Endurance Technologies Ltd is set to list on 19/10/16 and based on response to IPO, general market conditions, firm Grey Market trend, its track record on revenue and profit front, a reasonable listing gain seems to be on cards. While the undercurrents are strong a look at some factor can help one to decide whether to sell or retain the share and price expectations thereof.
Endurance Technologies Ltd product mix is distributed as follows: (Rs. in Lacs)
| Product Type | Revenue by product catg | % of total Business | Comparable companies in respective area |
| Aluminium castings including alloy wheels | 32,901.92 | 62.80% | Aluminium casting- 1) Rockman Industries(Hero Group) 2) Sundram clayton: Sales: 12600 cr. PE 24.92 3) Rico Auto: Sales: 1021 cr. ; PE Ratio: 29.56 Alloy Wheels – 1) Rockman Industries(Hero Group) 2) Alicon Castalloy : Sales: 684 cr ;PE Ratio: 23.39 |
| Suspension | 12224.16 | 23.33% | 1) Munjal Showa, Sales: 1501 cr. PE Ratio:13.58 2)Gabriel India Sales: 1438 cr. PE Ratio:22.56 |
| Transmission components | 2858.67 | 5.46% | Same |
| Brake systems …. | 2433.33 | 4.64% | Nissin , |
| Aftermarket services | 1974.86 | 3.77% |
Sizable business is derived by Endurance Technologies Ltd from Aluminium casting and alloy wheels. Rockman Industries of Hero Group appears to be nearest peer to Endurance Technologies Ltd with presence in both aluminum casting and alloy wheels but is not listed. Next in line are Sundram clayton: Sales: 12600 cr. PE 24.92 (only aluminum casting) but with diversified operations, Rico Auto: Sales: 1021 cr. ; PE Ratio: 29.56 (Casting). Alicon Castalloy : Sales: 684;PE Ratio: 23.39 with presence in alloy wheels is also compareable though Endurance Technologies Ltd is a much bigger company.
Comparison with above and some other Peers in a broad sense in auto ancillary space (Rs.In crores)
| Company | Endurance Tech | Bharat Forge | Motherson | Gabriel | Munjal Showa | Rico Auto | Alicon Castalloy |
| Revenue | 5,273 | 7,838 | 38,395 | 1,438 | 1,501 | 1,021 | 684 |
| Face Value | 10 | 2 | 1 | 1 | 2 | 1 | 5 |
| Operating Profit | 413 | 1413.29 | 3425.2 | 131.12 | 127.44 | 93.98 | 77.71 |
| OPM | 7.83% | 18.03% | 8.92% | 9.12% | 8.49% | 9.20% | 11.36% |
| Net Profit | 290.9 | 647 | 1273.7 | 75.25 | 61.15 | 29.44 | 22.38 |
| NPM | 5.52% | 8.25% | 3.32% | 5.23% | 4.07% | 2.88% | 3.27% |
| Share Capital | 140.66 | 46.57 | 132.3 | 14.37 | 8 | 13.53 | 6.13 |
| EPS | 20.68 | 27.79 | 9.63 | 5.24 | 15.29 | 2.18 | 18.25 |
| Market/Issue Price | 472 | 905.25 | 331.4 | 118.75 | 207.7 | 64.45 | 426.8 |
| P/E | 22.82 | 32.57 | 34.41 | 22.66 | 13.58 | 29.56 | 23.39 |
| RONW | 19.93% | 18.18% | 30.00% | 19.80% | 13.50% | 6.26% | 14.82% |
| NAV | 103.38 | 153.61 | 32.09 | 26.45 | 113.24 | 34.78 | 127.74 |
| CAGR Sales 3 years | 11.09% | 13.96% | 14.90% | 6.06% | -3.89% | -12.56% | 16.52% |
| CAGR NP 3 Years | 19.70% | 31.10% | 42.34% | 20.67% | -1.71% | _ | 0.98% |
If the stock is assumed to command PE of 25, Endurance Technologies Ltd shall list at Rs. 512 ( IPO price 472/-)
At a PE of 28 which will be higher compared to other peers as on date but cannot be ruled out due to various factors, it can command a price of Rs. 579/-.
New: Endurance Technologies has listed on a very strong note and looking at its strong debut , it may sustain a price of 600+ at PE of 29-30.
Related Posts :
Endurance Technologies: Run up to the IPO
Endurance Technologies: IPO Analysis
https://ipoandmore.com/2016/09/27/endurance-tech-ipo-compararion-peers/
Standard disclaimer: I am not a SEBI registered analyst. I may have vested interest in every stock I discuss. Please do your own due diligence as stock market investments have high degree of inherent risk.