Varroc Engineering Limited (VARROC) AI Stock Analysis

• Market Cap: ₹96.71B
• Dividend Yield: 0.16%
• Average Volume (3M): 13.17K
• Price to Earnings (P/E): 69.5
• Beta (1Y): 1.61
• Revenue Growth: 7.38%
• EPS Growth: -73.62%
• Country: IN
• Employees: 3,907
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Auto - Parts
• EPS (TTM): 4.20
• Shares Outstanding: 152,786,400
• 10 Day Avg. Volume: 5,337
• 30 Day Avg. Volume: 13,169
• PEG Ratio: -1.20
• Price to Book (P/B): 4.18
• Price to Sales (P/S): 0.80
• P/FCF Ratio: 14.62
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 69 Neutral
• Price Target: ₹614.00 ▼(-2.32% Downside)

Varroc Engineering Limited's overall stock score is driven by strong financial performance and positive technical indicators. The company's robust cash flow and reduced debt levels are significant strengths. However, the high P/E ratio and low dividend yield suggest potential overvaluation, which tempers the overall score.

Positive Factors

Revenue Growth

Varroc's consistent revenue growth indicates strong market demand and effective business strategies, enhancing its competitive position.

Cash Flow Generation

Strong cash flow generation supports Varroc's ability to invest in growth opportunities and reduce debt, ensuring long-term financial stability.

Debt Reduction

Significant debt reduction enhances Varroc's financial flexibility and lowers risk, positioning it better for future growth and investment.

Negative Factors

Net Income Volatility

Volatility in net income suggests potential instability in profitability, which could affect Varroc's ability to consistently reinvest in its business.

High Liabilities

High liabilities pose a risk to Varroc's financial health, potentially limiting its ability to leverage opportunities or withstand economic downturns.

Thin Net Profit Margins

Thin net profit margins suggest limited profitability, which could constrain Varroc's capacity to fund growth initiatives and enhance shareholder value.

Varroc Engineering Limited Business Overview & Revenue Model

Company Description

Varroc Engineering Limited designs, manufactures, and supplies exterior lighting systems, plastic and polymer components, electrical and electronics components, and precision metallic components worldwide. It operates through Automotive and Others segments. The company offers unpainted and painted body parts; exterior and interior systems; seating systems; mirror systems; air filters; automotive accessories; lighting systems; instrument clusters; catalytic converters; switches; motors and magnetos; electronics; traction motors and controllers; DC-DC converters; and engine valves. It also provides precision, forged, and machined parts for engine and transmissions to two-wheeler, three-wheeler, four-wheeler, commercial vehicle, off-highway, earthmoving, and oil drilling application; and transmission gears and assemblies, crankpins, connecting rods, flanges, ring gears, crankshafts, camshafts, knuckles, front axle beams, hydraulic shafts, heavy undercarriage parts, and drill bits and cones, as well as head and signal lamps. The company serves passenger car, commercial vehicle, two-wheeler, three-wheeler, and off-highway vehicle original equipment manufacturers. Varroc Engineering Limited was incorporated in 1988 and is headquartered in Aurangabad, India.

How the Company Makes Money

Varroc Engineering generates revenue primarily through the supply of automotive components to Original Equipment Manufacturers (OEMs) and Tier 1 suppliers. The company's revenue model is based on long-term contracts with automotive manufacturers, which provide a steady income stream. Key revenue streams include sales from exterior and interior plastic components, lighting systems, and electronic components. Additionally, Varroc benefits from its strategic partnerships with major automotive brands, enabling it to secure bulk orders and maintain a competitive edge in pricing and innovation. The company's focus on research and development also allows it to introduce new products and technologies, further enhancing its revenue potential.

Varroc Engineering Limited Financial Statement Overview

Summary

Varroc Engineering Limited has shown a solid recovery in revenue and improved profitability metrics. The balance sheet is strengthening with reduced debt levels and stable equity. Cash flow generation is robust, supporting financial flexibility. However, maintaining net income growth and managing liabilities remain critical.

Income Statement

Varroc Engineering Limited has demonstrated a solid recovery in revenue, growing from 57.85 billion in 2022 to 81.54 billion in 2025. The gross profit margin improved, indicating better cost management. However, fluctuations in net income, with negative figures in the early years and turning positive in later years, suggest potential volatility in profitability. EBITDA margins are stable, reflecting operational efficiency, but net profit margins remain thin, indicating room for improvement.

Balance Sheet

The balance sheet shows a decrease in total debt from 42.55 billion in 2020 to 11.18 billion in 2025, improving the debt-to-equity ratio and reflecting better financial management. Stockholders' equity has stabilized, contributing to a stronger equity ratio. However, overall liabilities remain high relative to assets, posing potential risk if not managed effectively.

Cash Flow

Free cash flow has shown a positive growth trend, with significant improvement from negative figures in earlier years to a robust 4.48 billion in 2025. Operating cash flow consistently exceeds net income, indicating strong cash generation capability. This positive cash flow trajectory supports future investments and debt reduction efforts.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	82.89B	81.54B	75.52B	68.91B	58.44B	43.74B
Gross Profit	28.84B	28.33B	27.15B	23.68B	19.20B	15.30B
EBITDA	7.65B	7.26B	7.02B	5.42B	6.83B	6.28B
Net Income	1.34B	612.30M	5.26B	-8.20B	-11.10B	-6.32B
Balance Sheet
Total Assets	0.00	46.72B	45.60B	46.21B	109.98B	112.25B
Cash, Cash Equivalents and Short-Term Investments	2.01B	2.01B	2.27B	3.57B	1.18B	7.45B
Total Debt	0.00	11.18B	13.90B	18.06B	16.25B	36.95B
Total Liabilities	-15.98B	30.74B	30.34B	36.17B	89.84B	81.69B
Stockholders Equity	15.98B	15.65B	14.97B	9.76B	19.89B	30.28B
Cash Flow
Free Cash Flow	0.00	4.48B	3.64B	880.13M	-2.18B	-3.01B
Operating Cash Flow	0.00	7.37B	6.38B	6.86B	6.36B	4.74B
Investing Cash Flow	0.00	-2.46B	-1.66B	-2.86B	-7.63B	-6.44B
Financing Cash Flow	0.00	-4.90B	-6.64B	-2.16B	-3.35B	-1.52B

Varroc Engineering Limited Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 628.60
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IN:VARROC, the sentiment is Neutral. The current price of 628.6 is below the 20-day moving average (MA) of 647.11, below the 50-day MA of 633.02, and above the 200-day MA of 547.52, indicating a neutral trend. The MACD of -1.07 indicates Positive momentum. The RSI at 43.52 is Neutral, neither overbought nor oversold. The STOCH value of 44.12 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for IN:VARROC.

Varroc Engineering Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LUMAXTECH	73 Outperform	₹98.62B	46.64	―	0.37%	36.70%	36.24%
FIEMIND	70 Outperform	₹60.29B	26.55	―	1.31%	16.64%	22.21%
VARROC	69 Neutral	₹96.71B	69.49	―	0.16%	7.38%	-73.62%
SHARDAMOTR	66 Neutral	₹53.96B	16.16	―	2.78%	6.96%	6.33%
SAREGAMA	63 Neutral	₹68.35B	33.62	―	2.38%	26.97%	8.03%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
SUPRAJIT	54 Neutral	₹64.37B	40.30	―	0.65%	14.20%	16.80%

Varroc Engineering Limited Corporate Events

Varroc Engineering Schedules Investor Conference Call

Varroc Engineering Limited has announced its participation in a conference call with institutional investors and analysts scheduled for December 10, 2025. The meeting will be conducted virtually, and discussions will be based on publicly available information, ensuring no unpublished price sensitive information is shared. This engagement reflects Varroc’s commitment to maintaining transparency and compliance with SEBI regulations, potentially enhancing investor relations and market confidence.

Varroc Engineering to Engage with Institutional Investors in Upcoming Conference Call

Varroc Engineering Limited has announced its participation in a conference call with institutional investors and analysts, scheduled for December 3, 2025, with Motilal Oswal Mutual Fund. The meeting will be conducted virtually, and discussions will be based on publicly available information, ensuring no unpublished price-sensitive information is disclosed. This engagement reflects Varroc’s commitment to maintaining transparency with its stakeholders and adhering to regulatory compliance.

Varroc Engineering Schedules Board Meeting for Financial Results

Varroc Engineering Limited has announced a Board Meeting scheduled for November 12, 2025, to consider and approve the unaudited financial results for the quarter and half-year ended September 30, 2025. The trading window for dealing in the company’s securities has been closed since October 1, 2025, and will remain closed until November 14, 2025, following the announcement of the financial results.

Varroc Engineering Schedules Board Meeting to Review Financial Results

Varroc Engineering Limited has announced a Board Meeting scheduled for November 12, 2025, to review and approve the company’s unaudited financial results for the quarter and half-year ending September 30, 2025. Additionally, the company has implemented a trading window closure from October 1, 2025, to November 14, 2025, to ensure compliance with regulatory requirements, impacting stakeholders’ ability to trade during this period.