Varroc Engineering Limited has informed the Exchange about Transcript
VARROC · price
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Varroc Engineering reported Q1 FY26 consolidated revenue of INR 2,028 crores, up 6.8% year-on-year, with India operations growing 7.2% (outperforming a sluggish market). EBITDA margin improved to 9.5% (vs 9.1% YoY) and PBT before exceptional items rose to 4.1% (vs 2.8% YoY), supported by strong India gross margins of around 35%. New business wins in Q1 stood at INR 291 crores in annualized peak revenue, with EV revenue share more than doubling to 11% (from 5% YoY); Bajaj contributed 45% of total revenue. Net debt was reduced by INR 300 crores to INR 448 crores (net debt/equity below 0.3x), aided by a INR 340 crore China JV divestment, and the CFO indicated another INR 100-150 crores of debt reduction is possible by year-end. Management acknowledged that Q1 order wins were soft but guided to substantial EV-led business wins from Q2 onwards, while flagging near-term EV production headwinds from rare earth magnet supply constraints.
Margin expansion, sharp debt reduction, and a doubling of EV revenue mix are positive signals for shareholders, supporting the stock's quality profile. However, near-term EV volumes face rare earth magnet supply risk, and overseas business remains loss-making (though expected to turn moderately profitable by H2 FY27).