ENDURANCE TECHNOLOGIES: BUSINESS CASE STUDY

BUSINESS ANALYSIS 

In 1985, Endurance technologies commenced their operations with 2 aluminium die casting machines. Now the company has 27 strategically developed manufacturing plants near their OEMs. 

Endurance Technologies entered the two-wheeler suspension business in the year 1996. 

In 1998, the company entered in 2 and 3-wheeler transmission business. 

The company also expanded its business towards aftermarket segment in the year 2001. In the next year, Endurance technologies expanded its presence to Sri Lanka. 

It also started with manufacturing of two-wheeler disc brakes in the year 2004. 

In 2005, the company expanded its aftermarket presence to Bangladesh. 

Endurance technologies have defined their vision to become a first-choice supplier to all their customers by maintaining a culture of Innovation and delivering excellence by their model of QCDDM (Quality, Cost, Development, Delivery and Management). 

The company has 27 plants divided in 3 countries and exports its component to 28 other countries. The 3 countries are:  

1. India where 17 manufacturing plants are present. 

2. Italy where 7 manufacturing plants are there. 

3. Germany where the company has built 3 manufacturing plants. 

BUSINESS MODEL 

REVENUE MODEL 

The revenue contribution of each business is as follows: 

Die casting- 56% 

Suspension- 26% 

Braking system and Transmission- 7% 

Aftermarket services- 4% 

UNIQUE SELLING PROPOSITIONS IN EVERY SEGMENT 

Casting Business:  

In house state of the art tool room facility at Chakan. 

Suspension:  

Adjustable and non-adjustable damping force inverted front forks and mono shock absorbers. 

Braking System:  

Split type callipers, integral callipers & Fixed type callipers. 

Transmission:  

Clutches and Continuous Variable Transmission (CVT). 

EV and Hybrid:  

Collaboration with EV related companies. 

Aftermarket:  

19 years of experience. 

MAJOR CLIENTS OF ENDURANCE TECHNOLOGIES 

1. Bajaj Motorcycles. 

2. Piaggio. 

3. Mahindra and Mahindra. 

4. Hero MotoCorp. 

5. Honda Motorcycle and Scooter India. 

6. FIAT India. 

7. H-D Motor Company India. 

8. GETRAG. 

9. Royal Enfield. 

10. YAMAHA. 

11. TATA. 

12. Suzuki. 

13. KTM. 

TOP MANAGEMENT 

The management team of Endurance technologies is as follows: 

Management Team	Designation	Experience with Endurance	Total Experience
Anurag Jain	Managing Director	23 years	37 years
Ramesh Gehaney	Executive Director and Chief Operating Officer	24 years	30+ years
Satrajit Ray	Executive Director and Group CFO	8 years	33+ years
Massimo Venuti	Director & CEO, Endurance Overseas	6 years	23+ years
Sunil Kolhe	Chief Sourcing Officer	12 years	20 years
Prabhas C Dash	President, After Market	1 year 7 months	31 years
Ravindra Kharul	Chief Technology Officer (India operations)	10 years	DNA
Claudio Mus	R&D Director (Europe operations)	6 years	32 years
Pravin Saraf	President Operations	3 years	26 years
Sunil Lalai	Company Secretary and Executive Vice President- Legal	10 years	24 years

DNA= Data not available 

From the above table it is evident that the management team is quite experienced. Every individual in the management team has a diversified experience which seems a very positive point with respect to the growth of Endurance Technologies. 

INTERESTING FACTS ABOUT THE TOP MANAGEMENT 

It is very important to know the nature of top management as they are the driving force for growth of the company. 

Mr. Anurag Jain has been the Managing director of Endurance Technologies since December, 1999. 

He has a massive experience of over 30+ years in automobile components industry. 

His leadership style has helped the company to grow both organically and inorganically. 

For competitive edge and sustainable growth, Mr. Jain is focusing towards technological upgradation. 

INDEPENDENT DIRECTORS 

Independent directors are very critical elements of the management as they tend to provide unbiased opinions and suggestions which is completely focused on the growth of the company. 

Name of Director	Designation
Mr. Soumendra Basu	Chairman (Non-executive)
Mr. Roberto Testore	Independent Director (Non-executive)
Ms. Anjali Seth	Independent Director (Non-executive)
Mr. Indrajit Banerjee	Independent Director (Non-executive)
Mr. Anant Talaulicar	Independent Director (Non-executive)

Mr. Soumendra Basu has an experience of 31+ years in Banking sector. 

Mr. Roberto Testore has an experience of 30+ years in Automobile sector. 

Ms. Anjali Seth has an experience of 30+ years in the field of law. 

Mr. Indrajit Banerjee has around 40 years of experience in multiple domains like Finance, legal and strategy. 

Mr. Anant Talaulicar has an experience of 30+ years in manufacturing sector specifically in India as well as other parts of the world. 

SALARY TAKEN BY THE MANAGEMENT IN FY 2020-21 

The below mentioned data is taken from the annual report published by Endurance Technologies. 

(Amount in ₹ million) 

Name of Director	Category	Salary
Mr. Anurang Jain	Managing Director, Executive and Promoter	46
Mr. Ramesh   Gehaney	Director and Chief Operating Officer, Executive	22.86
Mr. Satrajit Ray	Director and Group Chief Financial Officer, Executive	23.41
Mrs. Varsha Jain	Director and Head – CSR and Facility   Management, Executive	8.44

Notes:  

1. Other directors didn’t take remuneration in the form of salary as they are non-executive and independent directors. For Independent directors there was commission paid which was 2.25 million rupees in the FY 2019-20. 

2. The amount paid to the officials was well under the profit range which was ₹ 5497.12 million. 

3. In the FY 2020-21, there was no commission paid to the Managing Director of the company. 

FINANCIAL KEY METRICS 

FINANCIAL KEY METRICS	VALUE
MARKET CAPITALIZATION	₹ 23,521 Cr
STOCK P/E	36.9
INDUSTRY P/E	23.4
ROE	15.8%
ROCE	16.6%
DEBT TO EQUITY RATIO	0.15

The market capitalization of Endurance Technologies is ₹ 23,521 Cr which is a large cap company with a strong hold in its sector. 

In Auto Ancillaries sector, Endurance Technologies stands 4^th among other competitors. 

Stock P/E is the ratio of Price per share to Earning of the share. Currently the stock P/E is 36.9 which is higher than the industry P/E of 23.4. In recent times, the market is willing to pay higher for Endurance Technologies based on its past or future earnings. 

The return on equity is 15.8% which gives an indication that the investors are getting 15.8% of return for the amount they have invested. 

The return on capital employed is near to ROE which is 16.6% and shows a decent operating income is generated for every rupee of capital invested. 

Debt to equity ratio tells the company’s liabilities with respect to the shareholder’s equity. Endurance Technolgies currently has 0.15 which is a decent value. 

SHARE HOLDING PATTERN 

Share Holding	Dec-19	Mar-20	Jun-20	Sep-20	Dec-20	Mar-21	Jun-21	Sep-21	Dec-21
Promoters	75	75	75	75	75	75	75	75	75
FIIs	16.82	16.34	11.8	11.59	10.61	9.85	8.34	8.03	7.82
DIIs	6.86	7.36	11.64	11.91	12.8	13.51	15.17	15.33	15.66
Public	1.32	1.3	1.56	1.5	1.59	1.64	1.49	1.64	1.52

The promoters have not sold their stake in the stock hence it is evident that they are very optimistic about the company and believe in the growth. 

DIIs are also increasing their stake consistently which shows the faith institutional firms have on this stock. 

FUTURE OUTLOOK FOR ENDURANCE TECHNOLOGIES 

Due to ease in travel restrictions, there has been a good recovery in the demand of 2 wheelers and passenger vehicles. 

In FY 2021-22, there is an expectation from the Indian automobile industry to witness strong growth in 2-wheeler electric vehicle segment. 

As per a study by CEEW Centre for Energy Finance, the business of electric vehicles in India will reach till USD 206 billion by 2030. 

There is an expectation by IBEF that the Indian automobile industry will reach till USD 251.4 – 282.8 billion by 2026. 

All these parameters will help Endurance Technologies to grow as it is a major supplier of automotive components.