Auto Parts & Equipment company Varroc Engineering announced FY24 results: Consolidated revenue from operations was Rs 75,519 million in FY24 Consolidated PBT margins in FY24 were at 4.2%, improved by 300 bps Net Debt/Equity improves to 0.64 in FY24 from 1.27 in FY23 Strong new order lifetime win of Rs 87.0 billion in FY24 Tarang Jain, CMD commented, “The global economy faced several uncertainties during FY24 due to intensified conflicts in Europe and Asia. The expectations for decisive rate cuts across the world have been moderated in recent times, as underlying inflationary pressures are not easing as fast as expected. However, the risk of global recession seems to be receding now. We hope that the geo-political issues don’t escalate further. The Indian economy continues to outperform and in Q3 FY24 the GDP growth was robust 8.4%. The automobile sector in India registered growth across all segments during FY24. The passenger vehicle segment grew by 6.9% and CV segment by 3.0%. The 3W and 2W segments registered strong growth of 16.0% and 10.3% respectively. Strong domestic demand and stable economy have enabled this growth. In Q4FY24 on YoY basis, the automobile growth was strong with 2W growing by 26.5%, 3W by 8.4% and PV by 9.7%. The CV segment saw a marginal de-growth of 0.5%. For the full FY24, our India operations continued to deliver strong performance with growth of over 14.1%. Our overseas business was impacted in FY24 due to significant degrowth in 2W automotive sales and heavy customer concentration in certain overseas markets. The full year revenue was Rs. 75,519 million, the PBT for the year was Rs. 3,149 million which includes profit from our joint venture of Rs 444 miilion. The PBT margin improved by 300 basis point on YoY basis and came at 4.2%. PBT for the year. PBT was also impacted by certain onetimers like the provision of Rs.160 million created for doubtful recovery of receivables from an EV customer. In FY24 the capex spent was Rs. 2,016 million. Thus, better profitability, tighter control on capex & working capital enabled us to reduce the net debt to below Rs. 10,000 million at Rs. 9,826 million. The Net Debt to Equity ratio improved to 0.64 in FY24 from 1.27 in FY23. The loan servicing ability also improved as our Net Debt to EBITDA improved to 1.29 in FY24 from 2.13 in FY23." Result PDF
Auto Parts & Equipment company Varroc Engineering announced Q3FY24 & 9MFY24 results: Consolidated revenue from operations was Rs 18,846 million in Q3FY24, registering a growth of 9.4% on a YoY basis Profit Before Tax grew 5 fold YoY Consolidated PBT margins in Q3FY24 were at 3.7%, improved by 300 bps YoY Strong new order lifetime win of Rs 67.57 billion in 9MFY24 Tarang Jain, CMD commented, “The Indian Economy continues to sustain its growth momentum with a GDP growth of 7.6% in Q2FY24 exceeding market expectations. The automobile production in India during Q3FY24 grew on a YoY basis for all the segments. Passenger vehicles grew by 5.0%, Commercial vehicles grew by 5.9% whereas 3W and 2W registered a strong growth of 13.4% and 19.0% respectively. This growth was due to a strong economy and the late festive season this year. Sequentially, i.e. QoQ we have seen de-growth in all the segments, CV has de-grown by 8.3%, PV by 10.9%, 3W by 8.9% and 2W saw de-growth of 1.5%. The de-growth on a QoQ basis seems to be mainly due to the year-end phenomenon. Our operations in Q3FY24 mirrored the industry situation. Our revenue in India grew by 20.1% higher than both two-wheeler & passenger vehicle industry growth on a YoY basis. However, our revenue from our overseas operations had a de-growth as two-wheeler production levels went down in certain markets like Vietnam and Italy. In addition, our customer concentration in these markets impacted our revenue. As we look forward to our overseas business, our focus is to drive customer diversification in the order book and hence mitigate our customer concentration risk. We also drive cost actions through insourcing and working capital optimization. These efforts are likely to lead to a gradual recovery in overseas markets and improved financial performance in the medium term. Despite de-growth in overseas markets in Q3, the overall revenue from operations grew by 9% on a YoY basis to Rs 18,846 million, the reported PBT for the quarter was Rs 708 million which includes profit from our joint venture of Rs 250.7 million. The PBT margin improved by 300 basis points on a YoY basis and came at 3.7%." Result PDF
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 PDF