Endurance Technologies Limited (ENDURANCE) Q3 FY2026 Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Endurance Technologies Q3 FY '26 Results Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Nishit from Axis Capital Limited. Thank you, and over to you, sir.

Thank you so much. Good morning, everyone. Welcome to Q3 FY '26 post-results conference call of Endurance Technologies. We are pleased to host the entire management team of senior management of Endurance today. We have with us Mr. Anurang Jain, Managing Director; Mr. Massimo Venuti, Director and CEO, Endurance Overseas; Mr. Rajendra Abhange, Director and COO; Mr. Raja Gopal Sastry, Group CFO; and Mr. Raj Mundra, Treasurer and Investor Relations. I'll now hand over the call to Anurang for his opening remarks, post which we can move to the Q&A. Over to you, Mr. Jain.

Thanks a lot. So good morning, everyone. As we close quarter 3 of FY '26, India's economic backdrop remains strong in a complex global environment. The government's first advance estimates project real GDP growth at 7.4% for FY '26, supported by sustained private consumption, steady investment activity and improving services and manufacturing output. The World Bank has also raised its FY '26 growth forecast to 7.2% and retained its FY '27 forecast at 6.5%. Inflation has remained within comfortable limits and monetary conditions have been broadly stable through the quarter. The RBI had lowered the repo rate in the last quarter by 25 basis points to 5.25%, thereby lowering borrowing cost and supporting consumption and investment. In the full year 2025, the repo rate was lowered by 125 basis points. In the bimonthly meeting held in February 2026, the repo rate was kept unchanged and RBI has cited that the trade deals are expected to boost growth. On the domestic policy front, the GST rate rationalization implemented in September 2025 has continued to support consumption. The simplified slab structure and lower rates across most of automotive sector, including auto components have improved affordability and lowered the cost of ownership, contributing to strong industry sales numbers well beyond the festive season. India's growth will be supported not only by strong domestic demand, but also international trade, where key trade agreements are taking shape. India and the European Union announced a free trade agreement last month, which is being acclaimed as extremely important for both. Last week, India and the U.S.A. announced an interim agreement framework on reciprocal and mutual beneficial trade, and this is expected to progress into a more comprehensive agreement, offering greater market access, new opportunities and lower uncertainty for business. Global growth in 2026 is expected to be more moderate due to softer demand in advanced economies and slower trade expansion amid ongoing geopolitical and trade uncertainties. In the Indian automotive sector, as per SIAM, 2-wheeler sales reached 7.1 million units in quarter 3 FY '26, up 18.2% year-on-year with motorcycles at 14.7% growth and scooters at 26.6% growth. Passenger vehicle sales increased by 19.2% to 1.5 million units, while 3-wheeler sales rose 29.9% to 0.34 million units. Clearly, the GST cut impact has continued beyond the festive months. In the European Union, new car sales saw a year-on-year rise of 4.6% in quarter 3 FY '26, with Germany and Spain recording high single percentage growth. Italy was flattish, while France recorded a degrowth. In quarter 3 FY '26, new car volumes in Europe, there was a 21% share of battery electric vehicles, 10.6% share for plug-in hybrids and 34% share for hybrids. So roughly 2 out of every 3 vehicles sold in the European Union are either electric or hybrid. On the strategic growth front, we are pleased to share key updates. As you are aware, the government had issued a draft guideline in June 2025, mandating ABS for greater than 50 cc 2-wheelers and all EVs greater than 4-kilowatt motor power. We are awaiting the final guidelines for the same, which we hope should be clarified by end of this quarter. Since ABS is already mandatory for more than 125 cc 2-wheelers, we expect the incremental demand to come largely from the 125cc and below segments with single-channel ABS, where we have over 4 years of strong execution experience. For the dual channel ABS program, SOP is now expected to start next month as we await the final clearance from a key OEM customer. To help increase our profit margin on ABS, the electronic control unit or the ECU, the in-house SOP for this single channel ABS is expected to begin in quarter 1 of FY '27 on a surface-mounted technology line at Waluj, Sambhajinagar. The dual channel ECU will follow later in the same financial year. We are installing a new SMT line or a surface-mounted technology line as we expect volumes to substantially increase with this new line in half 1 of the next financial year. Civil construction for the Chennai plant for disc brake systems is at an advanced stage. Key machinery will be installed from quarter 1 FY '27 onwards and the SOP is planned for quarter 2 FY '27. The plant will have a capacity of 3 million disc brake assembly systems per annum and 4 million brake discs per annum as part of the total 7.6 million disc brake systems and 8.6 million brake disc planned at Endurance. The location will help us better serve our OEM customers in South India, while creating space at our Chhatrapati, Sambhajinagar plant for the new ABS expansion and the 4-wheeler brakes business. Our new integrated R&D facility for brakes was commissioned in January 2026 at Waluj, Sambhajinagar, and we will be fully operational in this quarter. This facility is double the size of the existing one and integrates 2-wheeler brakes and ABS R&D with space provision for testing of 4-wheeler brake assemblies. Apart from transferring several key equipments from the existing R&D facility, we have added key lab and testing machines for ABS validation. We also installed an assembly line for 4-wheeler passenger vehicle drum brakes for Tata Motors, which SOP is expected in quarter 1 of FY '27. In addition, we are increasing our 3-wheeler brake volumes from 0.6 million to 0.12 million units per annum. Our new AURIC Shendra plant at Sambhajinagar is a strategic investment for key machine castings for global and Indian 4-wheeler electric vehicle and ICE OEMs as well as for non-auto applications. We are, therefore, equipping this plant with highly sophisticated aluminum casting, machining and finishing process equipments. And in the past, we have -- as mentioned in the past, we have already got orders from marquee U.S. and U.K.-based OEMs, along with Yazaki and Valeo for electric platforms of Mahindra with peak annual business value of INR 388 crores per annum for this plant, where the SOP for both U.K. and the U.S. OEMs will start by quarter 2 of the next financial year with peak sales expected in the financial year '29. At our Chakan die-casting plant, we are growing our business for machined aluminum castings for existing and new programs of Tata Motors and Mahindra. The business won in this financial year for these programs stand at INR 128 crores per annum. We are proactively also ensuring better use of our 4-wheeler casting and machining capacities across our Chakan and Shendra plants to balance these volumes, ensure flexibility and improve the overall sales volume growth. At our 2-wheeler alloy wheel plant in AURIC Bidkin, we have already booked 100% of capacity earlier to the SOP, which started in October 2025, starting for Bajaj Auto alloy wheels. Supplies to Royal Enfield will start in quarter 2 of FY '27 and supplies to Suzuki and Ather are expected to begin by quarter 3 of FY '27, reaching peak order wins sales in quarter 3 FY '27. During quarter 3, our battery pack manufacturing plant near Pune made significant progress with successful completion of assembly line factory acceptance test and installation of key imported equipments. Assembly line installation and trials were taken during this quarter. Comprehensive battery pack validation and electric vehicle safety compliance testing will be concluded during this quarter. Post our OEM and the regulatory approvals, commercial ramp-up activities will be started to support the SOP from end of March 2026 or early April 2026. We will also pursue additional opportunities across 2-wheeler, 3-wheeler and other high potential segments. So all the above 4 greenfield plants, which I mentioned will be fully operational over the next few quarters, and you can feel the -- and we will feel the full impact in the second half of financial year 2027. In the first 9 months of FY '26, our wholly owned subsidiary, Maxwell achieved a record turnover of INR 114 crores as against INR 70 crores in the full year of FY '25. We are now supplying the battery management system for scooters, 3-wheelers, tractors, e-bikes, construction equipment for a European company as well as for telematics. Beyond this, we are also focusing on range of high-voltage battery management system for 4-wheelers, commercial e-trucks and e-buses. At present, 1 in every 12 electric 2-wheelers rolling out of Indian factories run with our Maxwell BMS. Our strong R&D and innovation sale at Maxwell has made significant progress to introduce new product technologies beyond the battery management system, catering to both the EV and internal combustion engine electronic subsystems. We already supply the motor control units, and we have also won our first order for a DC-DC converter. In the first 9 months of FY '26 at Maxwell, we have won INR 45 crores of new business, which has taken the total cumulative orders won to INR 232 crores per annum, which will peak in quarter 4 of the next financial year. The FY '26 orders won for BMS are for 2-wheelers, for e-rickshaws, for e-bikes and for electrical buggies. And our major OEMs are Yatri Electric, [ Carbos ], Ultraviolette and MOTION AUTOMOTIVE. Further, we have a strong pipeline of requests for quotes of INR 197 crores. We maintain our leadership position in inverted front forks with steady growth driven by wider OEM adoption. This year, we commenced supplies of inverted front forks along with the mono shocks to TVS, where the front fork has been upgraded with adjustable features and with both side cartridge systems. The SOP for Hero MotoCorp started in January 2026, while validation is ongoing for a leading Chinese OEM with SOP expected in quarter 3 of FY '27. This takes the total number of our OEM customers using our inverted front forks to 6. Schedules from our overseas customer, KTM have increased. Our total sales of inverted front forks are expected to reach more than 650,000 units in this financial year, and we expect to substantially increase in further years these orders starting from next financial year. Over the past few years, we are seeing customer preference shifting towards higher CC premium vehicles, helping in faster adoption of our premium offerings like inverted front forks, APTC or our assist and slip clutches and our hydraulic brake systems. In the period FY '19 to FY '25, the share of the 75-100 cc vehicles dropped by 19%, while the 110 to 125 cc 2-wheeler category recorded a growth of 14.5%. This clubbed with OEMs offering premium features in lower CC segment has opened huge opportunities for our high-end products. Our aluminum forging business, which started as a backward integration for supplying aluminum forged axle clamps for our inverted front forks is growing consistently. We are adding 1 more aluminum forging press to meet the increasing captive and third-party demands. This new press, along with our 4 existing presses will be housed in a new plant at Waluj, Sambhajinagar. This new plant will come up in quarter 2 of FY '27. As mentioned in the previous call, we have won aggregate orders of INR 44 crores for our aluminum forging business from a German OEM, Jaguar Land Rover, and Royal Enfield. These OEM orders, coupled with our captive requirements is expected to yield an annual business of around INR 44 crores. As discussed in the last call, we have won solar damper business from a Spanish client. Till quarter 3, we have already exported solar dampers worth INR 24 crores from our Pantnagar plant to our clients -- for our Spanish client with requirements in U.S.A. and Saudi Arabia, and the value is expected to double by the end of this financial year. As mentioned in previous calls, we are building a new infrastructure at our Sanand plant in Gujarat to cater to the large volume of orders. The building work is nearly complete, and we expect to start SOP of solar dampers by April 2026. Apart from this business from a Spanish client, we also won business from a U.S.-based client where execution will begin in the middle of the next financial year. The total business won till date for solar dampers and actuators across both the 2 clients stands at INR 250 crores. In quarter 2, we started supplies for our assist and slip clutches to Royal Enfield and Kawasaki, introducing our subsidiary, Adler technology to the Indian market. The SOP for Bajaj Auto is expected in quarter 2 of FY '27. I just spoke to you regarding the vehicle premiumization, which should lead to increased orders for our assist and slip clutches. The assembly line installation and vehicle level validation for our 4-wheeler drive shafts has been completed. The customer PPAP is planned towards the end of this month with SOP expected by March 2026, which is next month. Under the Maharashtra Package Scheme of Incentives 2019 scheme, we have an eligibility certificate of INR 600 crores for a capital expenditure incurred till August 2024 at our Waluj, Sambhajinagar units. In January 2026, we got addendum to this existing certificate. And with this, our package scheme of incentives have increased from INR 606 crores to INR 858 crores by investments up to 31st March 2025. These incentives will be availed through the Industrial Promotion Subsidy by way of state GST refund and electricity duty exemption broadly over a 7-year period. Let me now give you a gist of orders won during the first 9 months of this financial year. Please note that the business value from new orders are without including new orders from Bajaj Auto. The overall order win in the first 9 months of FY '26 in India business was INR 1,282.8 crores per annum, of which INR 1,265.5 crores is new business. This includes a new business win of INR 300 crores for our battery packs at our Talegaon, Pune plant and INR 45 crores per annum new order for battery management systems at Maxwell. Our 4-wheeler and non-automotive business win in the first 9 months of this financial year stands at INR 530 crores. These wins include orders from Tata Motors, a large U.S.A. EV OEM, Hyundai, Kia, Isuzu, which is a new customer, Mahindra, and the 2 clients in the solar space. So you can see our volume product mix is improving. During quarter 3 alone, we won INR 354 crores of new business, of which INR 163 crores was in the 4-wheeler and nonautomotive space. These customers included Tata Motors, Mahindra, Kia and Isuzu for 4-wheeler castings, Hero MotoCorp for 2-wheeler suspension and the U.S. solar OEM. We aim to supply all our product offerings to all major 2-wheeler OEMs. In the case of Suzuki, we are a significant supplier of suspensions. And during the quarter, we further strengthened our business with them by securing a new order for alloy wheels with an annual revenue of INR 57 crores for our AURIC Bidkin plant. Similarly, with Hero MotoCorp, we have been a prominent supplier of suspension and castings with brakes added early last year. During quarter 3, we added 5 new brake platforms from HMCL totaling INR 58 crores, taking the overall Hero MotoCorp brakes business to INR 200 crores per annum. With this, we are now supplying a full bouquet of products to Hero MotoCorp, including the battery management system, aluminum forgings. With this increased business, we have a line of sight to double our sales to Hero MotoCorp over the next 2 years. The cumulative India business orders for electric vehicles in the conventional product areas stand at INR 1,058.7 crores without Bajaj Auto. This reaches INR 1,241.5 crores per annum of orders if we include Bajaj Auto. And the total electric vehicle business win is INR 1,636.5 crores if we add Maxwell and the battery pack products business. Our sales for electric vehicle 2, 3 and 4-wheelers in the first 9 months of FY '26 grew 65.6% to INR 287 crores as compared to INR 174 crores in quarter 3 of FY '25. Our CAGR growth in the last 4 years has been 71% as compared to EV 2-wheeler industry growth -- CAGR growth of 21% as per the Vahan data. This growth in our sales is across all our product segments of suspension, casting, braking and alloy wheels. The overall total orders won now in products other than energy and electronic areas, which is your Maxwell as well as the battery pack since FY '22 stands at INR 5,021 crores, out of which INR 4,291 crores is new business. We have a total of INR 4,200 crores worth of requests for quotes also in hand. We expect to win more than INR 1,500 crores of business in the next 12 to 18 months. In Europe, the industry continues to operate in a challenging environment, shaped by semiconductor shortages, the energy crisis, geopolitical tensions, inflation, high interest rates, duties imposed by U.S.A., increased competition from Chinese OEMs and muted automotive market growth. In spite of this backdrop, our European operations have continued to sustain profitable growth through both the existing business as well as through M&A. Our acquisition of Stoferle was completed in April 2025, adding around EUR 80 million of profitable sales to our top line. In our Europe business, we have booked orders worth EUR 15 million during the first 9 months of FY '26. This includes large machine castings orders from Volkswagen and Porsche and certain plastic injection molding parts for EVs. Our aftermarket business in India is a strategic priority for us. We have set ambitious growth goals till 2030. We have made a comprehensive long-term capability focused blueprint, incorporating the voice of our team and channel partners, retailers and mechanics. We are focusing on building long-term partnerships with distributors who have the right mindset and are aligned to Endurance's vision. In addition, we are driving secondary demand generation with retailers as well as mechanics for the domestic business. We have launched a mechanic loyalty program, conducting trainings with certifications on BS-IV to BS-VI, electric vehicles and product fitment, organizing health camps and also providing scholarships to children of our top mechanics. We are the first in the industry to deploy AI or artificial intelligence-enabled tech platform to drive the secondary order booking. We have understood the voice of our stakeholders in each country we are present in and have created a unique value proposition for them. Our customized offerings provide us a competitive edge in each geography. We're also driving a holistic program to build capability of our sales team and to empower them with the right tools and skills to bring strong business leaders. Coming to our financial performance, the information has been uploaded at the stock exchanges last evening, along with our presentation explaining the numbers. I will, however, highlight some key numbers. During quarter 2 FY '26, the company recorded a stand-alone total income of INR 2,678.3 crores, a year-on-year growth of 22.2% from INR 2,191.6 crores in the previous year. The EBITDA grew 18% from INR 287.3 crores to INR 339.1 crores with a margin at 12.7%. The PAT grew 8.8% from INR 156.9 crores to INR 170.7 crores. During quarter 3 of FY '26, we booked an exceptional cost of INR 20.6 crores towards assist impact of the new labor codes, and this impacted our PAT by INR 15 crores. The EBITDA margin drop of 0.4% on total income is largely contributed by raw material cost increases led by aluminum alloy, which forms 55% of our total raw materials purchases. In quarter 3 FY '26, our consolidated total income grew 26.5% over quarter 3 of last year from INR 2,881.1 crores to INR 3,645.6 crores. The EBITDA grew 30.4% from INR 394.5 crores to INR 514.5 crores. Our margin was at 14.1%. The consolidated PAT after the impact of the new labor codes on the Indian operations grew 20.2% from INR 184.4 crores to INR 221.6 crores at 6.1% PAT margin. In India, we are extremely focused on improving our profit margin percentage by focusing on manufacturing in-house versus outsourcing to our vendor partners where we cost to be higher with our vendor partners, price increases to OEMs where costs have increased mainly due to power and manpower costs; and thirdly, taking largely new business with better profit margins, thereby improving the product mix. We are highly focused on this now. As the company diversifies and scales, our people agenda remains integral to execution. We continue to strengthen workforce planning and talent depth, particularly at the mid-management level and a senior leadership team reviews the key capability and performance priorities through structural forums. Digitization and artificial intelligence tools in HR processes are improving our efficiency and ease of business. We are also investing in future-ready skills through programs such as LEGS, which is a customized learn and earn platform to upskill our blue-collar workforce and create a structured growth pathway, along with multiple leadership and talent platforms across levels. Inclusion remains an important focus area with tangible progress in gender representation and engagement with diverse talent. On the sustainability front, we made significant progress this year towards our ambitious goals for FY '30. We achieved a 49.6% carbon-neutral percentage. We lowered specific electric and thermal energy as well as specific water consumption. Water and hazardous waste recycling both stand at 98% each, while 14 of our sites have been certified as zero waste to landfill. Our renewable power share has increased from 25% in FY '25 to 28% now. We've also contributed around 400,000 kl or kiloliters of water through water augmentation projects. Our ESG ratings have also seen improvement. CRISIL has revised our ESG score to 59 for FY '25, which is up from 56 in FY '24, while another agency, SES, has increased our rating to 74, which is up from 68% in the previous year. Our K120 Waluj, Sambhaji suspension plant has been awarded the prestigious CII GreenCo Gold rating this year. At Endurance, we approach our CSR with the objective of strengthening communities and improving individual life outcomes. Our focus is in bringing down disparities in education, livelihoods and health while enabling access, dignity and opportunity. The aim is to create sustainable improvements that continue to benefit communities over time rather than short term. Our CSR initiatives continued across education, livelihoods, environment and health care. We launched a new course in the hospitality trade at ECoVE, which is our vocational training center in Chhatrapati, Sambhajinagar to improve employment opportunities for youth. We initiated a dense forest project over 10 acres in the Gadana Village at Sambhajinagar. We supported farmers with high-quality seeds and [indiscernible] to strengthen rural education infrastructure. We are refurbishing schools with toilets, libraries and RO plants. In sanitation and water management, 75 household toilets and 119 soak pits were constructed across 3 villages. Through the WOW bus program, 108 students were trained in basic computer skills. Our mobile veterinary van treated 1,173 cattle and our mobile medical program treated 1,350 patients, including specialized eye and gynecology camps. I'm happy to inform you that we have won the Quality Excellence Award from Tata Motors at the annual supply conference in September 2025. I'm also happy to inform you that in October this year, Endurance Overseas plant supplying to Stellantis Group was recognized as a top supplier in the Global Supply Awards 2025. In January 2026, our K120 suspension plant at Sambhajinagar won the Platinum Certificate of Merit at the Frost & Sullivan India Manufacturing Excellence Awards 2025 and our driveline plant also at Sambhajinagar won the Gold Certificate of Merit at the same platform. Now with these opening remarks, I would now like to invite questions from all of you. Thank you.

The first question is from the line of Aditya from Investec.

Congrats on good set of numbers, especially delivery on margins. First question is on ABS. So did I hear it correctly that you mentioned that you expect to have some clarity by end of this quarter?

Yes.

Okay. Okay. Second, just a little bit if you can explain that if ABS comes through, clearly the path is very clear. However, if there is a situation where we move to electronics CBS, what is the opportunity for Endurance in that situation?

Yes. So here, what is happening is that if ABS comes, like I mentioned, it will be for 120 cc and below, up to 50 cc vehicles. I believe there is a testing ongoing at ARIA, which I get from sources. I'm not 100% sure. But I'm definitely told by a customer that we hope to get some clarity on the final guideline by end of March. So let's hope that happens. Now in case they go for a CBS, which is not electronic, it is a mechanical CBS. What happens is all the vehicles who are on drum brakes will graduate to our hydraulic braking system, which consists of a master cylinder, caliper and a brake disc. Now if this happens also, it's a huge increase in business because the value of a brake assembly of these 3 parts is even -- in value is even higher than an ABS price. So we gain both ways. But of course, if the ABS does come in, the gain is much higher because the value goes higher.

Okay. Okay. That's good to know. Second question is that if you can break up the growth in Europe between Stoferle and Endurance, you talked about EUR 80 million on an annualized basis. But in this quarter, what has been the growth of our European operation, excluding Stoferle?

Yes. So I will request Mr. Massimo Venuti, Director and CEO for Europe, to answer this.

Okay. So Endurance overseas in Europe closed the quarter with EUR 93 million turnover compared to EUR 76.8 million of the previous financial year with an increase of 21%, of which Stoferle was EUR 20 million. EBITDA, EUR 16.8 million, it means 18% compared EUR 12.4 million of the previous financial year, 16.2%, with an increase of EUR 4.3 million, it means 34.9% compared to the previous year. In terms of net result, we closed with EUR 4.9 million, it means 5.3% compared EUR 3.8 million of the previous financial year, 5%, with an increase in terms of net profit of EUR 1.1 million, 28.5%. If I don't consider Stoferle, we have had a reduction of turnover of 2%, but due to a reduction of tooling because if I compare the production compared to the previous financial year, also without Stoferle, the European operations grew 5.1% compared to the previous year with more or less all the customers, Stellantis, Mercedes and Volkswagen Group.

That's helpful, Massimo. So excluding Stoferle, the growth would be about 6% to 7% and Stoferle declined 2% because of tooling, right?

Yes. Yes, this is -- we grew 5.1% if I consider the quarter. And if you want, I can give you also an idea about the 9 months. In terms of year-to-date, the company grew 27.2%. If I consider only part 33.6% and without Stoferle 5.1%.

Sure. The next question is on CapEx. So last couple of years we have seen that there has been a modest increase in CapEx from about INR 800 crores to about INR 1,000 crores. So this year, if you can give a sense that what is the CapEx that we will end up considering 4 to 5 big plants are coming on stream? And directionally, how should we think about CapEx for the next couple of years?

So if you see FY '26, I mean, we have been investing last 3 years, average CapEx of INR 400 crores. Of course, the previous year was about INR 600 crores in FY '25, where the new plants already the CapEx had started. We had bought 2 lands, one in AURIC Bidkin Shendra and in Chennai where the braking system plant is coming in. This year, we will be slightly less than INR 800 crores, largely because of these 4 new facilities plus expansions which we are doing in brakes, this thing also. So going forward now, what our plan is very clear. Our investments will be on profitable growth products mainly to retain business, if I have to do products which are at existing margins, I may do it. But going forward, and that's why I specifically mentioned in my opening remarks that INR 530 crores of that INR 930 crores, more than two-thirds business is on 4-wheeler castings and on solar dampers, which are much higher-margin businesses. And this is the way we are going. So the CapEx will be mainly on such businesses. We are making a plan for this towards -- in the next week we'll be more clear on the CapEx plan for next year. And of course, our focus will be more on automation for better consistency and quality and lowering contract labor, which is there. So on CapEx, I would say it will be more on automation, on environmental health and safety or some statutory compliances, on improvement of quality or it will be on profitable growth expansions or new plants.

Yes. So just to repeat my question. Now the CapEx, when you look at it, India and Europe separately, is it fair to assume that the CapEx in India would be in the tune of about INR 800 crores and roughly about, say, INR 700 crores in Europe for '26 because of Stoferle acquisition and total about INR 1,500 crores for '26. And as we progress into '27, if the -- can you confirm that the CapEx intensity of about INR 800 crores would continue in India for the next couple of years or it would increase?

No. According to me, we are going to split our assets. We are going to make sure -- because see, if you see the impact on ROCE because in India, the customers don't give you any take-or-pay contracts. There are high risk on volumes and high risk on uncertainties. So though we are going to in-house some of the high-cost outsourced components, but definitely, there are certain components where we may use a balance about outsourcing and doing it in-house and controlling CapEx, okay, unless there is I mean, M&A, which we are already, I mean, in process with. But according to me, in India, the CapEx will be controlled much below this figure of INR 800 crores, okay? And this is our focus. And I cannot speak from FY '28 onwards. I can say FY '27 is what we are seeing right now in India. As far as Europe is concerned, I think I'll let Massimo give you the answer.

Okay. Speaking about Europe, for sure, we spent EUR 38 million to buy 60% share of Stoferle. And for the ongoing business and new investment, we spent more or less EUR 36 million. The expectation for next financial year is to stabilize the total investment with more or less EUR 25 million, EUR 30 million. This is the expectation for this financial year. But I want to underline that despite the acquisition of Stoferle in the 1st of April 2025, we continue to be cash free. And it means that we closed the previous financial year with more or less EUR 20 million. At the end of December, we reached EUR 30 million despite the acquisition of Stoferle and also the normal investment. And so it means that the cash profit is growing 3%, 4% compared to the previous financial year, reached 17% in this financial year.

The next question is from the line of Mumuksh Mandlesha from Anand Rathi Institutional Equities.

Congrats on the good results. Sir, firstly, I just want to clarify on the previous participant question on the ABS part. So you mentioned in case the ABS doesn't come, what could be the alternate option, sir?

So what happens is that electronic ABS has to have a hydraulic brake system. I've not seen it working with a mechanical brake system or a drum brake system. So the opportunity which is there for us that even if a combined braking system comes, instead of a drum brake system, they will need to use a master cylinder caliper and a disc brake system rather than a drum brake system. This is what is our major brakes business apart from ABS. So this definitely will be an opportunity for us to expand further, which will be in the bracket of 125 cc vehicles and below.

Got it. Any broad what kind of content would be there for this, sir, hydraulic break, sir? Content value, sir.

See, I can only say it will be higher than ABS because I cannot give you numbers. But let me tell you that is higher than ABS.

Got it, sir. Sir, on the 4-wheeler suspension, I just want to understand any update how things are working with the Korean OEMs and Korean partners, sir.

Sorry, I didn't hear that question. Sorry, repeat, please.

Yes, on the 4-wheeler suspension area, I just want to know what are the updates there, sir, how are we seeing the traction with the Korean OEMs considering our relationship with the Korean partner there, sir?

Yes. I will request Mr. Rajendra Abhange, Director and CEO for India to reply to this.

Yes. So thank you for the question. As you know, it's been a while that we have joined hands with this Korean party to supply us the technology to cater to our customers in India. And from the time we have moved on to work on 3 proof-of-concept projects with different customers in India. So one project is -- has almost come to a situation where customers will have to give us his opinion on the superiority of the technology that we are offering. This should happen in this quarter. The job is already done. And there are 2 projects in the pipeline, which are still going on, of which one we are doing by our own and the second one we are going to do with -- again, with this Korean party. So the things are advancing well. It's a high technology product line. So our customers will be very careful, and we have to meet the requirements better than what the current suppliers are doing. So that's the current state. But the good part is the progress is very good.

Got it. And sir, it would be -- is it -- will it be a passive area or will be something like passive plus or semi-active area, sir?

All passive.

All passive. Got it. Sir, I wanted to come on the AURIC plant order book there, sir. I just want to understand any reason for the change in SOP date.

Yes. So I think there has been a delay, mainly from the U.K.-based this thing OEM. That was an SOP, which was to start in this quarter actually. And there has been a delay of this OEM. And now they will be starting in the second quarter only. In fact, we have the schedules. And the U.S.-based OEM should start by the end of quarter 1. So that is the line of sight we have. But in the meantime, we are also going to start orders for other customers like Valeo, for example. And so I think the plant will start from April. But these 2 large OEM customers will come in end of quarter 1 and quarter 2. So the U.S.-based was always end of quarter 1. It was this U.K.-based OEM where there's a delay of 2 quarters.

Understood. And the order book remains similar in terms of what earlier mentioned around INR 230 crores, right, sir?

You're talking about total business won?

Yes, total, yes, business won, order book, sir.

So it is INR 388 crores per annum. With the peak value I said was FY '29. But as we speak, we are also getting new business from this quarter onwards also, so which we will report in the May this time meeting.

Understood. And finally, sir, I just want to understand on the -- we have this others in our segmental breakup, which has been growing about more than 2x in the last 9 months. Just want to understand what are the key products that are driving the growth, sir.

So all the other products which are not included in -- in our 2-wheeler, 3-wheelers, 4-wheelers, which is not included there, we are right now grouping them in others. And as and when they become bigger, we'll start grouping separately. For instance, even if the solar suspension panels and all the other businesses which we are getting, we group it within that.

The next question is from the line of [ Jishnu ] from LFC Securities.

So I wanted to ask a specific question related to the Europe India deal. So what is the specific advantage that we'll be getting that was not in our sight just before the deal was signed. And now since the deal has been signed, what are the new advantages that specifically Endurance would be getting since it has a huge exposure to the Europe business and specifically it would have in terms of Indian auto and companies, we have the largest exposure. So what are the advantages that we'll get specifically from this deal, which was not expected before the deal?

So I think what I would like to say is we are at a stage where we are still trying to gather more information. And earlier for us taking a call on what is the strategy we have to adopt for the future. This is -- but we are not -- I mean, though we have the guidelines and rules, but we are going to the specifics because I believe this agreement will be only effective within the next 9 months to a year, though it has been signed. So I think as this has just happened there, in fact, both the sides our European and our team are planning to meet and we will -- so maybe we can throw some more light in the next quarter call in case we are ready.

Okay. So that was it. But are we having any advantage right now since our plants are located in Europe. So are we having any specific advantages right now in Europe, like we would already have zero duty access before the deal, right, since our plants there in the Europe?

I think it was how much was it 2.5%?

See, because we were producing local for local in Europe and also in India there was no cross-border transactions as of now. But we are studying the overall deal to see what we can do going forward.

The next question is from the line of Pramod Amthe from InCred Capital.

So if I have to look at your Slide 9 with regard to Europe order inflow, it seems to be dwindling down for the last couple of years. And I think in spite of German acquisition, it's pretty low for the 9-month period. What is really happening there? Is it an end-market situation or you are evaluating your own strategies to get new orders?

Yes. So we are evaluating our own strategy, especially on the M&A front. But I think let's let Massimo answer that. Massimo?

Yes, in the previous quarter -- in the 9 months of this financial year, we acquired only EUR 50 million business. This is true compared to EUR 40 million of the previous financial year. But please consider that in this moment, the market is in a very bad situation. As probably you know, in December 2025, the European Commission proposed to review the 2035 rules, not yet finalized, suggesting a potential shift from 100% to 90% of emission reduction target, allowing some residual emission to be offset through measures like green steel production or biofuel. And the market, as you can imagine, the reaction was not so positive. Now apparently in the second week of March, there will be the official position of the European government, and we will see. But in this moment, everybody stopped the important weight investment in the internal combustion engine and also in the electric. This is the reason why in this moment we are not acquiring business, but let me say, this is explanation of the market, unfortunately. On top of this, please consider that even if you see the registration that is growing compared to the previous year, the previous quarter, we closed with 4% of increase compared to the previous year in Europe and the year-to-date is more or less 3%. You have to consider also that the mix of this registration are completely different compared to the past because only to give you an idea, in the calendar year 2025, we have had an increase of import from China and from the rest of the world of 200,000 cars. And we lost 200,000 cars of production in terms of export. And 4% of reduction, if I consider more or less 10 million vehicles per year. The situation in Europe is very difficult in this moment. But despite this situation, we have been able to close 4.2% without considering the acquisition of Stoferle. And the trend for the future months is more or less aligned compared to the previous quarter. And so we are optimistic even if the situation is very tough.

Sure. And related to the same, again, looking at the M&As which you have done and turnaround in Maxwell and also the German acquisition going smooth. How are you approaching -- are you more confident now to do larger-sized deals? Or how is your M&A strategy going to pan out for next 3, 4 years?

See, the -- firstly is that the M&A strategy will be mainly in areas, for example, our existing areas going into -- like we have done, for example, solar business, for example, it is suspension but going into solar, so non-auto applications. It could be castings in other than automotive. So basically, it will be -- our strategy will be in those segments where the margins are much higher and also which has a good target market. It's very important we enter our new areas where there is a target market. So question is we are already working on a deal right now, and we'll see how that goes. And so we are always looking for M&A opportunities. But of course, we will be aggressively going ahead with it, but we'll only do it if it makes sense to our business. But I just gave you these examples that definitely high on our minds is not only automotive, but also non-automotive applications, which will be partly in our products like suspension or casting or it could be something else.

The next question is from the line of Rajit Aggarwal from Nilgiri Investment Managers.

Just a quick clarification on the CapEx plans. There are 2 new CapEx which have been mentioned in the slide. One is the Sanand expansion and there is another one of aluminum forging at AURIC Bidkin. And both are going to be commissioned in Q1 and Q2. So what is the total CapEx on these 2 expansions?

He's asking the CapEx for the aluminum forging.

For solar dampers and actuators.

And the Dampers, I don't have the figures...

It is around INR 25 crores or in that range because these are existing plant.

About INR 25 crores each. I don't know the figure, but I mean our treasury head. Okay. To be honest, it's not correct to give you any wrong figures. We don't have the figures right now. And we don't want to give you what is lower or higher. But these are not very high CapEx. These will be both below INR 50 crores each. Both will be below INR 50 crores.

Understood. And just following up from a previous participant's question on the order wins in Europe, and congratulations for being able to sustaining the growth despite the environment being so high. But going forward, let's say, 1 year or 2 years, if there is no inorganic expansion, I mean, do you see the growth rate coming down? Or do you see a chance of a degrowth in Europe business?

See, we don't like to think on those lines. We only think of growth. So we -- of course, we have to see the downside, but there have been many downsides since 2008 also, as you know. The global financial crisis. We have faced it, we have grown. So we will find our solutions because we believe in Endurance to find solutions being positive and going this thing ahead. Because if you think in those lines, then you won't ever grow, you know what I'm saying. So our thinking is a very -- because we have really been -- we have faced some very tough times since 2008. So when we reach there, we will face it, and we'll do something about it.

The next question is from the line of Mihir from Equirus.

Sir, just one thing on the previous participant question on order book [indiscernible]. So you don't mention Stoferle wins prior to FY '26. So what would be that quantum? Would it be something which would be good in terms of numbers or that is something which is negligible?

Your voice is a bit...

And actually, we couldn't understand the first part of the question because your voice is not very clear.

So sir, my question was basically on the Stoferle business wins prior to FY '26, which we are not mentioning into our order book status. So what would be that quantum? Or is it something which is negligible?

No. So Stoferle was not included in FY '25 because we only did -- we only acquired the company and we consolidated into our books only from April '25. That's why it's only showing up in FY '26. We did not have Stoferle earlier to April '25.

Yes, sir. But what would be the order book there as well? There would be some order book, right, which would be...

You're saying order book of Stoferle you're saying?

Yes, yes.

So Massimo, can you answer?

Yes. I can answer. Yes, starting from front. Considering that more or less the total turnover of Stoferle is EUR 75 million, EUR 80 million total financial year. In this financial year, we acquired EUR 5 million with the final customer, BMW, Steyr Magna. And please consider that in this moment, Stoferle has the stability of volume more or less till 2030, 2032. And so in this moment, I don't see any kind of issue. And the company is really profitable and demonstrate -- now we can say that we integrate 100% of the company in our organization, and we are trying to do a lot of economy of scale because, as you know, Stoferle is buying raw part from the market, but we have the opportunity also to produce raw part for them in our foundry. And this is the second step of the integration that will start in the next financial year.

Okay. Okay. And the second question on the Europe front, there are many Chinese OEMs now are putting up plants in Europe now. So how are we engaging with those customers there and some kind of thoughts on approaching the Chinese OEMs now?

Yes, this is true. We are discussing with some of these OEMs, but I repeat, in my opinion, we need to wait a clear position about the strategy from the European government because these guys are coming here, they are opening new plant, but they want to assembly the car. And so we need to understand if they will import the component, the powertrain component and also the battery case component and will assembly here or in order to avoid and to reduce the tariff, they will be obliged to produce here. In this moment, as you know, we are discussing, as I told you in the previous call conference, with BYD. He will start at the end of this financial year in Hungary and in the next financial year in Turkey, but only assembling the car. So for our product range in this moment, there are no benefits even if for sure we are quoting different scenario because if they will be obliged to produce this part here in Europe could be an opportunity for us. But I want to say one thing also regarding the previous question regarding the agreement between India and Europe. This could be, from my point of view, a big opportunity for us, for Endurance Group. Because as you can imagine in this moment, we are receiving a lot of attack from the Chinese supplier because they are coming in Europe also in the supply chain. And the possibility to buy and to move production capacity and to acquire new business with a level of competitiveness that our competitor have here in Europe using our production capacity in Europe for me is a positive and is an opportunity in front of our customers. Our footprint, our industrial footprint in India is a big opportunity, not for sure for the continuous growth of 4-wheeler in India, but also for Europe. I'm pretty sure about this.

I just wanted to clear one point to, I mean, everybody on the call. When I talked about ABS and the brake systems pricing, I had considered some other items, and I took mainly for bikes of higher CC. So I think the pricing would be quite similar because there would be no stainless steel braided hoses and some other items which are there in the higher-end bikes. So I would say the prices of the brake system would be similar in some cases or even slightly lower. So I just want to clear my statement where I said earlier, they would be higher than ABS, the master cylinder, caliper and brake disk. So please make a note of that. It may be same a bit lower.

As there are no further questions from the participants, I now hand the conference over to the management for the closing comments.

Yes. So in fact, I've already, I think, mentioned my points in my opening remarks and in the question and answer. I will just say that we at Endurance, both in India and Europe, are fully focused on profitable growth and trying to improve both sales growth as well as our margins. So we'll continue to focus on that. In spite of challenging conditions, I would say, in Europe mainly, but we'll try and take whatever -- I mean, opportunities we get and make the best out of them. So thank you for all your support, and see you in the next call -- meet you in the next call.

Thank you very much, sir. On behalf of Axis Capital Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.