Outlook and Valuation
Endurance currently trades at 40% premium to its Indian auto component peers on our FY21E EPS versus others. We believe the company to grow at a pace higher than the 2W industry in line with the upcoming growth opportunites. With high return ratos and superior margin profle, tight capex control (consolidaton of capex and sweatng of recently invested assets will be the focus in coming years), we believe Endurance deserves the premium at which it trades. Also, with the recently concluded OFS, we believe that the overhang of promoter diluton is out of the way. Currently, on FY21E earnings of Rs. 48, the stock is trading at 24x with a PEG of 1.6. Hence, we assign a multple of 29x on FY21E earnings to arrive at a target price of Rs. 1,399, with a BUY rating.