Varroc Engineering Registers A Growth Of 15.3% On YoY Basis

Varroc Engineering today announced its results for the quarter ended 31 Dec 2022. EBITDA margin was at 7.8 per cent and it improved on YoY basis by 140 bps due to improvement in overseas performance. Sequentially, the EBITDA margin has fallen due to lower revenue from operations. The reported PAT for the quarter was Rs. 218 million.

Tarang Jain, CMD commented, “In India, automobile production for all the segments grew on YoY basis due to easing of semiconductor issues and improved economic activity. However, 2W saw tepid growth as the lower end of the segment has not picked up and geo-political issues impacted exports. YoY, 2W production grew only by merely 0.5 per cent, 3W by 13.3 per cent, PV by 21.4 per cent and CV by 12.0 per cent on YoY basis. On QoQ basis the production for all the segments fell because of the early festive season and reduction of inventory at the channel partners. In terms of our operations, our revenue from operations grew by 15.3 per cent to Rs 17,228 million on YoY basis." 

Varroc Engineering continue to have strong order wins for new business in 9M FY23 across business units enabling our future growth in India. During 9M FY23, lifetime revenue from new order wins is Rs 35,653 million. Out of this, business wins from 5 prominent EV customers is Rs 8,917 million. The order books also reflect our effort to diversify as we see nearly 48 per cent of lifetime order win from 4W and 52 per cent from 2&3 wheeler. Diversification can also be seen in order book from customer perspective with only 19 per cent from the largest customer. 

As stated profitable business wins, improving contribution margin, sweating of assets, net working capital improvement, commercialisation of R&D efforts, control on costs, growing free cash flow, debt reduction and prudent capital allocation remain the focus of the company.