Auto component manufacturer posts 8% annual revenue increase and generates Rs 3,116 crore free cash flow while reducing debt significantly.
29 May 2025 | 1753 Views | By Angitha Suresh
Varroc Engineering Ltd reported consolidated revenue of Rs 8,154 crore for FY25, representing an 8% increase from the previous year's Rs 7,552 crore. The company's board has recommended a dividend of Rs 1 per share, equivalent to 100% of face value, following what the management described as improved operational performance.
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Varroc Engineering Ltd reported consolidated revenue of Rs 8,154 crore for FY25, representing an 8% increase from the previous year's Rs 7,552 crore. The company's board has recommended a dividend of Rs 1 per share, equivalent to 100% of face value, following what the management described as improved operational performance.
The Pune-based automotive component manufacturer recorded a profit before tax of Rs 169 crore for the full year, compared to Rs 315 crore in FY24. However, the company noted that exceptional items worth Rs 147 crore impacted the current year's results, primarily related to structural changes including the merger of subsidiaries and exit from its China joint venture.
Excluding exceptional items, the company's profit before tax reached Rs 313 crore, or 3.8% of revenue, compared to 3.6% in the previous year. EBITDA margins remained relatively stable at 9.5% for FY25 against 10.1% in FY24.
The company generated free cash flow of Rs 312 crore during the year, equivalent to 3.8% of revenue. Net debt was reduced by Rs 235 crore, bringing the debt-to-equity ratio down to below 0.5 times from 0.64 times at the end of FY24. The absolute net debt figure stood at Rs 748 crore.
In the fourth quarter, Varroc posted revenue of Rs 2,099 crore, marking an 11% year-on-year growth on a like-to-like basis. The India operations grew 13% during this period. EBITDA for the quarter was 10.2% of revenue, while profit before tax before exceptional items reached Rs 103 crore or 4.9% of revenue.
Chairman and Managing Director Tarang Jain highlighted the company's innovation efforts, noting that 25 patents were filed during FY25 with more than 10 patents granted. The total patent filings now exceed 120. The company also completed the sale of its stake in the China joint venture, realizing net proceeds of RMB 290 million in May 2025.
Varroc achieved new business wins with annualized peak revenues of Rs 1,173 crore, with electric vehicle models constituting more than 55% of these wins. The company also expanded its renewable energy sourcing to 31% for FY25, up from 13% in the previous year, with March 2025 reaching 45%.
Established in 1988, Varroc Engineering is a tier-1 automotive component supplier that manufactures e-mobility solutions, body systems, lighting solutions, and advanced electronics for various vehicle segments. The company operates 37 manufacturing facilities globally supported by seven R&D centers and employs more than 6,100 people, including over 750 R&D engineers.
The automotive industry context shows mixed growth patterns, with two-wheelers growing 5.8% year-on-year, passenger vehicles up 5.2%, commercial vehicles rising 3.1%, and three-wheelers increasing 9.5% during Q4 FY25. However, concerns remain about consumption growth amid global conflicts and uncertain trade policies.