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Endurance Technologies (ETL): Disappoints on QoQ execution

News: ETL posted 11.4% QoQ rise in consolidated net sales to Rs.1,888 crore. Reported margins declined by 65 bps sequentially to 13.8% with consequent consolidated PAT up 38.2% to Rs.133.4 crore on low base that had exceptional charges of Rs.31.4 crore.

Views: Performance was disappointing in light of much higher OEM volume growth QoQ for the quarter, particularly on the domestic 2-W side. Margins were hurt by substantial 481 bps gross margin contraction. Going forward, ETL continues to be a compelling play on vehicular premiumisation with credible demonstrated capability on EV side, particularly in Europe.