Varroc Engineering jumps after Q1 adjusted profit rises 30% YoY
Net sales rose 29.9% YoY and 11.2% QoQ to Rs 2,634.24 crore in the quarter ended 30 June 2026.
Profit before tax stood at Rs 114.38 crore in Q1 FY27, down 20.5% YoY but up 5.2% QoQ.
EBITDA increased 16.1% YoY but declined 3.3% QoQ to Rs 222.80 crore. EBITDA margin contracted to 8.5% from 9.5% in Q1 FY26 and 9.7% in Q4 FY26.
On the cost front, total expenditure increased 30.4% YoY and 11.9% QoQ to Rs 2,496.67 crore. Raw material consumption increased 32.7% YoY to Rs 1,686.79 crore. Employee expenses increased 10.9% YoY to Rs 267.45 crore. Finance costs declined 15.6% YoY to Rs 30.65 crore, while depreciation expenses increased 4.0% YoY to Rs 84.32 crore.
The company said revenue growth was driven by a 28.6% increase in India operations and a 45.6% rise in overseas business. Revenue from electric vehicle programmes accounted for 15.8% of total revenue and grew 87% YoY during the quarter.
Chairman and managing director Tarang Jain said higher commodity prices linked to the West Asia conflict, increased tooling sales and an adverse business mix weighed on profitability. However, the India business delivered an EBITDA margin of 10.6% and a profit-before-tax margin of around 7%. He added that losses in the overseas business continued to decline sequentially, while the company secured new business wins with annualised peak revenue potential of Rs 599.10 crore.
Net debt stood at Rs 526.80 crore at the end of the quarter, up Rs 31.60 crore sequentially due to higher working capital requirements. The net debt-to-equity ratio remained at a comfortable 0.28, while average return on capital employed stood at around 24%.
Looking ahead, the company said it will focus on improving contribution margins, controlling fixed costs, generating free cash flow and enhancing return on capital across its businesses while navigating the volatile operating environment.
Varroc Engineering is a global tier-1 automotive components manufacturer supplying e-mobility, body systems, lighting, HMI, ICE powertrain and advanced electronics solutions to OEMs across two-wheelers, three-wheelers, passenger vehicles, commercial vehicles and off-highway vehicles. The company operates 37 manufacturing facilities and seven R&D centres worldwide, employs over 6,100 people, and reported group income of Rs 8,908 crore from continuing operations in FY26.
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