Nirmal Bang bullish on this stock, sees 15% upside! Here's why

The brokerage and research firm Nirmal Bang is bullish on Endurance Technologies Limited stock and believes that new opportunities will accelerate growth in the future.
 
With a market capitalisation of more than Rs 24,000 crore, the shares stand higher than 50 day, 100 day and 200 day moving averages but lower than 5 day and 20 day moving averages.
 
The stock of leading auto component manufacturer has gained 69 per cent in the last one year and has risen 30 per cent since the beginning of this year.
 
According to a recent report by Nirmal Bang, Endurance Technologies Limited is currently evaluating various inorganic growth opportunities (including collaborations; all products are EV-agnostic) for India and the overseas markets and expects to finalize at least two of these opportunities (eligible for PLI) in the near term.
 
It noted that the company has started supplying brake assemblies, suspensions and aluminum castings for e2Ws/e3Ws. In 2QFY22, it won new braking business from Ather (likely to start from April’22) and is in the advanced stages of getting order from other EV OEMs/start-ups.
 
Commenting on its earnings, the brokerage house said that Endurance Technologies’ (ENDU) consolidated revenue came marginally below the estimate (by ~2.6 per cent), mainly due to the decline in car production in Europe amid the ongoing semiconductor shortage.
 
"For the India business, we see that multiple levers of growth are in place with 90 per cent increase in disc brake capacity, backed by orders, 33 per cent increase in alloy wheels capacity, backed by orders, ramp-up of ABS supply to full capacity of 400k units by July-Aug’22, new order wins in fully finished machine castings for non-automotive application and increased focus to grow the aftermarket segment," it said.
 
"We have marginally revised our estimates and expect Revenue/EBITDA/PAT to grow at a CAGR of 16 per cent/18 per cent/23 per cent over FY21-24E, driven by good order book visibility and better operating performance. We value the stock at 32x FY23E EPS and maintain BUY with a target price (TP) of Rs 2,090 per share," Nirmal Bang added.
 
The company reported a standalone profit of Rs 122.37 crore for the quarter ended September 2021 as against a net profit of Rs 134.39 crore in the year-ago quarter. The company's net sales rose 16.4 per cent to Rs 1,501.19 crore during the quarter.
 
According to MarketsMojo, the company has a low Debt to Equity ratio (avg) at -0.01 times and has high management efficiency with a high ROE of 17.55 per cent.
 
The stock is trading at a premium compared to its average historical valuations. The technical trend has improved from Mildly Bullish on November 3, 2021, and it is technically in a Bullish range. Multiple factors for the stock are Bullish like MACD, KST and DOW.