBITDA level or a EBITDA margin, increase only by 40 basis point YoY that was driven by gross margin. So I'm just trying to understand that is there, you know, this number of INR400 crore, is there anything, you know, one time that you would like to call out or this is a recurring INR100 crore from here on? And when we have to look at margin from FY25 or '26 perspective, what are the drivers of your margin expansion or are there any headwind because multiple factors will flow with regard to product exchange if Greenfield facilities coming on screen. And so if you would like to throw some light on how should we think about margin for the next two years?

Question: Aditya Jhawar - Investec Bank - Analyst : Next question is on Europe. It would be great if Massimo, you can highlight. So clearly there's a BMW order for [EXL], it's a big development. So how is the commissioning commercialization of this plan, number one. Number, second, that the new facility for transmission housing that we have made in Italy, if you can talk a little bit more about it in terms of where are we, in terms of ramping up, what could be the potential revenue? And are we targeting new set of customers from this his business line?

Question: Aditya Jhawar - Investec Bank - Analyst : Yeah. Okay. That's quite helpful, Massimo. Final question is on outlook of Europe this quarter. We did reasonably well. Despite the decline in registration, we reported a strong growth of about 6%. But looking at the our next few quarter and the interaction with customers, what is your sense in terms of overall industry growth in Europe in second half of the year, and what should be the number for your end? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 07, 2024 / 5:30AM, ENDU.NS - Q2 2025 Endurance Technologies Ltd Earnings Call

Question: Aditya Jhawar - Investec Bank - Analyst : Okay. That's very helpful. Thank you, and all the best.

Question: Jinesh Gandhi - Ambit Capital Pvt Ltd - Analyst : Yeah. Hi. First question is on the TV die frame business which you're talking about. So this is going to be through the aluminum [die casting] technology or we are looking beyond that and totally different product or technologies which should be coming into that. We talked about electronics as well, but can you form a light on that?

Question: Jinesh Gandhi - Ambit Capital Pvt Ltd - Analyst : And this is developed in house or we have a partnership with someone? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 07, 2024 / 5:30AM, ENDU.NS - Q2 2025 Endurance Technologies Ltd Earnings Call

Question: Jinesh Gandhi - Ambit Capital Pvt Ltd - Analyst : Got it. Second question is with respect to the loyal business. So clearly there is a good amount of demand which is there, but there is substantial amount of capacity addition happening, not just at endurance but other players as well. So in that context, how should we think about the margins for aluminum alloy business? Would it be similar to the standalone margins are better or lower? If can talk directionally about it.

Question: Jinesh Gandhi - Ambit Capital Pvt Ltd - Analyst : Got it. And with respect to ABS, how big ABS business is now, given that we are already supplying single channel ABS. Can you talk about the size of the business now. And also the road map going forward on the dual channel ABS any other ones on that side?

Question: Jinesh Gandhi - Ambit Capital Pvt Ltd - Analyst : Right? And have you got orders for the channel already or we are in process of getting orders there? Yes.

Question: Jinesh Gandhi - Ambit Capital Pvt Ltd - Analyst : Okay. Got it. And a clarification on the incentive side. So what would it be fair to say that by the time this balance is grow of incentive under the old scheme gets recognized. Probably maybe in 3Q or early next year. And the new scheme comes into operational, there will be GAAP in the FY26 where incentives may not be material, would that be fair understanding.

Question: Jinesh Gandhi - Ambit Capital Pvt Ltd - Analyst : Got it. And last question on the European business side. So we have seen a material divergence between how the easy business has been shaping up in the European market. The demand has been shaping up in the European market and that is when we look at our order wins almost 77% of our order wins come are coming from EVs now as against much lower sales in the total order book. So how do we balance out with respect to our CapEx versus the orderbook built up towards EVs?

Question: Jinesh Gandhi - Ambit Capital Pvt Ltd - Analyst : Sorry. Just give me a second. Yeah. Is it better now?

Question: Jinesh Gandhi - Ambit Capital Pvt Ltd - Analyst : Yeah. So the question for European business is that we are getting substantial orders for EVs and first half, 77% of orders came from EVs. Where is that -- the EVs volumes in the markets are not growing or rather moderating materially?

Question: Jinesh Gandhi - Ambit Capital Pvt Ltd - Analyst : Okay. Got it. And lastly, I'm comment on M&A as a route to grow in the European market. Can you talk about would it be only in the existing aluminum die casting business or we are open to look at new areas beyond aluminum die casting in European market from a mini perspective? Thanks.

Question: Jinesh Gandhi - Ambit Capital Pvt Ltd - Analyst : Got it. Great, thanks, and all the best.

Question: Arvind Sharma - Citigroup - Analyst : Thank you, sir. Good morning. Thank you for taking my question. So the first question is on the ramp up schedule that you've given in the presentation. A very strong ramp up experience. FY26 almost INR23 billion. Would it be fair to assume this is driven by the expansion, the four-wheeler and non-autos or what would be the key drivers for this big ramp up in FY26? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 07, 2024 / 5:30AM, ENDU.NS - Q2 2025 Endurance Technologies Ltd Earnings Call

Question: Arvind Sharma - Citigroup - Analyst : Got it, sir. So it would be fair to assume a decent big ramp up in FY26 revenue or FY25 purely based on the [PPD].

Question: Arvind Sharma - Citigroup - Analyst : Yes. Thank you. The second question. Just sorry, I missed it. The revenue a EBITDA and PAT in euro terms, I missed that part? On the European business sir, I think Massimo shared, but I missed that part.

Question: Arvind Sharma - Citigroup - Analyst : Got it. Got it. Thank you so much for taking my question. That's all from my side. Thanks.

Question: Pramod Amthe - InCred Equities - Analyst : Yeah, hi. Thanks for taking the question. So this is some clarification on this drive train aggression which you have planned for four wheelers. Is it going to be for ice vehicles? And how do you see it with the risk of EVs or hybrids?

Question: Pramod Amthe - InCred Equities - Analyst : No. You said you are entering into a drive train components for four-wheelers, right? If I heard you correct. So how do you see the risk of EV and hybrids when you are entering this new stream of business?

Question: Pramod Amthe - InCred Equities - Analyst : Okay, thank for the clarification. But since you said it's more of a drive train, a little bit confused in terms of how it can be more easy agnostic might be I can take it offline to get more details on this.

Question: Pramod Amthe - InCred Equities - Analyst : And the second one is with regard to European business. Interesting to see new products taking your technology competence to a new level. So how do you see this BMW EXL components versus what you are already doing for the other car makers, one. Second, with regard to specialty plastics, is it a new avenue you are trying to look at as a business opportunity in the car space?

Question: Pramod Amthe - InCred Equities - Analyst : Sure, interesting. Thanks and all the best.

Question: Divya Agarwal - Finfarm Family Office - Analyst : Thanks for the opportunity. So, I just wanted to know about the outlook on the entire aluminum casting sector and your current market share if you can share it. And secondly, we are right now reading the articles of the auto dealers having invented for around [INR80,000 crore]. So, do you see any risk of delay of takes of any aluminum casting products and any risk to the aluminum casting sector?

Question: Divya Agarwal - Finfarm Family Office - Analyst : Yeah. The outlook.

Question: Divya Agarwal - Finfarm Family Office - Analyst : Okay, I got it. Thanks a lot and all the best. Thank you.