Varroc Engineering Ltd
NSE:VARROC
Varroc Engineering Ltd
In the bustling ecosystem of the global automotive industry, Varroc Engineering Ltd. has carved out a notable position as a dynamic player specializing in automotive components. Founded in 1990 by the industrious Tarang Jain, the company started as a modest manufacturer of plastic moldings. Over the decades, Varroc metamorphosed into a prominent entity in the automotive supply chain, diversifying its offerings to a comprehensive portfolio that includes lighting systems, electrical components, powertrain products, and a range of body and chassis parts. With its headquarters nestled in Aurangabad, India, the company rapidly scaled its operations, extending its footprint across 36 manufacturing facilities in multiple countries, establishing itself as a globally recognized supplier, especially dominant in the two-wheeler segment.
Varroc Engineering Ltd.'s growth trajectory is fueled by its strategic focus on innovation and robust customer relationships. By leveraging technological advancements, it seamlessly integrates smart lighting solutions and electronics into its platforms, catering to the ever-evolving demands of automakers pursuing efficient and sustainable vehicle models. The company capitalizes on its strong partnerships with original equipment manufacturers (OEMs), ensuring a steady revenue stream by supplying a diversified range of components. Additionally, its efforts in research and development drive cost efficiency and product differentiation, allowing it to maintain competitive pricing while meeting the stringent quality standards of the automotive giants it serves. Through this strategic amalgamation of innovation, global reach, and customer-centric focus, Varroc Engineering Ltd. sustains its momentum in the fast-paced domain of automotive component supply.
In the bustling ecosystem of the global automotive industry, Varroc Engineering Ltd. has carved out a notable position as a dynamic player specializing in automotive components. Founded in 1990 by the industrious Tarang Jain, the company started as a modest manufacturer of plastic moldings. Over the decades, Varroc metamorphosed into a prominent entity in the automotive supply chain, diversifying its offerings to a comprehensive portfolio that includes lighting systems, electrical components, powertrain products, and a range of body and chassis parts. With its headquarters nestled in Aurangabad, India, the company rapidly scaled its operations, extending its footprint across 36 manufacturing facilities in multiple countries, establishing itself as a globally recognized supplier, especially dominant in the two-wheeler segment.
Varroc Engineering Ltd.'s growth trajectory is fueled by its strategic focus on innovation and robust customer relationships. By leveraging technological advancements, it seamlessly integrates smart lighting solutions and electronics into its platforms, catering to the ever-evolving demands of automakers pursuing efficient and sustainable vehicle models. The company capitalizes on its strong partnerships with original equipment manufacturers (OEMs), ensuring a steady revenue stream by supplying a diversified range of components. Additionally, its efforts in research and development drive cost efficiency and product differentiation, allowing it to maintain competitive pricing while meeting the stringent quality standards of the automotive giants it serves. Through this strategic amalgamation of innovation, global reach, and customer-centric focus, Varroc Engineering Ltd. sustains its momentum in the fast-paced domain of automotive component supply.
Revenue Growth: Consolidated revenue grew 10.2% year-on-year to INR 22.9 billion, with India operations up 12.3% and strong momentum in EV segments.
EV Momentum: Revenue from EV models jumped 53% YoY in Q3, making up 14.3% of total revenue compared to 10–11% previously.
Profitability: EBITDA margin was 9.3%, slightly up from 9.2% last year; PBT margin rose to 4.4% from 3.2%, driven by cost controls and operating leverage in India.
Exceptional Costs: Onetime VRS expense of INR 799 million and labor code-related charges increased net debt, but VRS savings are expected to pay back in 4 years.
Order Wins: Company achieved record new order wins in 9 months with annualized revenue potential of INR 20.6 billion, 74–75% linked to EVs, supporting future growth.
Overseas Turnaround: Overseas businesses remain challenged but significant order wins in electronics and lighting are expected to drive a turnaround from H2 FY'27.
Debt Update: Net debt increased to INR 4,405 million, mainly due to VRS outflow, but management targets zero net debt by end of next year.
Guidance: Management targets 15–20% revenue growth, aiming to outpace the market by 4–5% going forward.
