180% return in 18 months of IPO: Buy this large-cap auto ancillary stock and gain up to 21%

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Published: April 11, 2018 1:45:03 PM

The automobile sector benchmark index Nifty Auto had grown 11-12% in last 18 months. We bring to you a large-cap auto ancillary stock which had risen about 180% in 18 months of its IPO to buy and gain up to 21% on your investment.

Photo for representational purposes only. (Image: Reuters)

Indian equity markets have grown speedily in the last 18 months except for the downturn observed since the beginning of February 2018 as investors optimism took a dive on the back of several global and domestic factors. If we look at the performance of Indian stock markets in the last 18 months, the key equity indices Sensex and Nifty have risen around 21 to 22% while the automobile sector benchmark index Nifty Auto had grown 11-12% in the same period under review. Interestingly, some blue-chip automobile shares have vastly outperformed the aforementioned benchmark indicators in the meantime such as Maruti Suzuki (India) and TVS Motor Company has an 18-month return of 63% and 61% respectively.

We bring to you a large-cap auto ancillary stock which had risen about 180% in 18 months of its IPO to buy and gain up to 21% on your investment.

Shares of Endurance Technologies Ltd have grown about 180% from the issue price in just 18 months after the auto part maker launched the IPO (initial public offering). The stock of Endurance Technologies Ltd had gained 181% to Rs 1,330 from the issue price of Rs 472. Endurance Technologies shares jumped as high as 39% after receiving a good response by institutional investors during the three-day initial share sale. The IPO of Endurance Technologies was subscribed around 44 times led by a heavy bidding by institutional buyers and HNIs (High Net-worth Individuals).

The research and brokerage firm Motilal Oswal Securities Ltd had given a buy rating to the stock of Endurance Technologies with a potential upside of 21% to a target price of Rs 1,531 from the recommendation price of Rs 1,263. “We expect 21.2% YoY growth (5.8% QoQ) in consolidated revenue to Rs 16.7 billion, led by strong performance in domestic as well as exports segments,” Motilal Oswal Securities said in a research report. The stock trades at 33x FY19E EPS and 24.8x FY20 EPS, Motilal Oswal Securities said.

Endurance Technologies Ltd shares are categorised under the ‘B’ group of equity shares. Endurance Technologies Ltd commands a market capitalisation of Rs 18,360 crore at the share price of Rs 1,305.15 on BSE. Endurance Technologies designs and manufactures automotive components such as aluminium die casting, suspension, transmission, brake systems.

Disclaimer: Views and recommendations given in this section are the brokerage firms’ own and do not represent those of www.financialexpress.com. Please consult your financial adviser before taking any position in the stock/s mentioned.

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