Auto Parts & Equipment company Varroc Engineering announced Q4FY25 & FY25 results Q4FY25 Financial Highlights: Revenue from Operations increased by 6.3%, from Rs 19,749 million to Rs 20,992 million. EBITDA decreased by 2.4%, from Rs 2,187 million to Rs 2,134 million. EBITDA Margin declined by 90 bps, from 11.1% to 10.2%. PBT before JV & Exceptional Items rose by 3.6%, from Rs 998 million to Rs 1,034 million. Share of Profit of JV decreased from Rs 51 million to Rs 3 million. PBT declined by 55%, from Rs 1,050 million to Rs 473 million. FY25 Financial Highlights: Revenue from Operations increased by 8%, from Rs 75,519 million to Rs 81,541 million. EBITDA increased by 2.3%, from Rs 7,590 million to Rs 7,767 million. EBITDA Margin fell by 60 bps, from 10.1% to 9.5%. PBT before JV & Exceptional Items rose by 15.7%, from Rs 2,705 million to Rs 3,129 million. Share of Profit of JV declined sharply by 91.7%, from Rs 444 million to Rs 37 million. PBT decreased by 46.2%, from Rs 3,149 million to Rs 1,693 million. The Board of Directors have recommended dividend of 100% of Face value i.e. Rs 1 Tarang Jain, CMD commented, “India has now become the 4th largest economy and the GDP had a steady growth of 6.2% in Q3FY25. Softening of Inflation in last few quarters and interest rates reduction globally encouraged our Central Bank to reduce Repo rate by 50 basis points. Weak growth in consumption, on top of global & regional conflicts and uncertain tariff regime, may impact discretionary spending which can have impact on Automotive Industry. However, we remain confident about the medium to long-term growth prospects of automotive industry. During Q4 of FY25, all the segments registered moderate growth on YoY basis : - 2W grew by 5.8%, PV grew by 5.2%, CV grew by 3.1% & 3W grew by 9.5%, On QoQ basis also, almost all segments, other than 2W, reported strong growth as normally Q4 is a strong quarter for India automotive industry every year. 2W de-grew by 1.2%, 3W grew by 3.0%, PV grew by 20.4%, and only CV grew by 20.9% Before discussing the operational performance of the Company, I would like to highlight a few other aspects which will help the Company to become more sustainable and enable value enhancement for the stakeholders : In FY25, we filed 25 patents and were granted more than 10+ patents. Thus, the total filings made now add up to more than 120 for the Company, which will further strengthen the intellectual property of the Company and help in developing technologically advanced products at an affordable cost. Secondly, we also completed the sale of our stake in the China JV and realised the net proceeds of RMB 290 million during May 2025. Thirdly, our sourcing of electricity from Renewable Energy has been increasing throughout FY25 and was around 31% for FY 25 as against 13% last year. For the month of March’25, it reached around 45%. We are also working on commencement of phase-2 of renewable energy project which will further improve this to > 50% in the coming year. These initiatives will boost our ESG credentials, besides giving us savings in electricity cost. Now coming to the operational performance, during Q4FY25, the Company registered consolidated revenue of Rs 21 bn with a growth of 11% YoY on like-to-like basis, with India operations growing at 13%. Our EBITDA for the quarter was around 10.2% on back of improvement in the gross margin and benefits of operating leverage. Our PBT before exceptional items and JV profits was over Rs 1 billion or 4.9% of revenue in Q4FY25. As you all know, we have been working on structural changes like merger of VEL and VPL and exiting from China JV. We had to recognize certain one-time exceptional items primarily relating to these initiatives, which will simplify our operations and also improve our financial performance going forward. We continue to strengthen our balance sheet and return ratios. The net debt of the company in FY25 reduced by 2,348 million and as a result the net debt to equity reduced to below 0.5x at the end FY25 from 0.64X at the end of FY24. The absolute net debt figure was at 7,480 million. ROCE (before tax) for FY25 was 20.8% and free cash flow generation was also healthy at Rs 3116 millions or 3.8% of revenue before growth capex in land. In FY25, we also achieved net new business wins with annualized peak revenues of Rs 11,734 million, with EV models constituting more than 55% of this. It is more heartening to see business wins in our overseas operations also, which will improve profitability from FY 27 onwards. Our continuing focus on revenue growth, improvement in gross margin, control on fixed cost and optimization of capex and working capital will enable us to generate healthy free cash flows in the future also.” Result PDF