Varroc Engineering (VARROC) Q1 26/27 earnings summary

Executive summary

• Q1 FY27 consolidated revenue rose 29.9% year-over-year to INR 26.3 billion, with India operations up 28.6% and overseas up 45.6%, driven by strong EV and electronics segments.

• EV-related revenue accounted for 16% of total, growing 87% year-over-year, with major new business wins and capacity expansion.

• Significant business wins included a 4W lighting contract in Thailand and higher e-mobility volumes from existing customers.

• Management remains focused on accelerating growth, investing in technology and talent, and strengthening global partnerships.

• Unaudited standalone and consolidated financial results for the quarter ended June 30, 2026, were approved by the Board on August 6, 2026.

Financial highlights

• EBITDA margin for Q1 was 8.5%, down from 9.5% last year, impacted by war-related costs, lower tooling sales margin, and higher manpower costs.

• PBT before JV and exceptional items was 4.3% of revenue, up 20 bps year-over-year.

• PAT, excluding exceptional items, grew nearly 70% year-over-year.

• Net debt stood at INR 5,268 million, with net debt to equity at 0.28x and net debt to EBITDA below 0.6x.

• Standalone and consolidated net profits diverged, with standalone profit rising and consolidated profit falling year-over-year.

Outlook and guidance

• Management expects FY27 revenue growth of 20%-25%, driven by continued EV penetration and strong order book.

• Medium-term target is to achieve 10% PBT margin within two years.

• Long-term vision is to double revenue to INR 20,000 crore by FY31, with 20%-30% from overseas and 10% from inorganic growth.

• Focus remains on debt reduction, prudent capital deployment, and efficient FCF conversion.

• Management continues to monitor regulatory changes and ongoing legal proceedings.