Varroc Q2 Revenue Up 33.6% YoY

Revenue: ₹2,947.9 crore, representing 33.6% year-on-year growth and 11.9% sequential growth
India Operations Growth: 29.5% year-on-year
Overseas Operations Growth: 104.1% year-on-year
EBITDA: ₹261.1 crore with EBITDA margin of 8.9% (compared to 8.5% in Q1 FY27 and 9.1% in Q2 FY26)
Profit Before Tax (before JV profits and exceptional items): ₹140.1 crore (4.7% of revenue), compared to 4.3% in Q1 FY27 and 4.1% in Q2 FY26
Exceptional Items: ₹63 crore related to Italy restructuring and settlement of old tax disputes
PAT after exceptional items: ₹78 crore

Revenue: ₹5,582.2 crore, representing 31.8% year-on-year growth
EBITDA: ₹483.8 crore with EBITDA margin of 8.7% (compared to 9.3% in H1 FY26)
Profit Before Tax (before JV profits and exceptional items): ₹253.2 crore (4.5% of revenue), an improvement of 40 basis points year-on-year
PAT: ₹111 crore for H1 FY27

EV-related Revenue: Approximately 19% of Q2 FY27 consolidated revenue (up from 16% in Q1 FY27)
E-mobility Solutions Business Revenue: ₹277.3 crore in Q2 FY27 (up from ₹194.1 crore in Q1 FY27)
EV Revenue Growth: 130% year-on-year

Decision to restructure two-wheeler lighting manufacturing operations in Italy
Manufacturing to be relocated to facilities in Romania and Vietnam
Objective: Eliminate underutilized manufacturing footprint, improve fixed cost absorption and plant utilization
Expected payback period: 3 years for one-time shutdown costs
Savings expected to begin in FY28

Acquiring 45% stake in Forsee Power India (with option to increase by another 6%)
Focus on battery pack systems for electric vehicles
Provides access to operating battery pack platform and know-how
Expected to add battery packs and battery management systems to existing portfolio
Transaction intended to be consolidated as a subsidiary
Management expects revenue potential of over ₹1,000 crore over next 2-3 years

Net Debt (Sept 2026): ₹554.7 crore (increased from ₹495.2 crore as of March 31, 2026)
Primary Reason for Increase: Higher capital expenditure and delayed customer recoveries
Net Debt-to-Equity Ratio: 0.29
Net Debt to Annualized Adjusted EBITDA: 0.57x
Capital Expenditure Guidance: ₹500-550 crore for full year FY27 (₹300+ crore already spent in H1)

War-related Inflation Impact: Continued pressure on margins due to commodity inflation
Under-recovery Impact: 0.4% impact on EBITDA in H1 FY27
Pending Customer Recoveries: Over ₹114 crore agreed with customers but not realized in cash
Recovery Mechanism: Not automatic; requires customer engagement and agreement despite underlying contracts
Management Expectation: Return to previous year's EBITDA margin levels by end of FY27 if macroeconomic situation doesn't worsen

Ongoing Arbitrations: Two legal cases with TYC (Singapore courts tribunal) and OPmobility (Europe)
Claims: OPmobility claiming $66.4 million
Management Target: Striving to resolve both cases before end of FY27
Status: Claims and counterclaims exist; no provision made in Q2 for these disputes

Revenue Growth: Expect continued growth, particularly in e-mobility segment
Margin Improvement: Expected through customer recoveries, value engineering, localization, and cost productivity measures
Overseas Profitability: Romania business targeting EBITDA break-even by year-end
Thailand Plant: Four-wheel lighting plant expected to start production in mid-2027
Aftermarket Business: Expect return to historical growth levels (25%-35%) after current moderation

Mr. Tarang Jain – Chairman and Managing Director
Mr. Arjun Jain – Whole-Time Director and CEO, Business Unit I
Mr. Dhruv Jain – Whole-Time Director and CEO, Business Unit II
Mr. Mahendra Kumar – Group Chief Financial Officer
Mr. Bikash Dugar – Head, Investor Relations and Finance Controller of Business Unit II
Mr. Vishal Raval – Group Finance Controller, Business Unit I