Endurance Technologies Limited (ENDURANCE) Q2 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the Endurance Technologies' Q2 FY 27 Earnings Conference Call. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star, then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Nishit Jalan from Axis Capital. Thank you, and over to you, sir.

Nishit Jalan:

Thank you, Rio. Good morning, everyone. Welcome to Q2 FY 27 post-results conference call of Endurance Technologies. We are pleased to host the entire management team of Endurance for this call. We have with us Mr. Anurang Jain, Managing Director, Mr. Massimo Venuti, Director and CEO Endurance Overseas, Mr. Rajendra Abhange, Director and COO, Mr. Raja Gopal Sastry, Group CFO, Mr. Aditya Jhawar, Head, Growth and Business Transformation, and Mr. Raj Mundra, Treasurer and Head Investor Relations. I'll now hand over the call to Mr. Anurang now for his opening remarks, post which we will have the Q&A. Over to you, Anurang.

Anurang Jain:

Thanks a lot. Good morning everyone. As we close the second quarter of FY’27, the Indian economy has continued to remain strong, supported by domestic demand and investment. At the same time, geopolitical tensions, particularly in West Asia, have increased the volatility in energy prices and added to uncertainty around global trade and supply chains. The global environment remains uncertain. The re-escalation of the conflict in West Asia has led to higher and more volatile crude oil prices and has added to uncertainty around energy costs, freight, and supply chains. Trade uncertainties and tighter global financial conditions also continue to weigh on the global outlook. In Q2 FY 27, in the Indian automotive sector, as per SIAM, 2W sales grew by 18% year-on-year, with motorcycles at 13% growth and scooters at 30% growth. Passenger vehicle sales increased by 24% year-on-year, while 3W sales rose 25%. In the European Union, new car sales saw a year-on-year rise of 5.6% in Q2 FY 27, with each country recording a sales growth and France leading with a 9.6% growth. In Q2 FY 27, new car volumes in Europe, there was a 27% share of battery electric vehicles, 11% share of plug-in hybrids, and 34% share of hybrids. So, two out of every three vehicles being sold in the European Union are either electric or hybrid. On our Q2 financials, the information has been uploaded at the stock exchanges last evening, along with our presentation explaining the numbers. I will, however, highlight some key numbers: 1.

In Q2 FY 27, our consolidated total income grew 33% year-on-year to ₹ 4,811 crores. The EBITDA grew 17.3% to ₹ 584 crores, our margin was at 12.1%. The consolidated PAT grew 21% year-on-year to ₹ 274 crores with a PAT of 5.7%.

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Endurance Technologies Limited November 04, 2026 In Q2 FY 27, PAT growth was supported by ₹ 36 crores from gain from early acquisition of the 100% stake in Stöferle, the balance 32%. However, this was largely offset by the accelerated depreciation of an OEM program of ₹ 31 crores in Europe. On standalone basis, the Company recorded a total income of ₹ 3,761 crores, a year-on-year growth of 40%. EBITDA grew 18% to ₹ 395 crores with a margin at 10.5%. The PAT grew by 14% year-on-year to ₹ 213 crores with a PAT at 5.7%. Our European business reported total income of ₹ 1,029 crores, a growth of 13% year-onyear, and EBITDA of ₹ 183 crores at 17.8% with a growth of 13.7% year-on-year. PAT was at ₹ 57 crores at 5.5%, which is a growth of 39.6% year-on-year. I would like to mention that our subsidiary Maxwell has reported a PAT positive in consecutive quarter financials. Their total income grew by 94% to ₹ 85 crores in Q2 FY 27. In Q2 FY 27, our consolidated net cash position as on 30th September 2026 was at ₹ 436 crores. 2.

In Q2 FY26, standalone RMC was 66% to sales, and in Q2 FY 27, it is 70% to sales. In spite of a 4% increase in RMC% in Q2, our India standalone EBITDA percentage declined by 2% to 10.5%. The standalone EBITDA amount in Q2 FY 27 has increased to ₹ 395 crores, implying a growth of 18% year-on-year. In Q2 FY 27, the EBITDA amount was higher than Q1 FY 27, which was at ₹ 358 crores. I would like to mention that for Q1 an Q2 FY 27, conversion cost increase of fuels, including diesel, CNG and LPG, and cutting tools were not adjusted by most OEMs, and certain OEM increases have been settled only from Q3 FY 27 or 1st October 2026 onwards. We would like to mention that aluminum alloys and steel form a significant part of our RMC. In Q3 FY 27, we expect steel prices to increase, and we see a softening of the aluminum alloy prices. Overall, as of now, we see an absolute 0.6% lowering of RMC percentage to sales in Q3.

3.

In Q2, we accelerated the acquisition of the remaining 32% stake in Stöferle, taking our ownership of the Stöferle entities to 100%. In Q2, we also acquired 100% stake in Fondalpress in Italy, strengthening Endurance's European aluminum casting and machining capabilities. Fondalpress offers a strong location, a track record of generating over € 60 million in highly profitable revenue, best-in-class quality, factory management processes, and a significant scope for expansion. The net acquisition outlay was just under €1 million. In the coming months, we will realize the planned synergies. We will progressively bring externally sourced casting from Stöferle in-house, manufacture transmission housings for Stellantis, and expand the truck segment business. We expect these to lead to significant gains across our European operations. In Q2, we divested our stake in Veicoli for € 2.2 million upfront plus future earn-outs. Veicoli housed a fleet management software business, which though niche, was quite small and not central to our core business.

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Endurance Technologies Limited November 04, 2026 In Q2 FY 27, the total consolidated income, India share, including Maxwell, was 76% and Europe share was 24%. I would like to inform you that our EV sales in India standalone for Q2 FY 27 grew by 185% to ₹ 229 crores, which was at 5% of our total net sales. 4.

By Q4 FY 27, for ABS, we will have a capacity of 1.54 million single and dual channel ABSs per annum, of which 70% is already booked by Bajaj Auto and Royal Enfield. For the dual channel ABS supplies to Bajaj Auto has started in October this year. The SOP for a second program of Royal Enfield is expected to start in Q4 of this financial year. We are enhancing our ABS product offering with new features. We have already started the ride modes, and now we are adding the traction controls for improved stability. This will help in sales value and margin accretion in our ABS business. At our new Chennai plant for disc brake assembly systems, the SOP will start in March 2027. In Q1 FY 27, we commenced SOP for the KTM brake systems. These programs also include export orders supplied from our Waluj brakes plant. This business will see a significant increase in future years. To meet increased demand for Hero MotoCorp and TVS brakes business, we added a capacity of 1 million units at our Waluj brakes plant. The SOP for this started in Q2 of this financial year.

5.

4W aluminium casting business is a very big focus area for us. We are expanding our business at our Shendra, Chakan, Chennai, and Vallam plants. Our AURIC Shendra plant started SOP on 25th of September this year and will serve fourwheeler OEMs in India, the UK, and the US. This plant does high-pressure and low-pressure die casting, critical machining, and powder coating. The supplies to the US EV OEM have also begun. We are expanding our 4W casting business with domestic OEMs like Tata Motors, Mahindra and Mahindra, and helping Korean OEMs to localise. We are also expanding in commercial vehicles, and are in active dialogue with multiple OEMs. Capacity expansion across multiple locations is already under progress to capture this.

6.

There has been an encouraging progress in the 4W non-auto die-casting business as well as on the non-auto business. a.

On the 4W suspension business, there has been advanced engagement with two Indian and one overseas customer. Out of this, SOP of one customer is expected in H1 FY 28, and the other in H2 FY 29. The third customer SOP timelines will get finalised in Q4 of this year.

b.

4W brakes and driveshaft is also seeing good progress with passenger and commercial vehicle OEMs, with the commencement of SOP for driveshaft in this quarter and for brakes from H1 of the next financial year.

We expect cumulative SOP for 4W suspension, brakes and drive shaft to increase from ₹ 100 crores in FY 28 to ₹ 800 crores in FY 31. We believe, once we start execution in these

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Endurance Technologies Limited November 04, 2026 new areas, engagement with customers would increase. Non-auto business includes supplies to solar, railways, and industrial applications for products like suspension and actuators. We expect cumulative SOP of ₹ 250 crores in FY 28, which should be scaled up to ₹ 650 crores by FY 31. At our AURIC Bidkin 2W alloy wheel plant, supplies to Bajaj Auto began in October last year. SOP started for Ather in September this year and Royal Enfield in October. SOP for Suzuki is expected to begin in this quarter. 7.

Our newly established battery pack business has made good progress, marking another important milestone in our diversification into emerging mobility technologies, a journey that began with our acquisition of Maxwell. We have commenced SOP of battery packs for EVs for a leading 2W OEM with full ramp-up expected in Q3 of this financial year. Also, we have received letters of nomination from two passenger vehicle OEMs for 4W battery packs with SOP scheduled for Q1 and Q2 of the next financial year, respectively. Battery pack business will also help increase our business for Battery Management Systems and aluminum castings.

8.

In H1 of this financial year, our wholly owned subsidiary Maxwell achieved a turnover of ₹ 141 crores as against ₹ 161 crores in the full year of FY 26. In Q2 FY 27, Maxwell revenue grew by 95% year-on-year and 50% quarter-on-quarter to ₹ 85 crores. Our strong R&D and innovation cell at Maxwell at Bangalore is also focusing on the IoT and V2X solutions, TPMS, and high-voltage Battery Management Systems for 4W and e-buses. This is a tremendous profitable growth potential.

9.

Our premium segment suspension business continues to grow with upside down forks and monoshocks, with wider adoption across OEMs and a steadily growing OEM customer base. We are adding capacities in line with the market growth for the upside down forks and we are reaching the milestone of 100,000 units per month, spread across seven OEM customers and including exports by Q4 of this financial year.

10. Aluminium forgings have become an increasingly strategic part of our portfolio, serving both captive consumption for our inverted front fork business and a growing external customer base. To meet this demand, we are adding a fifth aluminum forging press with SOP expected in Q4 of FY 27. In this segment, we have started catering to Indian and EU OEMs. In the non-automotive segment, our state-of-the-art solar damper plant at Sanand, Gujarat is ready and SOP for our European client from this plant has started in Q2. For the solar US client, SOP is expected in the second half of this financial year. We are also gearing up for the supply of solar actuators, and the SOP is expected in Q4 of this financial year.
11. In the transmission segment, we are increasing our business for ‘assist and slip clutches’ with our Italian subsidiary Adler’s technology. We are already supplying assist and slip

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Endurance Technologies Limited November 04, 2026 clutches to Royal Enfield and Kawasaki. For Bajaj Auto, customer validation is in process and SOP is expected in Q4 of this financial year. 12. In the transmission segment of drive shafts, for our 4W driveshaft program, the SOP for Tata Motors is expected in this quarter. Supplies had already begun for the 3W driveshaft programs of Bajaj, Mahindra and TVS and we expect our driveshaft revenue to cross ₹ 100 crores in FY 27. We are also seeing an uptick in our Bajaj EV driveshaft program with volumes expected to grow. 13. Our India capex in FY26 was approximately ₹ 800 crores, compared to ₹ 611 crores in the previous year of FY25, driven by investments in new growth areas. We expect capital expenditure in FY 27 to be around ₹ 1,100 crores. Our consolidated capex is expected to be ₹ 1,250 crores. 14. Under the Maharashtra package scheme of incentives 2019, we have received an addendum taking our incentive up from ₹ 600 crores to ₹ 858 crores. These incentives will be availed by way of state GST refund broadly over a seven-year period. We are well placed to avail more incentives with several of our plants located in Chhatrapati Sambhajinagar and serving OEM customers within the state of Maharashtra. In half one of this year, we have booked an income of ₹ 75 crores against this PSI incentives and expect to book a further ₹ 50 crores in half two of this financial year. 15. Let me now give you a gist of orders won during half one of this financial year. Please note that the business value from new orders is without including orders from Bajaj. Total business win in half one was ₹ 748 crores, largely from HMSI, Tata Motors, Hero MotoCorp, TVS, Ather, and the US EV OEM. The total business won since FY22 is ₹ 6,372 crores, of which ₹ 5,125 crores is new business. From ₹ 6,372 crores of order win, ₹ 3,798 crores of business is still to be realized. Two things to highlight in the total business win order book of ₹ 6,372 crores as on H1 FY 27 compared to FY22 is as follows. a.

The share of the EVs has increased to 24% as on Half 1 FY 27 versus 11% in FY22.

b.

The share of 4W from India has increased to 23.5% in Half 1 FY 27 versus 16% in FY22.

This shows our company’s increasing focus on electric vehicle and four-wheeler new order wins.

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Endurance Technologies Limited November 04, 2026 16. While EU auto market continues to be slow, Endurance has continued to grow order wins. Few things to highlight are: a.

Consolidation in supply chain is also driving order win in Europe, considering Endurance's strong financial.

b.

Like the €10 million order for Mercedes hybrid car won in Q1 FY 27 with SOP in 2027 and the €4 million order from Stellantis won in Q1 for their car and LCVs, with SOP also in 2027.

c.

In Q2, marquee order wins include two orders from Mercedes of € 14 million for specialized components for their upcoming hybrid LCV with SOP in 2029.

In total, € 28 million new orders were won in Half 1 of this financial year. 17. The aftermarket business remains a strategic priority for us with ambitious growth goals set out till 2030, guided by a comprehensive capability-focused blueprint built around the voice of our team, our channel partners, retailers and mechanics. Our India aftermarket business grew by 36% year-on-year in Q2 FY 27, comprising 4% of our consolidated income. It is a significantly margin-accretive business for us. 18. In 4W, we are building on the steps taken in proprietary products such as driveshafts and braking, alongside the expansion of our existing casting capabilities. We also see electronically controlled braking in four-wheelers as an extension of our braking capabilities. The larger objective is to progressively move up the value chain from individual components towards proprietary products and systems while remaining focused around technologies where Endurance has an underlying competency or a credible path to build one. Across 2W, 4W and non-automotive applications, the common philosophy is therefore consistent: we start with Endurance's existing engineering and manufacturing strengths; add electronics and software capabilities, partner selectively where the technology gaps exist and progressively move from being a component manufacturer towards a broader solutions and technology provider. Finally, we are looking at selective diversification beyond automotive, again based on transferable competencies, rather than diversifications for its own sake. These include precision machined and structural components, and dampers, for non-auto applications. With these opening remarks, I would now like to hand over the call to Aditya Jhawar- our Head Growth and Business Transformation. Thank you. Aditya Jhawar:

Thank you, Anurang. Good morning, everyone. It's nice to be on this side of the conference call. I am quite excited to join Endurance and leverage the strong execution track record and a very strong balance sheet to push the pedal on growth and diversification. In the presentation, I would like you to refer to Slide number 3 and 4. We have put forward our strategic priorities with focus on expanding in four-wheelers, in EVs, and non-automotive expansion. The endeavor is also to benefit from regulatory changes. In all the growth vectors mentioned on Slide 4, we have already established business with customers or in advanced engagement with near-term

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Endurance Technologies Limited November 04, 2026 commercialisation, except for aviation and defense, which are under active consideration. For example, we have started supplies to a large US EV customer for their non-auto application. This is expected to start next quarter, while supplies for their automotive applications have already started. While we continue to grow in our existing business, these strategic priorities will help shape our future growth. On Slide number 5, we show that our capex and investments have gone up over the years. Despite that, we have generated FCF consistently and maintained a very strong balance sheet. This positions us very well to further push the pedal on investment and expand in our strategic priorities. Our existing manufacturing capability in India and Europe, along with growing expertise in embedded electronics, positions us very well to tap the new growth areas in automotive and non-automotive. Thank you. Over to the moderator for questions. Moderator:

Thank you very much. The first question is from Arvind Sharma from Citi Group.

Arvind Sharma:

My first question would be on the India business. There has been a slight decline in gross margin. You did talk about commodity costs easing a bit, but exactly how should one look at gross margin going forward, especially the ability to pass through not only just the commodity cost but also the conversion cost?

Aditya Jhawar:

I think Q2 was a challenging quarter from a commodity perspective. Now, how we are seeing is that some customers have agreed for a price increase from 1st of October. Back of the envelope calculation suggests that should also have a positive impact of about 0.5% on gross margin. As we stand, we are seeing favorable commodity basket, as Anurang highlighted, about 0.5% to 0.6% positive impact it should have. So these things and customer engagement is still ongoing. Some customers might give a price increase possibly in Q4, some might give a price increase in possibly in the next financial year. Now, I would also like to take this opportunity to draw your attention to the four Greenfield facilities that are coming on stream. In that, the cumulative capex is about ₹ 1,100 crores that we have incurred. As you would appreciate that these Greenfield facilities, as they come for commercial production, the profitability gradually improves. These four facilities drag had a negative PBT margin of about 0.5% in Q2, which we believe that progressively the drag should come down and in next financial year, we will have these facilities having a positive contribution. So, what I would like to highlight here is that we are seeing that the commodity headwind seems to be largely behind as we stand, and we expect the margin trajectory to improve from here on.

Arvind Sharma:

So should we understand that because of the price pass-through, that's a 0.5% impact and then on top of it would be the 0.5% to 0.6% commodity basket impact. Is that the way to look at it?

Aditya Jhawar:

Yes. That's the way to see it.

Arvind Sharma:

Sure, sir. Thank you. The second question, very interesting, the Endurance 2.0, it's a slide that you put in the presentation. If you could just talk a bit about it, what was the reason for diversifying into quite

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Endurance Technologies Limited November 04, 2026 a few sectors and among them what would be the more near-term diversifications, i.e., next 1, 2 years and which one are more aspirational and more long-term? Aditya Jhawar:

I would like to draw your attention to Slide 4. So, first question, why diversification? So, clearly, Endurance has had a very strong track record in executing in 2W, starting from die casting, moving to suspension, brake, transmission. And then we progressed into four-wheelers, starting again with die casting and moving towards proprietary products. Now, as you know that aluminium die casting is a backbone of lot of other industries. So, our objective is to continue to expand into areas which are areas of strength, which is die casting for us and aluminium as a material, the usage is expected to increase. Now, on slide # 4, the diversification vectors that we have presented, we already have a customer engagement at an advanced stage in most of these vertical. For example, you talk about say non-automotive application, in say power backup, in robotics, we already have customer engagement. We already got approval for supplying suspension parts, for railways. Other than aviation and defence, where we have not started direct supply, but indirect supply has just started. So, most of these areas that we have mentioned, you will see commercial production within this financial year and some will spill over to the next financial year.

Arvind Sharma:

Just one question on the numbers if I may squeeze in, the Euro revenue, EBITDA and PAT, the ones you share normally in the calls?

Massimo Venuti:

Yes, so we closed the second quarter in Europe with € 93.9 million of turnover, compared 88.7 of the previous financial year, with an increase of € 5.2 million, 5.9%. In terms of EBITDA, we grew from € 15.8 million to € 16.7 million with an increase of 5.9%. In terms of net result, we grew from €3.9 million to €5.2 million with an increase of 31.4%. In the net result, there is the impact of the exceptional items linked to the 100% acquisition of Stöferle, where we have had the benefit compared to the liability of € 21.2 million. We bought 32% for €18 million which means with the benefit of €3.1 million in the profit and loss. Without considering this €3.1 million, the net profit should have been €2 million, but only in reduction compared to the previous year, for the acceleration of depreciation in a specific project for Volkswagen Group for approximately €3 million. In terms of net result, without consider this acceleration of depreciation, the result should have been higher compared to the previous year. In fact, the cash flow grew compared from € 13.4 million the previous year to € 17.7 million which means around 18.8% of our turnover.

Jyoti:

Regarding this solar thing. So basically, this solar damper and actuator at Sanand that we are doing. So what's the size of the large volume order, who's the customer and what kind of margin that we will be making it?

Anurang Jain:

There are two customers. One is in Spain and one is in the US. Solar damper is a technology which has been grown in-house based on the experience of our R&D team. And on the potential of this business I would not like to give one number, but I've said that with railways as well as with solar, we are looking at ₹ 250 crores next financial year and about ₹ 650 crores by FY 31. This is a line of sight

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Endurance Technologies Limited November 04, 2026 which we have now. Of course, our endeavour will be always to increase these numbers. Both the solar damper and the actuator, have been done in-house. Jyoti:

What kind of the asset turnover we are expecting?

Raja Gopal Sastry:

The solar business would have a very high asset turnover in excess of eight. We are looking at what we are investing on that because largely the capabilities are available with us and it is more assembly lines. So, the asset turnover would be pretty high.

Jyoti:

Another question around Bajaj that is excluded from the order book and I think largely we do around 30% - 35% of revenue from Bajaj. How large so that is 35%.

Anurang Jain:

So if you take our income in the first two quarters, it is ₹ 9,159 crores. So, you can take a figure of 35% for the group.

Jyoti:

On the Maxwell side, when does it reach to double digit margin?

Anurang Jain:

Well, we hope to do it in the next financial year. That's our target.

Mumuksh Mandlesha:

Firstly, on this quarter, we could see the others segment has seen a good jump. Just want to understand is it largely driven by the battery pack ramp-up and just want to also understand how we are prepared for the capacity for the battery pack for both 2W and 4W and just want to understand also how the margins once you see for this segment?

Anurang Jain:

Regarding the order wins, we'll come later but as far as the battery pack business is concerned, we will reach peak sales for one 2W OEM this quarter itself. We will achieve that. I said we have two business nominations from two 4W OEMs, I can't name them. One is starting by March or April and the other will start in Q2 of the next financial year. And I just want to say that this is definitely a high-value business for us. It has a very good ROCE, I can say that. But of course, margins would be decent. And of course, once we start, our focus is to increase our margins. I think this is something we'll be clearer, maybe in the next call. But definitely, this is because we have just started this business and we hope to make decent margins on this. I will not give you a figure, but this is a high-value business, the battery packs are very highly priced. I would like to add one more thing. That one has to look at the business because the castings and the BMS are supplied by us. So we also have a margin on that.

Mumuksh Mandlesha:

And just if possible to share what kind of capacity would be in terms of revenue side, for 2W and 4W?

Anurang Jain:

As far as 2W capacity is concerned, I cannot give you a value because we don't give those numbers, but you can understand what a battery pack price for a 2W is and the range of a 4W. Generally, one line is about 18,000 battery packs for 2W. For 4W, it's about 8,000 battery packs a month. The values are very, very high. So, that's what I can tell you as of now.

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Endurance Technologies Limited November 04, 2026 Aditya Jhawar:

Just one thing to add. So the larger capex is for setting up the big facility. Once it is done, it is relatively easy to add lines as and when we have a visibility from customer side.

Mumuksh Mandlesha:

On the EV acceleration, what we're seeing across India and Europe, I want to understand Endurance’s presence on the EV components, particularly for the casting segment, and how it differs for the casting segment in the ICE and EV segments?

Anurang Jain:

So as far as the casting orders are concerned, these volumes are increasing. And I've said, in the past years also, that the number of components are much more in an EV. Of course, we focus more on the larger castings. But I'll just tell you that Endurance is present in a large way in the casting, suspension , and braking. And we have just started with the battery pack. And this is a business we would like to grow in future years. As of now, only the clutch assembly business is mainly on ICE. But if you talk about braking, suspension, and castings, as well as alloy wheels, which I consider as a part of castings, this is a business where we are highly entrenched, maybe not supplying to every two-wheeler OEM. But I think we are supplying to the leaders. And now I'm talking the EV OEMs.

Mumuksh Mandlesha:

Finally, on the Fondalpress acquisition- it was an attractive valuation. I just want to understand the rationale and what it adds to the backward integration or the new custom addition, sir.

Massimo Venuti:

The rationale of the acquisition is very simple, because we bought an historical competitor of ours. Please consider that this company, in 2017, did an € 80 million turnover, was one of the major players for the Stellantis Group, and is 40 kilometres from our plant. We bought more or less 16,400 square meters of building. On top of this, there is land available for the future growth. We bought 16 fully automated die-casting machines, ranging from 2,300 ton to 2,800 ton. The equipment is in good working condition and will immediately scale our manufacturing capacity, allowing the production of parts, currently purchased from an external supplier. As you know, in Stöferle, we are buying 100% of the raw parts from the market. And this can be insourced 100% from Fondalpress. So, we can immediately have an economy of scale in our contribution margin and also EBITDA. But to be honest, the strategy is to also use this production capacity and try to enter in the truck sector, because we believe that in the future, the stability and the profitability in this sector could be an opportunity to reinforce our position in Europe. So this was an important opportunity due to the good relationship with the owner of the company that accepted to sell the company for almost nothing. While €12.3 million was the acquisition price, the company had €10.2 million of cash, and also € 2.5 million of stock alongwith 16,000 square meters of building. And please consider that starting tomorrow, we have a new plant of 5,000 square meters of machining for the future growth and diversification with the ability to start with the process of certification, not

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Endurance Technologies Limited November 04, 2026 only in automotive, but also in other sectors,. So, I believe that this could be an important opportunity for the future growth of our European business. Shubham:

Congratulations on the strong order wins in Europe. This is the second consecutive quarter of healthy wins at about €14 million. Could you please help us understand the outlook for order intake in Europe, with Europe imposing curbs on Chinese hybrid vehicles? And as you had highlighted earlier, financial stress among some competitors creating opportunities for you. How should we think about the sustainability of these order wins going ahead?

Massimo Venuti:

So first of all, the acquisition of the new order with Mercedes is an absolutely positive signal, because this is an important business acquisition due to the fact that these are two components of the new transmission of Mercedes starting from 2029. The situation in Europe, as Mr. Jain told you is that we have a stable volume without considering the important increase of the Chinese OEM into the market, because in the previous quarter, the market closed with an increase of 5.6%. But except for the impact of the Chinese, the increase compared to the previous year should have been only 0.7%, because SAIC grew 23%, BYD 133%, Geely 26%, and Chery 215%. And so it means that more than 90% of the increase compared to the previous year has been done by the Chinese OEM. And so, the visibility for the future is to maintain stability. Please consider that despite this situation, Endurance grew more than 3-4 times compared to the market. And as I told you in the previous calls, this is because of the important new business acquisitions we did in the electric field in the last 5 years. To be honest, I have an optimistic view for the future for three reasons. First of all, starting 1st December 2026, the European government has decided to set a cap of 350,000 vehicles for the hybrid import of vehicles from China. These 350,000 vehicles is a cap that can grow only 6% for the next 4 years. And so now there is an important cap and the limit for the import of plug-in and mild hybrid vehicles from China. The second point is that they fixed the duty for the electrical vehicles from China with different ranges, BYD 27%, Geely 29%, SAIC 45%, Tesla 18%, all the others between 21% and 35%. And the last but not the least important point is that by February or March of 2027, the European Community will approve the Accelerator Act. And in the new law, the rules are that at least 70% of the value of nonbattery components in electric vehicles must originate in Europe. So it means that for the supply chain, this could be an opportunity to improve and to increase our production capacity. On top of this, if in the last 6 months, the Chinese OEM exported more than 350,000, which is the cap for the next financial year, they will be obliged to install production capacity also for the internal combustion engine in Europe. And this could be an opportunity for us because we will, for sure, receive request for quotes from the Chinese OEMs. So, to be honest, the strategy to protect the European market can give us the possibility to come back to deeper volumes compared to the past.

Shubham:

Also, on the non-auto segment, particularly on the aerospace and defense part, if you can provide more color on this opportunity, how are we targeting entry into the segment? Are these through M&A or are we developing products in-house or through a tech partner?

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Endurance Technologies Limited November 04, 2026 And how should we think about the overall non-auto mix evolving over a slightly medium term, say by 2030? Aditya Jhawar

As we highlighted earlier that die casting and aluminium, clearly play a very important role in both Aviation and Défense. So, the route that we are adopting in this is two-fold: Number one, we are developing organic capability and also evaluating inorganic opportunities. The kind of inquiries that we are seeing across non-automotive is quite encouraging. And as certain commercialisation will start next quarter onwards, we believe that the number of new customers inquiries will only accelerate. So, we do not want to limit ourselves by saying and putting a number right now that how much contribution can come from non-automotive. As of now, it’s a very dynamic situation. Over the next few quarters, we will have slightly better clarity. But, I must say that the opportunity would only increase as we start execution of current orders in hand.

Hitesh Goel:

First, on this solar and railway business, is it import substitution, because it's a more of a B2B, business, right? So can you shed some light on that?

Rajendra Abhange:

First of all, this entire domain is pretty new to the industry. The growth started happening only a couple of years ago and there are not many players around the world. So we have something like a first in this category. A lot of material is currently sourced from China. So we are displacing China in this case. There are not many players in India.

Hitesh Goel:

My second question is on aerospace and defence. If we look at companies in India, mostly the business which is coming in aerospace and defence supply chain is mostly forging or electronics to some extent or machining, right? So can you shed some light on what kind of parts you will be making here? Because I think that from aluminium, is it only machining, or you are making ground up parts and then machining it. So some sense on that?

Rajendra Abhange:

In the aerospace defence, the parts will not be in the proprietary nature. The responsibility of development will lie with the aerospace manufacturers. We will be supplying them components.

Hitesh Goel:

So it is mostly machining, right? If I am right?

Anurang Jain:

Yes, machining.

Aditya Jhawar:

Hitesh, one point to add here. Now, as you are aware that aluminium die casting has a very big role to play in the supply chain of aviation. So the die casting components are very actively used in the space. We are developing certain components in-house. And we are also, exploring inorganic opportunities, which are also in manufacturing of aluminium die casting components in the space of aviation.

Nishit Jalan:

My question is on standalone four-wheeler business. If I look at the order wins that we have talked about, 23% of total ₹ 6,000 odd crores, that's roughly about ₹ 1,400 crores to ₹ 1,500 crores. Our revenue last year was around ₹ 600 crores. Maybe it will be around ₹ 800 crores, ₹ 900 crores this year. So just wanted to understand how much of these orders are already reflecting in revenues.

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Endurance Technologies Limited November 04, 2026 And when do you expect to see the full scale-up of these orders translating into revenues? So essentially, will we reach ₹ 1,500 crores plus revenues in the next two years, given that orders are already in place? Anurang Jain:

So there are two parts. What I was specifying was more on the proprietary part, because in die casting, we are already large, with Tata, Mahindra and KIA. That I've said separately in my opening remarks, that is something we are growing. And it's a big focus for us- Shendra, Valnam, Chennai and Chakan plants. And we continue new business, including focus on commercial vehicles and passenger cars. So casting is one part. What I think specifically you must be asking is on the proprietary part, which is suspension, braking, driveshafts. It could be the battery packs business for the four-wheelers. It is very difficult to put a number, but I do not see a challenge of reaching ₹ 1,500 crores by FY 31. But I will tell you, as we are speaking, some of the programs are with only one customer. So like we mentioned, you start with one, others may follow. So we are very confident because of our technology and process and product. We are very strong. We have the people for it. We have the relationship with the customers. That's why we have got these businesses being nominated. So we are very, very confident. But when you ask me to put a number, it could be what I told you - by FY31 crossing ₹ 1,500 crores for the proprietary. It could be slightly less, it could be more. But if you ask me that number, not in the next two years, but definitely by FY31 is possible.

Nishit Jalan:

Since we have already have an order book of ₹ 1,500 crores revenue on the 4W side, which means we have already received the orders, we just need to execute that?

Anurang Jain:

Yes. So then that must be including casting. So you are talking about that part which I mentioned.

Nishit Jalan:

Total four-wheeler.

Anurang Jain:

Yes. So you are right. So those orders will happen in the next two years. Those orders which I mentioned as already won will happen in the next two years.

Nishit Jalan:

And so far, currently, whatever are our revenues from four-wheeler business is pure casting. The proprietary products will come incrementally?

Anurang Jain:

Yes. So proprietary products will start with the driveshaft starting in this quarter. Then, like I mentioned, we will have the brakes in the first half of next year and also the suspension. And the battery packs, which I told you, will happen from March or April for one OEM and the second OEM in quarter two of the next financial year.

Ravi Gupta:

I just wanted to understand on the margin front in EV order books. It's good to see that you have given the bifurcation of casting, suspension and other businesses in that segment. So on margin front, it will be supporting the margins, the overall corporate margin or it will be diluting as EV penetration in our order book?

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Endurance Technologies Limited November 04, 2026 Anurang Jain:

No. In fact, the margins will be similar. Of course, we will try and improve it, but the margins will be similar.

Aditya Jhawar:

Just, one thing to clarify. So when you talk about EV revenue, they are coming from our die casting products, our suspension, brakes, all our existing products. And there are new revenue streams that we have added, like battery pack business. So clearly, overall, EV business is margin accretive from the Company perspective.

Ravi Gupta:

Great. And secondly, it would be on non-auto that we have. Directionally, we have given that what are the areas that we are getting into. What are the parameters that we focus on? I mean, we see growth or maybe margins. What are the parameters that we will see before entering into such areas?

Anurang Jain:

So we definitely see the return on investment. We, of course, see the margins and we see what is the target market? If the target market is good, then we enter. So these are three criteria which immediately come to my mind.

Aditya Jhawar:

So these are the criteria for expansion. And also, we need to understand our own capabilities and areas of strength. Along with these financial parameters and areas of strength, that is how we shortlist the areas of diversification.

Anurang Jain:

Yes, that's an important point.

Moderator:

Thank you very much. That was the last question in queue. I would now like to hand the conference over to Mr. Aditya Jhawar for closing comments.

Aditya Jhawar:

So as we see that Q2 was clearly a challenging quarter from commodity headwinds, as I mentioned before, that customer price increases are coming through. We have already indicated 0.5% positive impact of customer price increase from Q3. And there are discussions happening with other customers as well. On the RM side, there is clearly 0.5% to 0.6% positive impact that we expect in Q3 itself. And depending upon how things progress, we will see how the direction moves for the commodities. But clearly, the margin trajectory seems to be getting better. And the Greenfield facilities that I spoke about, the drag that it is having on margin sequentially that should also reduce. And next financial year, it will start contributing positively. And on the demand side, we are seeing a reasonable good outlook from most of the customers. So that is also very encouraging. Thank you. That's it from my side.

Moderator:

Thank you very much.

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