Anurang Jain–Managing Director, Ramesh Gehaney –Director and COO, Massimo Venuti–Director and CEO, Endurance Overseas and Satrajit Ray–Director and Group CFO addressed the call.

Highlights of the call:

Endurance Technologies (ETL) is one of the leading automotive component manufacturers, having a diverse range of technology intensive products with operations both in India and Europe (Italy and Germany).

In India, it predominantly caters to two and three wheeler OEMs and its products include aluminium castings, suspensions, transmission and braking systems.

Consolidated total Income including other income but excluding Excise Duty grew by 2.8% to Rs 1915.95 crore.

71 % of consolidated total income including other income came from Indian operations and balance 29% came from European operations.

Consolidated EBITDA Margin improved to 18.2% from 14.8%.

Consolidated sales grew 3% to Rs 1909.17 crore.

Consolidated PAT grew 32.9% to 165.59 crore.

Aftermarket sales from Indian operations grew 11.6% to Rs 59.2 crore.

After witnessing tepid growth in the festive season of last year, Q4 FY19 and Q1 FY20 have seen yoy de-growth in the number of two-wheelers and three-wheelers sold in the country.

This de-growth is still continuing.

The inventory with the Original Equipment Manufacturers and their dealers continues to be high and could impact future volumes during this fiscal.

The company had the benefit of revenue from new orders that were announced in the past few quarters.

Endurance's India revenue growth was bolstered by Rs 70.2 crore of incentives recorded during the quarter, under Government of Maharashtra's Package Scheme of Incentives.

The market outlook continues to be uncertain, but the company continues to focus on profitable growth.

The management is bullish about long term sentiments given India's young and aspirational middle income group and potential improvement in infrastructure.

The company continues to actively pursue every possible profitable growth opportunity, in existing products as well as in identified new products.

Europe too is witnessing a drop in volume of new cars registered.

Despite headwinds, overseas business posted a 3% growth in revenues during the quarter.

It is India's largest aluminium die casting manufacturer.

The company is a supplier of aluminium die castings and proprietary products for major 2-wheeler and 3-wheeler manufacturers.

It is a Tier-1supplier to major 4-wheeler OEMs in India and Europe.

It is the largest aluminium die-casting company in India in terms of capacity and output.

Europe strategy is to expand presence in transmission and body parts, which are power-trained, maintain high level of automation, focus on German clients, and make small acquisitions for high-margin business.

It has been considering organic and inorganic opportunities in India and Europe.

The company is regarded for being an end-to-end solutions provider for aluminium die castings, suspensions, transmissions and braking systems

In India, in the Q1 of 2019-20, as per the SIAM data, the 2-wheeler industry sales degrew by 9.7% compared to the Q1 of the previous financial year. Scooters degrew by 16.46% and motorcycles degrew by 6.24%.

In Europe in Q1, Passenger Car sales fell 3%.

The consolidated ROCE is at 24.8% and the ROE at 20.4%.

The consolidated net debt is at Rs.165.9 crore.

Consolidated net debt:equity ratio is at 0.06:1.

The standalone ROCE is at 26.2% and the ROE at 18.4%. The standalone net debt is at Rs133.1 crore and the net debt:equity is at 0.06:1.

Bajaj auto accounted for 37.5% of sales.

Yamaha business grew 6%.

All OEMs are looking at rationalizing their business.

Today, the board got in principal approval to approve tyre manufacturing for 2-3 wheelers. The project is at a proposal stage a with no activity started. Will not go ahead unless 100% confident of profit margins. The idea of manufacturing tyre came in from an existing client.

Final call on tyre manufacturing business venture will be taken in 2 weeks time.

It has technical tie ups with KTM Components GmbH, Austria, leading global brake and suspension company Alder SpA, Italy and a European braking system technology provider.

Technical collaboration with Alder will offer products at lower prices to clients and increase margins. Supplies .are targeted top started in June 2020.

It has s strengthened its partnership with KTM Components GmbH.

During the quarter it received Rs 188.0 crore business was awards from clients like HMSi, Hero, Hyundai and Kia Motors, etc.

It was awarded 128 million Euro worth of new business in Europe.

Top 6 clients comprising 75% of Endurance group business are Bajaj Auto, Fiat Chrysler, HMSI, Royal Enfield, Daimler and the Volkswagen Group (including Porsche and Audi).

The company received its first order from TVS for disc brake assemblies which will start from Q3 of 2019-20. It is also in the process of finalizing business for suspension, ,castings and transmission products.

Hyundai and Kia Motors are emerging as large OEM clients for aluminum casting and machining business

Its 2-wheeler suspension plant at Halol, Gujarat for Hero MotoCorp started production in September 2018 It has now supplying 100% of the front fork and shock absorber requirement to them. It has reached around 2600 sets of front fork/shock absorbers per day. And hopes soon to reach approximately 4000 sets of front fork/shock absorbers per day.

Kolar, Karnataka plant for supplying front fork and shock absorbers to HMSI for the scooters will start supplies from the September 2019. The building work is already complete. In January 2020 it expects to reach 3500 front forks per day.

In Chennai, it has purchased approximately 9 acres of land at Vallam for our second die-casting plant and machining plant. We target to start production in Q3 of 2019-20. The customers to start with will be Kia Motors, Hyundai and Royal Enfield.

In Aurangabad, it has purchased 10 acres of land in Waluj for near-term expansion projects.

The ABS brakes tie-up with BWI, USA is also progressing well. Samples are being tested for performance and road endurance.

During the quarter it received order from TVS for 2 wheeler front forks.

Its 29-acre test track, the ABS tracks are completed and ABS testing is on.

The management sees large increase in business volume and value.

Electric vehicles and the upcoming emission norms are expected to give the Indian consumer wider choice and products that are safer for the rider and the environment. It will supply products also for electric vehicles.

It is also increasing business from Hyundai and Kia Motors.

Will increase supply to KTM plants in Europe.

It hopes to grow higher than industry by focusing on new products, technologies, and new markets. It also hopes to grow inorganically.

Its goal is to add more products to existing four product area portfolios.

For FY 2020, Indian capex won't be over Rs 30 crore but is looking to reduce the capex looking at the current situation of the market.

European capex plan for FY 2020 is 30 million Euros.