Varroc Engineering (Varroc), a global tier-I auto components group has announced its financial results for Q2 FY2024.
The company reported revenue of Rs 1,893 crore, revenue for Q2 FY2024 as against Rs 1,816 crore last year. The net profit came at Rs 55.7 crore as against a loss of Rs 19 crore for the same period last year.
Tarang Jain, CMD, Varroc said, “The geopolitical situation in Europe and the Middle East has created uncertainty in the global business environment. The interest rates may come under pressure if inflation goes up further due to a spike in oil prices. Despite these uncertainties in the global markets, we see a resilient and growing economy in India. The Indian economy has sustained its growth momentum in FY2024 so far. Though the urban demand has already picked up well, we are expecting that the rural demand will also pick up with the current festive season.”
He further stated that the company has seen improvement both in terms of operations as well as finances.
The company grew its revenues by 3 percent on a YoY basis, despite weak growth in overseas markets due to the holiday season in Europe. The financial performance saw improvement in H1 FY2024 as the company pulled ahead some of the debt reduction initiatives to Q2 and reduced its net debt significantly by over Rs 271 crore in H1 FY24 bringing its Net Debt/Equity ratio to below 1X.
“We continue to win the trust of the customers as they are awarding us more business. This is reflected in the new order win. In H1 FY24 our new lifetime order win is Rs 360 crore. In Q2 FY24, we have added 3 new customers for supplying components to their EV models. In the quarter, we also won business from 2 customers for supplying components related to the EV powertrain. These new orders will enable us to strengthen our presence in EV component space. Our revenue from supplying to EV players in Q2 FY24 was approximately around 4.4 percent of our overall revenue.
Our effort to increase our technical capability was further enhanced in H1 FY24 as we filed 9 patents in India and 1 overseas,” added Jain.
Furthermore, the Varroc Engineering is also working to further improve capacity utilisation, prudent capital allocation and cost reduction across the board to make business more robust.
