Endurance Tech takes a U-turn

The auto components company withdrew plans to start the proposed tyre manufacturing business. Reacting to this development, the stock recovered more than 10 per cent from 52-week low on Friday.

On Thursday, Endurance Technologies reported its June quarter results in which announced a proposed venture into manufacturing tyres for two and three wheelers. The company's results filing stated that the board has approved acquisition of approximately 40 acre land in Aurangabad Industrial City (AURIC), Maharashtra. The investment for this project was slated as Rs. 1,750 million, which includes land and building cost, said the company. The management believes that expansion into tyre manufacturing complements the company's existing business and has the potential to deliver sustainable profitability. Reacting to the announcement, the stock was dumped by market participants and dip to 20 per cent lower circuit limit and its 52 week low at Rs. 743.05 per share, on Thursday.

However, on Friday, the company intimated the exchanges that the management has reconsidered the new business foray and decided not to pursue the same in light of concerns raised by investor, during the company's results conference call.

Meanwhile, for Q1FY20, the company posted consolidated revenue at Rs. 1,909.17 crore as against Rs. 1,860.43 crore in Q1FY19, up by 2.61 per cent. Net profit was at Rs. 165.58 crore, as against Rs. 124.58 crore in Q1FY19, up by 32.91 per cent.

Following this intimation, the stock of Endurance Technologies was up more than 10 per cent on Friday. At 9:32 hours, the stock was at Rs. 821.65 per share, up by Rs. 78.60 or 10.58 per cent on BSE.