Endurance Technologies continues to emerge as a standout in the Indian auto component space, backed by a robust growth trajectory and strategic expansion plans. Motilal Oswal Institutional Equities reiterates a BUY recommendation for the stock with a target price of Rs 3,311, reflecting an attractive upside from the current market price of Rs 2,873. Bolstered by multiple growth drivers—most notably the potential ABS mandate for two-wheelers, aggressive ramp-up in four-wheeler product mix, and resilient European operations—the company is poised to deliver an impressive compound annual growth rate (CAGR) of 18-21% across revenue, EBITDA, and PAT over FY25-27.

Endurance’s Robust Order Backlog and 2W Market Leadership

Endurance has demonstrated consistent outperformance against the core two-wheeler (2W) industry with a 14% revenue CAGR and an 11.5 percentage point market outgrowth over the past five years domestically.

The company’s strong order book stands at Rs 36.1 billion in new orders, with a total order book value of Rs 43.3 billion, underpinning sustained revenue visibility.

Key order influxes include Rs 2.35 billion for suspensions from top OEMs like Honda, TVS, Royal Enfield, and Harley-Davidson, and Rs 2.36 billion from braking systems in FY25.

Strategic manufacturing expansions such as the AURIC Bidkin greenfield plant for alloy wheels (3.6 million units/year capacity) further solidify its supply pipeline.

Endurance’s entrenched relationship with Bajaj Auto remains a competitive advantage, with Bajaj’s share increasing to 38% of revenues in FY25, highlighting the company’s role as a supplier of choice.

Driving Growth through 4W Segment Expansion

Management targets increasing four-wheeler (4W) contribution to 45% of consolidated revenue by FY30 from the present 25%, aiming to diversify revenue streams and capitalize on higher value segments.

The firm is gearing up production capacities in die-casting, with new orders worth Rs 2.75 billion from global OEMs for EV platforms and setting up a new facility at AURIC Shendra with SOP expected by 4QFY26.

Endurance has formed a technical alliance with a Korean partner for 4W suspension manufacturing, targeting collaboration with leading Indian and international OEMs in advanced negotiations.

First-ever orders in 4W braking systems and drive shafts signal initial traction in high-margin components, with SOP planned for emerging advanced braking solutions, including electronic stability program (ESP).

The recent acquisition of a 60% stake in Germany-based Stoferle for EUR 37.7 million, a company specializing in complex castings for both ICE and EVs, cements its foothold in European 4W components and offers attractive synergy prospects.

Mandatory ABS Regulation as a Game Changer

The Ministry of Road Transport & Highways (MoRTH) proposal mandating ABS on all 2Ws from January 2026 (including 50cc ICE and all EVs) could expand Endurance’s addressable ABS market by nearly tenfold.

Endurance currently holds an 11% share in the 2W ABS market with capacity for 640,000 units annually, planning to augment capacity by an additional 2.4 million units by March 2026 anticipating this regulatory shift.

The market potential from ABS alone is estimated at Rs 44.2 billion with Endurance targeting a 25% market share, translating into an incremental revenue opportunity of Rs 10 billion.

Its leadership in disc brake systems, holding a 42% share in disc brake segments and 60% in brake discs, puts the company on a strong growth path as ABS adoption increases.

The company is simultaneously expanding disc brake manufacturing capacities in Waluj and Chennai to support increasing OEM demand from southern states.

European Operations Demonstrate Resilience and Expansion Potential

Despite challenging macroeconomic conditions marked by inflationary pressures and energy cost escalations, Endurance’s European operations have delivered a formidable 12-18% CAGR across revenue, EBITDA, and PAT from FY22 to FY25.

The Europe business has consistently outperformed the industry’s modest 4% volume growth, supported by a sizeable EUR 231 million order backlog with peak revenue visibility by FY29.

Margins have improved amidst adversities, with Q1 FY26 margin at 17.5%, up from 16.7% in FY25, showcasing operational resilience.

The Stoferle acquisition not only enhances product portfolio breadth but also offers entry into German OEM markets with high barriers to entry and advanced manufacturing capabilities.

Financial Outlook and Valuation Metrics

Endurance trades at premium valuations of 40x and 34x FY26 and FY27 estimated EPS respectively, justified by its high-quality, multi-product franchise and sector leadership.

Return ratios are strong with an expected RoE of 16.9% and RoCE of 16% by FY27, supporting the firm’s capacity to generate shareholder value amid expanding scale.

Cash flows remain healthy, with free cash flow generation expected to support ongoing capacity enhancement and acquisition strategies.

Stock Levels and Investment Targets

Current Market Price (CMP): Rs 2,873

Target Price (TP): Rs 3,311 (36x Sep 2027E consolidated EPS)

Support Levels: Rs 2,650 and Rs 2,450—these should act as strong floors given the company’s order pipeline and sector dynamics.

Resistance Levels: Rs 3,100 and Rs 3,300, where profit booking might surface amid near-term market volatility.

Investment Recommendation: Based on strong fundamental triggers including technological leadership, mandated regulatory growth drivers, and strategic global footprint expansion, Endurance Technologies represents a compelling BUY opportunity for investors aiming at a 12-18 month horizon, with an upside potential of approximately 15% from CMP.

Medium Term Stock View: A Blue-Chip Contender in Auto Ancillaries

Endurance Technologies exemplifies a classic growth and quality story in India’s vibrant auto ancillary ecosystem. With an enviable order backlog, a well-diversified product mix spanning the two-wheeler and four-wheeler segments, pioneering ABS integration, and resilient European business operations, the company is well-positioned for sustained outperformance. Its strategic acquisition of Stoferle and consistent capacity expansions reflect a management keen on long-term value creation. For investors, Endurance provides a unique opportunity to ride the secular growth wave in premium two-wheelers, electric vehicles, and stricter safety norms, making it a must-watch stock on the Indian bourses.