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 Q3, consolidated sales grew 18.1% to Rs 1832.3 crore. PAT grew 23.5% to Rs 96.6 crore after considering 20.8 crore as settlement, a provision has been made for additional compensation to the workmen.

EBITDA margins were impacted 0.8% by rising raw material cost. Manesar plant closure had a negative impact of 1.8% on EBITDA margins.

ETL continues to deliver topline growth ahead of the industry

Nine month consolidated Total Income including Other Income (excluding Excise Duty) grew 21.6% to Rs 5631.6 crore.

73% of Consolidated Total Income including Other Income came from Indian operations and balance 27% came from European operations.

Consolidated EBITDA Margin remained strong at 14.7%. Consolidated PAT (before employee settlement) grew 26.2% to Rs 346.4 crore.

Aftermarket sales from Indian Operations grew 18,8% to Rs 195.8 crore.

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

In India, in the first nine months of this fiscal, sales volume growth was 11% for two-wheelers, 32% for three-wheelers and only 2% for passenger vehicles. Within two-wheelers, motorcycle volumes grew by almost 14%.

The company closed the Manesar plant in December and eligible workmen have been paid their dues as per law.

Based on a recently concluded settlement, a provision has been made for additional compensation to the workmen. Towards these costs, the Company recorded an exceptional item of Rs20.8 crore, which reduced standalone PAT margin for the quarter by 100 bps.

In Europe, it predominantly cater to four wheeler OEMs and mainly supply aluminium casting products. European business continued to post a strong performance.

In early January, two of its operating tep-down subsidiaries in Italy were merged. The company acquired 100% stake in an aluminium castings manufacturer in Italy, who has been a key supplier to its operations in that country.

Out of its 25 plants, 16 are in India, 3 are in Germany and 6 plants are in Italy.

The company now has a total of 9 plants in Europe, which work synergistically and form a key part of the customers'supply chain.

Top five clients in Europe are Fiat Chrysler, Daimler, the Volkswagen Group (including Porsche and Audi), BMW and Opel, which is now owned by Peugeot.

Top domestic clients are Bajaj Auto and Honda Motorcycle and Scooter India (HMSI).

In the first nine months its exports from India grew by 47.8% to Rs.265.5 crore. India After market sales grew 18%.

Exports mainly comprise exports of aluminium castings to Getrag [now part of the Magna group], motorcycle front forks and shock absorbers to KTM, Austria and aftermarket exports to 23 countries

Since April 2018, Rs.922.3crore value of business has been awarded to Endurance to be executed by 2021. The new business is mainly from KIA Motors, HMSI, Hero MotoCorp, Yamaha India, Royal Enfield, Fiat India, Ceat India and Tata Motors. This also includes new product platforms as well as a small order for electric two and three wheeler business for suspension and braking products

Its two wheeler suspension plant at Halol, Gujarat started production in September 2018 and is now supplying 100% of front fork and shock absorber requirement of Hero MotoCorp's Halol plant.

Kolar, Karnataka plant for supplying front fork and shock absorbers to HMSI will start supplies from January 2019.The building work is already complete.

In Chennai, it has purchased approximately 9 acres of land at Vallam for second die-casting and machining plant at Chennai and targeting to start production by September 2019. The customers to start with will be KIA Motors, Hyundai and Royal Enfield.

The company made upside down front fork and rear shock absorber export supplies for KTM/Husqvarna 401cc to 790cc motorcycles which went smoothly. KTM is extremely happy with quality. It has now started work on supplying inverted front forks and shock absorbers to KTM's 890cc bikes also.

In Europe business grew 6.3% in rupee terms and fall of 1.3% in Euro terms.

Net consolidated debt stands at Rs 275.8 crore. Debt to equity ratio is 0.11:1.

In Q3 Indian 2-wheeler industry grew 11% and auto industry growth of 10.9% The company's standalone business grew 25.3%

Endurance will also continue to focus on growing profitable business in all its four product areas with existing clients and new clients by leveraging strengths in R&D, strong vendor base and TPM approach for increasing operational efficiencies.

It is focusing on increasing aftermarket and export business in its Indian operations and is looking at organic and inorganic opportunities in both India and Europe.

The company is extremely excited about all the new business as there are large opportunities coming its way in all the four product areas including new products being 150cc motorcycle inverted front forks and shock absorbers, paper fiction plate clutch assemblies, front and rear disc brake assemblies, scooters continuous variable transmission or CVTs and fully machined aluminium castings for four wheelers.

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

It is actively engaged to explore and identify opportunities for mergers and acquisition and technical tie ups with different overseas companies.

Q4 should be better for the auto industry from what it is seeing so far.

It is investing to reach a capacity of 100,000 rear disc brake assemblies a month as well as 200,000 front disc brake assemblies a month totaling 300,000 disc brake assemblies a month by Q4 of this financial year. This is an increase from existing total capacity of 185,000 disc brake assemblies a month.