Q2FY24 Quarterly Result Announced for Varroc Engineering Ltd.
Auto Parts & Equipment company Varroc Engineering announced Q2FY24 results: Consolidated revenue from operations was Rs 18,868 million in Q2FY24, registering a growth of 2.9% on a YoY basis Consolidated PBT margins in Q2FY24 were at 3.9%, improved by 220 bps YoY Net Debt reduced by Rs 2,214 million in Q2FY24 and Annualized ROCE of 23% Strong new order lifetime win of Rs.36.02 billion in H1FY24 Tarang Jain, CMD commented, “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 FY 2024 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. In terms of our operations in Q2FY24, we continued our journey of improving operational and financial performance. Our revenue from operations grew by 3% on a YoY basis to Rs 18,868 million, despite weak growth in overseas markets due to the holiday season in Europe. The reported PBT for the quarter was Rs 739 million which includes profit from our joint venture of Rs 80.6 million. Our balance sheet has strengthened in H1FY24 as we pulled ahead some of the debt reduction initiatives to Q2 and reduced our net debt significantly by over Rs 2,714 million in H1FY24 and our Net Debt/Equity ratio to below 1X. Our debt servicing ability has also improved as Net Debt to EBITDA is now at 1.35X compared to over 2.13X at the start of the financial year. The annualized ROCE for the H1FY24 is around 23%. 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 H1FY24 our new lifetime order win is Rs 36.02 billion. In Q2FY24, 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 the EV component space. Our Revenue from supplying to EV players in Q2FY24 was approx. ~4.4% of our overall revenue. Our effort to increase our technical capability was further enhanced in H1FY24 as we filed 9 patents in India and 1 overseas. We continue to enhance our engagement with OEMs and showcase our ability to deliver advanced technology solutions at affordable cost to them. We are also working on various other efforts like capacity utilization, prudent capital allocation, and cost reduction across the board to make our business more robust.” Result PDF07-11-2023