Varroc Engineering Limited — PPTs, 12-11-2025: Investor Presentation

**Business Performance:** Varroc Engineering reported Q2 FY26 revenue of ₹2,207.3 Cr, up 6.1% YoY, primarily driven by 7.9% growth in India operations. H1 FY26 revenue reached ₹4,234.9 Cr (+6.4%). Q2 EBITDA was 9.1% (vs 9.7% YoY), impacted by higher sales of low-margin tools. Net Profit for Q2 was ₹63.3 Cr. H1 Net Profit stood at ₹170.7 Cr, partly benefiting from an exceptional gain. EV customers contributed 11% to Q2 revenue, despite a revenue impact of ~₹75 Cr from rare-earth magnet issues.

**Growth Drivers/Strategy:** The company is significantly boosting R&D investments in exterior lighting, ADAS, and intelligent cockpit across global centers, including China, to fuel future growth. IP ownership in India provides strategic tax benefits.

**Recent Developments:** Varroc secured new orders in H1 FY26 with an annual peak revenue of ₹892.8 Cr, over 63% from EV-related projects. They also filed 14+ new patents, increasing their total to over 130, and expanded with new facilities in Thailand and China.

**Key Financial Metrics:** Net debt significantly reduced to ₹380 Cr, with Net Debt/Equity at 0.22 and Net Debt/EBITDA at 0.47, indicating a stronger balance sheet. H1 FY26 Capex was ₹186 Cr.

**Management Commentary/Outlook:** Management highlights that current R&D and tooling costs, while affecting immediate margins, are vital investments for future revenue growth. They anticipate significant revenue growth from the overseas advanced electronics business starting Q2 FY27.