According to reports from NDTV Profit, Citi Research has revealed its preference for Endurance Technologies over traditional two-wheeler manufacturers in the current market environment. Arvind Sharma, Director of India Autos & Transportation Research at Citi Research, stated during the Q1 FY27 Earnings Roundtable that the brokerage sees Endurance as a better play in the two-wheeler space. Sharma explained that the ancillary company supplies to literally every two-wheeler maker in India, providing a more diversified exposure to the segment's growth without the competitive pressures facing manufacturers. When specifically asked about Bajaj Auto and TVS Motor given their recent performance, Sharma emphasized that for two-wheelers, we would prefer an ancillary like Endurance, as reported by NDTV Profit.
As reported by NDTV Profit, Sharma highlighted significant competitive pressures in the two-wheeler segment, describing the competition as 'very, very high'. This intense competition is affecting companies' pricing ability, with valuations in the sector 'not really very attractive'. The brokerage's preference for Endurance Technologies reflects its view that the ancillary offers a better way to participate in two-wheeler growth while avoiding some of the competitive and valuation pressures facing the manufacturers directly.
According to NDTV Profit, Citi's preference for Endurance Technologies comes despite maintaining a constructive stance on autos overall. Sharma noted that auto companies have managed commodity cost challenges well, and the brokerage continues to favour domestic-oriented market leaders. The brokerage's broader auto pecking order is Maruti Suzuki, Eicher Motors and Mahindra & Mahindra, in that order, with these companies being market leaders in specific segments and seeing strong volume growth. Sharma emphasized that the three are market leaders in specific segments and are seeing strong volume growth, as reported by NDTV Profit.
As reported by NDTV Profit, Sharma pointed to strong recent demand trends in the auto sector. He indicated that two-wheeler and tractor numbers have been 'extremely strong' and much stronger than Citi had anticipated. Rural demand has also been encouraging, although he cautioned that monsoon conditions could still have an impact on future performance. The strong demand trends across multiple segments support Citi's constructive outlook on the auto sector despite the competitive challenges in the two-wheeler segment.
