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Varroc Engineering Limited
(VARROC)
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Rating:63Neutral
Price Target:
₹711.00
▲(16.40% Upside)
Action:Reiterated
Date:05/28/26
The score is driven primarily by improving fundamentals (revenue growth, profitability recovery, and a much stronger leverage profile), offset by weak FY2026 free-cash-flow conversion and uneven margins. Technically, the stock shows a strong uptrend and positive momentum, but valuation support is limited due to a negative P/E and a very low dividend yield.
Positive Factors
Improved leverage / stronger balance sheet
Varroc's meaningful reduction in leverage and higher equity provide enduring financial flexibility. With debt roughly 40% of equity in FY2026 versus much higher leverage in FY2023, the company can better withstand OEM cyclical demand, access capital for program wins, and fund targeted capex without immediate refinancing pressure.
Negative Factors
Weak free cash flow conversion
A sharp fall in free cash flow to ~0.33B in FY2026, down roughly 77.6% year over year, indicates volatile cash conversion after investment or working capital swings. This lowers liquidity buffer and constrains strategic options for M&A, share repurchases, or cushioning against OEM order volatility in the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
Improved leverage / stronger balance sheet
Varroc's meaningful reduction in leverage and higher equity provide enduring financial flexibility. With debt roughly 40% of equity in FY2026 versus much higher leverage in FY2023, the company can better withstand OEM cyclical demand, access capital for program wins, and fund targeted capex without immediate refinancing pressure.
Read all positive factors
Varroc Engineering Limited (VARROC) vs. iShares MSCI India ETF (INDA)
Market Cap
₹102.06B
Dividend Yield0.16%
Average Volume (3M)13.17K
Price to Earnings (P/E)44.8
Beta (1Y)1.41
Revenue Growth9.03%
EPS Growth267.59%
CountryIN
Employees27,603
SectorGeneral
Sector StrengthN/A
IndustryAuto - Parts
Share Statistics
EPS (TTM)14.74
Shares Outstanding152,786,400
10 Day Avg. Volume5,337
30 Day Avg. Volume13,169
Financial Highlights & Ratios
PEG Ratio0.12
Price to Book (P/B)4.01
Price to Sales (P/S)0.80
P/FCF Ratio213.63
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)24.22
Revenue Forecast (FY)₹99.57B
Varroc Engineering Limited Business Overview & Revenue Model
Company Description
Varroc Engineering Limited provides aftermarket automotive components and solutions worldwide. It offers e-mobility solutions, such as traction motors, controllers, and DC-DC converters; ice powertrain solutions, including valves, transmission com...
How the Company Makes Money
Varroc Engineering makes money primarily by manufacturing and selling automotive components and systems to original equipment manufacturers (OEMs). Its revenue model is business-to-business and program-based: components are awarded through OEM sou...
Varroc Engineering Limited Financial Statement Overview
Summary
Income Statement
63
Positive
Balance Sheet
72
Positive
Cash Flow
55
Neutral
| Breakdown | Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 88.90B | 81.54B | 75.52B | 68.91B | 58.44B |
| Gross Profit | 18.94B | 28.33B | 27.15B | 23.68B | 19.20B |
| EBITDA | 8.07B | 7.26B | 7.02B | 5.42B | 6.83B |
| Net Income | 2.25B | 612.30M | 5.26B | -8.20B | -11.10B |
Balance Sheet | |||||
| Total Assets | 48.75B | 46.72B | 45.60B | 46.21B | 109.98B |
| Cash, Cash Equivalents and Short-Term Investments | 2.42B | 2.01B | 2.27B | 3.57B | 1.18B |
| Total Debt | 9.25B | 11.18B | 13.90B | 18.06B | 16.25B |
| Total Liabilities | 30.57B | 30.74B | 30.34B | 36.17B | 89.84B |
| Stockholders Equity | 17.80B | 15.65B | 14.97B | 9.76B | 19.89B |
Cash Flow | |||||
| Free Cash Flow | 334.25M | 4.48B | 3.64B | 880.13M | -2.18B |
| Operating Cash Flow | 4.31B | 7.37B | 6.38B | 6.86B | 6.36B |
| Investing Cash Flow | -1.35B | -2.46B | -1.66B | -2.86B | -7.63B |
| Financing Cash Flow | -2.88B | -4.90B | -6.64B | -2.16B | -3.35B |
Varroc Engineering Limited Technical Analysis
Positive
610.85
Price Trends
595.18
Positive
555.53
Positive
584.29
Positive
Market Momentum
20.96
Negative
65.69
Neutral
62.92
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IN:VARROC, the sentiment is Positive. The current price of 610.85 is below the 20-day moving average (MA) of 636.75, above the 50-day MA of 595.18, and above the 200-day MA of 584.29, indicating a bullish trend. The MACD of 20.96 indicates Negative momentum. The RSI at 65.69 is Neutral, neither overbought nor oversold. The STOCH value of 62.92 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IN:VARROC.
Varroc Engineering Limited Peers Comparison
UnderperformOutperform
Sector (55)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
70 Outperform | ₹1.22T | 44.08 | ― | 1.42% | 10.77% | 37.61% | |
66 Neutral | ₹1.50T | 38.93 | ― | 0.47% | 10.95% | -11.42% | |
63 Neutral | ₹102.06B | 44.81 | ― | 0.16% | 9.03% | 267.59% | |
62 Neutral | ₹262.81B | 41.72 | ― | 1.24% | 23.15% | -17.34% | |
58 Neutral | ₹101.59B | 35.74 | ― | 0.35% | 33.92% | 56.87% | |
58 Neutral | ₹654.96B | 55.71 | ― | 0.17% | 17.19% | 26.45% | |
55 Neutral | $6.65B | 3.83 | -15.92% | 6.20% | 10.91% | 7.18% |
* General Sector Average
IN:VARROC
Varroc Engineering Limited
662.50
96.42
17.03%
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Varroc Engineering Limited Corporate Events
Varroc invests in captive solar power for Tamil Nadu and Karnataka plants
Jul 8, 2026
Varroc Engineering Limited has entered into agreements with two special purpose vehicles promoted by AMPIN Energy to procure captive solar power for its manufacturing facilities in Tamil Nadu and Karnataka. The SPVs will develop and operate renewa...
Varroc invests in captive solar power for Tamil Nadu and Karnataka plants
Jul 8, 2026
Varroc Engineering Limited operates in the automotive components industry, supplying a range of engineered products to vehicle manufacturers. The company runs manufacturing facilities in multiple Indian states, including Tamil Nadu and Karnataka, ...
Varroc Cancels Scheduled Investor Meeting, Cites Investor Exigencies
Jun 18, 2026
Varroc Engineering informed stock exchanges that a scheduled meeting with institutional investor Carnelian Asset Management, planned as an in-person session in Pune on June 18, 2026, has been cancelled due to unavoidable exigencies on the investor...
Varroc Releases FY26 Earnings Call Transcript for Investors
Jun 2, 2026
Varroc Engineering Limited has released the transcript of its investor and conference call discussing audited financial results for the quarter and full financial year ended March 31, 2026. The disclosure, shared with both NSE and BSE, supports tr...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.