Varroc Engineering Limited reported its unaudited financial results (consolidated and standalone) for the quarter and half year ended September 30, 2026.

Financial Performance Q2 FY27

  • Revenue from operations: ₹29,479 million, representing 33.6% year-on-year growth and 11.9% sequential growth
  • EBITDA: ₹2,611 million with EBITDA margin of 8.9%, improving from 8.5% in Q1 FY27
  • PBT before JV profits and exceptional items: ₹1,401 million (4.7% of revenue), compared to ₹912 million (4.1% of revenue) in Q2 FY26, representing 54% YoY growth
  • Exceptional items: ₹631 million negative impact (restructuring cost of 2W Lighting Italy manufacturing plus past tax related issues for Italy 2W lighting entity)
  • PBT (including JV profits) after exceptional items: ₹776 million (2.6% of revenue)
  • PAT: ₹335 million

Half Year Performance H1 FY27

  • Revenue from operations: ₹55,822 million, representing 31.8% year-on-year growth
  • India operations growth: 29.1% YoY
  • Overseas operations growth: 70.7% YoY

Operational Highlights

  • EV-related revenue: Approximately 19% of consolidated revenue in Q2 FY27 (up from ~16% in Q1 FY27)
  • EV revenue growth: Approximately 130% year-on-year
  • E-Mobility Solutions business revenue: Approximately ₹2,773 million during the quarter
  • Net new business wins: ₹10,127 million annualized peak revenue during H1 FY27, with more than 48% linked to EV programmes

Strategic Initiatives

  • Italy operations restructuring: Restructuring of two-wheeler lighting manufacturing operations in Italy, with manufacturing relocation to Romania and Vietnam
  • Expected payback period: Approximately three years for the restructuring
  • Forsee Power India acquisition: Proceeding with acquisition of stake in Forsee Power India to access battery-pack platform and know-how

Balance Sheet Position

  • Consolidated net debt: ₹5,547 million as of September 30, 2026
  • Net debt-to-equity ratio: 0.29
  • Net debt to annualized adjusted EBITDA: 0.57x

Challenges and Recovery Status

  • Commodity inflation from geopolitical developments impacted Q2 FY27 EBITDA margin by approximately 80 basis points
  • More than ₹1,140 million of agreed customer recoveries remained unrealised in cash at the end of H1 FY27

Management Commentary

CMD Mr. Tarang Jain stated: "We delivered another quarter of strong growth, with sequential improvement in profitability despite commodity inflation and the timing gap in customer recoveries. Our EV business continues to gain scale, with EV-related revenue growing approximately 130% year on year and accounting for around 19% of consolidated revenue during the quarter. Our overseas business continue to commercialise new business win and grow its Revenue exponentially and reduce the losses."

Priorities remain: grow profitably, improve margins, generate free cash flow, maintain capital discipline and enhance return on capital employed.

Company Background

Varroc Engineering Ltd is a global tier-1 automotive component group incorporated in 1988. The group manufactures and supplies E-mobility solutions, Body systems solutions, Lighting solutions, HMI solutions, ICE powertrain and Advanced electronics to leading OEMs. Group income was ₹89,080 million from continued operations in FY26. The group employs more than 6,100 employees (750+ R&D Engineers), has 37 global operating manufacturing facilities supported by 7 R&D Centres, and has filed more than 130 patents.