Strong orders, weak profits; margin recovery dependent on cost pass-through

Delivered PAT 8% YoY ✓; consolidated EBITDA margin 13.1% vs 14.3% prior year — margin actually compressed 120 bps

Consolidated ₹4,348 Cr (29.6%) aligns with delivered ₹4,314.9 Cr (30% YoY)

RMC % jumped from 64.8% (Q1 FY26) to 68.4% (Q1 FY27); management claims ₹300 Cr paid upfront by Endurance as lag effect. Calculation plausible but unverified.

Maxwell income ₹56.5 Cr (Q1 FY27) vs ₹46.6 Cr (Q4 FY26) = 21% QoQ growth; not 85%. The 85% is YoY (₹56.5 Cr vs ₹30.53 Cr in Q1 FY26). Statement ambiguous but supported by year-over-year.

From ₹69.2 Cr (Q1 FY26) to ₹129.7 Cr (Q1 FY27) = 87.4% growth. Matches claim.

Prior call aspired to 10% of revenue. Q1 achieved ₹180 Cr (6% of ₹3.2K Cr standalone revenue). New wins: Hyundai/Kia ₹80 Cr, Shendra ₹513 Cr, Isuzu hybrid, Tata/Mahindra Chakan growth. Cumulative 4W momentum now material.

Prior calls mentioned Battery Management Systems (Maxwell) only. Q1 added 2W battery pack manufacturing (Hero MotoCorp, ramping to 18K units/month), plus 4W battery pack capex ₹62 Cr for Q4 FY27 SOP. This is a new revenue stream not previously detailed.

Customers (Bajaj, RE, TVS) upgraded capex in Q1. Endurance reiterated ₹800 Cr (same as FY26). Justification: already have capacity; outsource to Tier-2 vendors; dynamic situation (can increase if large wins occur). No numeric change.

Prior calls did not flag commodity pass-through risk explicitly. Q1 exposed ₹300 Cr upfront cost due to quarter-lag accounting. Management expects recovery in Q2-Q3 via OEM settlements, but refused to quantify the benefit ('too many variables'). This is a neutral disclosure (transparent but cautious).

Prior calls showed stable Europe order wins. Q1 noted Chinese OEMs (SAIC +32%, BYD +167%, Chery +272%, Leapmotor +500% YoY) taking share, importing components. However, Endurance won Mercedes 100% of hybrid transmission (was 60%), mitigating. Net: margin opportunity offset by volume risk.

Mercedes hybrid transmission (€-value not disclosed, but described as 'very important'); acquired 100% of 60% prior volume from competitor in bankruptcy. SOP January 2027. Also Stellantis ICE order. These are marquee customers but orders in strategic vehicles (hybrid ICE phase-out prone).

Managerial/commercial integration 100% complete. Casting capacity backward integration target: January 2027 agreement. Full impact expected September 2027. Positive tone but delayed execution timeline.

€104.3M revenue (+1.1% YoY); €18.9M EBITDA (+5.5%); €4.4M PAT (-31% due to depreciation of ICE assets). Market up 7.4% but Chinese OEM production exceptional; if normalized, market flat. Endurance still growing YoY. Tone: market difficult but company holding share.

We'll get all Q1 FY26 raw material rates in Q2 (improvement). Aluminium alloy rates softening 12-17 ₹/kg vs Q4 base (gain to us). Steel, rubber, plastics settlements underway. Conversion cost negotiations ongoing. 'Too many variables to give a figure, but definitely better than Q1.' Specific: aluminium alloy softening quantified; overall benefit refused.

Q1 4W business ~₹180 Cr (6% of revenue). Shendra orders ₹513 Cr per annum (peak FY29, long lead programmes). OEMs: USA EV OEM (large, export SOP Sept 2026), Jaguar Land Rover, Valeo electric platforms. Also Hyundai/Kia ₹80 Cr (already started). Tata/Mahindra in Chakan showing strong traction. Direct, detailed with names.

Very high-value business; 'I'll be better positioned to clarify margins next call.' Assembly line 17K-18K packs/month will be fully used by October. 2W order has Endurance BMS + aluminium casting (incremental margin). 4W battery pack (₹62 Cr capex, SOP Q4) both products should be ours, almost finalised. Hedging on margin clarity but confirmed vertical integration strategy.

No gap; already have capacities. Outsource to strong Tier-2 vendors. If Tier-2 capex included, total would be higher. Dynamic situation; large opportunities may increase it. Not lagging, growing 35.9% (net of 12.9% raw material impact, growth is 23.5-24%). Deflected capex expansion; framed as 'sufficient' strategy but acknowledged potential for increases.

Scooter share grew from <10% to 14.3% in Endurance; content increasing especially EV scooters. Motorcycles +19.3%, scooters +32.7% in India; Endurance growing both. 'Not losing; growing share.' Direct rebuttal with share metrics.

Chinese OEMs growing (SAIC +32%, BYD +167%, Chery +272%, Leapmotor +500% YoY), importing powertrains. Endurance in touch; opportunity when they localize in Europe. Also Korean brands (Kia) imports. German OEMs restructuring. But Endurance still winning Mercedes 100% (was 60%), which is a 'clear positive.' Frame: opportunity within challenge; Endurance positioned to win.

Brake systems 34.5%, front fork 44%, shock absorbers 37%. EV-specific: except clutch assembly (3.5% of India sales), all products needed for EVs. New: battery packs (high-value), BMS (Maxwell, huge potential), DC-DC charger (EV), motor controller. Traditional business EV-agnostic. 'Going step-by-step.' Quantified share metrics; acknowledged EV shift.

4.8M wheel sets per annum (9.6M wheels). Chakan ~3M sets (fully used up). Bidkin balance 1.8M sets, currently 60% utilised. Royal Enfield, Ather, Suzuki, Piaggio ramping Q2-Q4. 'Full capacity by end of FY27.' Direct capacity/utilisation data.

Standalone Endurance, produced at Mindewadi plant near Chakan. Not Maxwell. Short, clear.

Q1 FY27 reached ₹4,315 Cr (30% YoY growth). ₹4,526 Cr RFQ in hand suggests >30% sustainable. Multiple SOPs Q2-Q4 expected to accelerate 4W, battery, non-auto segments. Management confident but refrained from stating a number.

Q1 margin 13.1% (consolidated). Management cited ₹300 Cr upfront commodity cost and expects settlement with OEMs in Q2-Q3 (aluminium alloy rates softening 12-17 ₹/kg, steel/rubber/fuel negotiations ongoing). Benefit unquantified. Management stated 'better Q2 and Q3 for sure' but explicitly refused to forecast magnitude.

Key areas: automation (quality, efficiency), ABS/brake expansion, battery pack entry (₹62 Cr for 4W), solar damper plant (Sanand), new SMT line for electronics. Management acknowledged capex is 'dynamic' and could increase if large opportunities emerge. Tier-2 vendor capex not included in ₹800 Cr figure.

Q1 RMC % jumped 360 bps (64.8% → 68.4%). West Asia conflict keeping energy/freight elevated. ₹300 Cr paid upfront by Endurance in Q1; cost recovery dependent on Q2-Q3 OEM settlement negotiations. If settlements slip or partial, margin pressure persists.

Management guided ~15+ new SOPs: ABS (Bajaj dual-channel Q2, second programme Q3), brake systems (Tata, KTM, multiple OEMs Q2-Q3), 4W castings (Shendra SOP Sept 2026, Hyundai/Kia SOP Aug 2026, Isuzu Q4), battery packs (2W Q2, 4W Q4), solar dampers/actuators (H2 FY27), aluminium forgings (Q2, Q3 JLR, German OEM Q2 FY28). Any slip delays revenue ramp and margin accretion.

Chinese OEMs (SAIC +32%, BYD +167%, Chery +272%, Leapmotor +500% YoY in Europe) and Korean imports (Kia) are gaining market share. German OEMs (Mercedes, VW) restructuring and closing ICE platforms. Endurance Europe revenue flat YoY (€104.3M, +1.1% only). While company won Mercedes 100% hybrid transmission (high-value offset), order book visibility declining. Long-term risk if German OEM volumes erode.

HMSI suspension facelift alone ₹219.6 Cr (better margins noted). While Endurance has diversified into TVS (₹250+ Cr total brakes business, +₹35 Cr in Q1), Bajaj, Tata, Mahindra, and exports, HMSI dominance in new orders creates volume and pricing risk if HMSI's growth slows or OEM transitions to in-house or competing suppliers.

Bidkin alloy wheel plant (AURIC) at 60% capacity utilisation (1.8M sets installed, ramping Royal Enfield, Ather, Suzuki, Piaggio in Q2-Q4 to full capacity by FY27 end). Battery pack plant (Mindewadi) in ramp-up phase. These are lower-margin initially; accretive once scaled. Consolidated PAT growth (8% YoY) reflects ramp-up drag vs standalone growth (17.4%). If ramps slip to Q4 or beyond, profitability delayed.