Board Meeting Details

The Board of Directors meeting was held on Thursday, August 6, 2026, commencing at 11:35 a.m. and concluding at 4:26 p.m., where the following items were approved:

  • Unaudited Financial Results (Standalone and Consolidated) for quarter ended June 30, 2026
  • Limited Review Reports from Statutory Auditors

Standalone Financial Performance (₹ in millions)

Quarter Ended June 30, 2026:

  • Revenue from operations: ₹23,634.95
  • Other income: ₹51.49
  • Total income: ₹23,686.44
  • Profit before tax: ₹1,335.35
  • Tax expense: ₹346.68
  • Profit for the period: ₹988.67
  • Earnings per share (basic & diluted): ₹6.47

Comparative Figures:

  • March 31, 2026: Revenue ₹21,496.30, Profit ₹1,018.22, EPS ₹6.66
  • June 30, 2025: Revenue ₹18,428.87, Profit ₹866.28, EPS ₹5.67

Key Financial Ratios (Standalone)

  • Debt Equity ratio: 0.28 times
  • Debt service coverage ratio: 6.38 times
  • Interest service coverage ratio: 8.59 times
  • Current Ratio: 0.86 times
  • Operating Margin: 6.56%
  • Net Profit Margin: 4.18%

Consolidated Financial Performance (₹ in millions)

Quarter Ended June 30, 2026:

  • Revenue from operations: ₹26,342.37
  • Other income: ₹61.95
  • Total income: ₹26,404.32
  • Profit before tax: ₹1,143.75
  • Tax expense: ₹366.72
  • Profit for the period: ₹777.03
  • Earnings per share (basic & diluted): ₹5.06
  • Profit attributable to shareholders: ₹772.72

Auditor Qualifications

Statutory auditors SRBC & CO LLP issued a qualified opinion on both standalone and consolidated results due to:

TYC Parties Arbitration:

  • Settlement offer received during Q1 FY26 alleging breach of Transition Management Agreement
  • Dispute over ₹209.89 million revenue recognized from Chongqing Varroc TYC Auto Lamps Co., Ltd. (erstwhile joint venture)
  • Statement of Claim received under arbitration proceedings with additional claims/breaches
  • Company filed Statement of Defense in March 2026
  • Auditors unable to comment on income recognition and consequential impact

Emphasis of Matter

Auditors highlighted two additional matters:

OPmobility Arbitration:

  • Arbitration initiated by OPmobility Lighting Holding, France at ICC International Court of Arbitration
  • Alleged breaches of covenants under Securities Purchase Agreement dated April 29, 2022
  • Claims quantified at US$66.41 million plus legal costs
  • Management believes no provision necessary based on legal opinion

GST Disputes:

  • Two GST orders received regarding inappropriate classification of goods (July 2017 - September 2023)

1. Order dated November 5, 2024: GST dues ₹629 million + equivalent penalty + interest

2. Order dated January 3, 2025: GST dues ₹0.03 million + interest ₹302.67 million + penalty ₹564.19 million

  • Appeals partly allowed, reducing total demand to ₹284 million
  • Further appeals filed/being filed against interest and penalty components
  • No adjustments made in financial results pending conclusion

Exceptional Items

For year ended March 31, 2026, exceptional items included:

  • Labour Code implementation impact: ₹217.93 million (employee benefits expenses)
  • Voluntary Separation Scheme cost: ₹663.44 million (338 employees)
  • Write-back of merger-related accruals: ₹10 million

Commercial Paper Issuance

  • Issued 1,000 listed unsecured Commercial Papers of face value ₹500,000 each
  • Aggregate value: ₹500 million
  • Issued on July 22, 2026
  • Interest rate: 7.20%
  • Redemption date: August 21, 2026

Subsidiaries and Joint Ventures

Consolidated results include:

Subsidiaries (15 entities): Durovalves India Private Limited, Varroc Connect Private Limited, Varroc European Holding B.V., VarrocCorp Holding B.V., Varroc Japan Co. Limited, Industria Meccanica e Stampaggio S.p.A. (Italy), Varroc Italy S.p.A, Varroc Romania SA., Varroc Vietnam Co. Ltd., Varroc Electronics Romania SRL, Varroc Poland s.p.z.o.o, Varroc Germany GmBH, Varroc Intelligent Driving Research and Development Centre (Changzhou) Co. Ltd., Varroc (Thailand) Company Limited

Joint Ventures (2 entities): Nuova CTS, Sri, Italy; Varroc Dell'Orto Private Limited

Disclosure Compliance

  • Financial results published in Business Standard (English) and Loksatta (Marathi)
  • Results available on company website www.varroc.com
  • Filed pursuant to SEBI Listing Regulations 30, 33, and 52