Tier-I auto component Varroc Engineering, reported revenue for Q3 FY19 at Rs 2,955 crore, a growth of 16.3 percent. While, PAT in the same period came to Rs 102 crore, down 12.7 percent YoY.
The company's revenue for the first nine months of the fiscal (April-December 2018) FY2019 came at Rs 8,883 crore, a growth of 20 percent YoY.
The company said the profitability for Q3 was impacted on the back of reduction in share in its JV in China to Rs 6.2 crore from Rs 27.8 crore in Q3 FY 2018. This was attributed to the drop in revenue by 37.7 percent from the JV due to lower volumes from key customers and significant decline in the overall market.
Another factor that affected the profits was higher effective tax rate in Q3 FY 2019 due to the higher share of profits from India business and timing difference for Czech tax credits.
According to Varroc Engineering, its revenue from China JV declined by 37.7 percent YoY to Rs 102.9 crore. Varroc has revealed that their Halol, Gujarat, Bulgaria plant and Brazil plant have started production. The first SOP for the Morocco plant is set for February 2019.
Tarang Jain, MD, Varroc Engineering commented, “Our results clearly showcase the improvements visible from operational efficiencies in the VLS business. The India business has sustained its performance with YoY margin improvement. Our EBITDA margins have improved by 140bps for the group. The macro challenges continue to impact some of our important markets. The effect of this was visible as our JV in China de-grew in the quarter and some of our VLS business customers reported weaker volume numbers. This situation may continue in the near future. However, we are confident of maintaining our growth momentum and deliver improvement in our results.”