Aurangabad-headquartered tier 1 supplier Varroc Engineering reported revenue of Rs 1,834 crore, up 21 percent YoY, while EBITDA came at 9.2 percent, and a net loss of Rs 19 crore, which was mainly due to the net mark-to-market forex impact.

Tarang Jain, CMD, Varroc Engineering said, “In India, automobile production for all the segments in Q2 FY23 grew on YoY basis as well as on QoQ basis. The main reasons are due to the lower base of last year and early festive season.  On YoY basis, two-wheelers production grew by 7.7%, three-wheeler by 24.3%, passenger vehicle by 38.1% and commercial vehicle by 36.2%.” 

“In terms of our operations, happy to inform that we grew revenue from continued operations by 21.2% to Rs 18,399 million on YoY basis. This is the highest ever revenue generated by our entities in the Continued operations in any quarter. We improved our profitability on sequential basis with improvement in EBITDA margin by 100 basis points. This is second consecutive quarter when EBITDA margin has expanded, and it came in at 9.2%.”

He further mentioned that the operational PBT before JV profit for continued operation also saw sequential improvement of more than 294% in the quarter at Rs 54 crore. The profit before tax of Rs 30 crore was impacted negatively by net mark-to-market forex impact of Rs 24 crore mainly due to the intercompany loans.

“We continue to have strong order wins for new business in H1 FY23 across business units enabling our future growth. During H1 FY23, lifetime revenue from new order wins is Rs 25,476 million. Out of this, business wins from 5 prominent EV customers is Rs 8,676 million. Profitable business wins, improving the contribution margin, focusing on PBT instead of EBITDA margin, sweating of assets, inventory reduction, commercialisation of our R&D efforts, control on costs, growing free cash flow, debt reduction and prudent capital allocation remain the focus of the company,” Jain concluded.