Tier 1 supplier Varroc Engineering has announced its financial results for Q4 FY2023 and FY2023. The company reported revenue of Rs 1,690 crore in Q4 FY2023, up 2.3 percent YoY, EBITDA margins of 9.5 percent and net profit of Rs 40 crore, compared to a loss of Rs 32 crore a year ago.
For the fiscal, the revenue came at Rs 6,863 crore, up 17.4 percent, EBITDA at 8.7 percent and net profit of Rs 38 crore versus a loss of Rs 78 crore a year ago.
Tarang Jain, CMD, Varroc said, “Automobile production in India during Q4 FY23 grew on YoY basis for most of the segments, due to easing of semiconductor issues and improved economic activity. However, the industry segment from which we generate around 70 percent revenue i.e. two-wheeler segment, saw de-growth of -3 percent as exports are impacted by geo-political issues and domestic demand was impacted due to lower consumption in rural areas.”
“Our consolidated revenue from operations grew by 2.6 percent on YoY basis to Rs.17,011 million during Q4 and by 17.4 percent during full year. Our EBITDA margin was at 9.5 percent and it improved on YoY basis due to business mix, recovery and operating leverage.”
Jain further stated that there were early signs of increase in rural consumption and strong domestic economy are expected to augur well for a good FY24.
In India, Varroc clocked strong order wins for new business in FY 2023 across business units. The lifetime revenue from new order wins came at Rs 5,178 crore last year. Of this, business wins from 7 prominent EV customers the company says came at Rs 1,796 crore.
“The order books also reflect our effort to diversify as we see nearly 56 percent of lifetime order win from four-wheeler segment and 44 percent from two- and three-wheeler segment. Our strong R&D capabilities helped us in filing 15 patents in FY23 from the group, besides enabling us to commercialise new products in this financial year. During the current financial year, our businesses will continue their focus on profitability improvement, FCF generation, prudent capital deployment and debt reduction,” concluded Jain.