Varroc Engineering tumbles 10% on lackluster Q4 result

VLS EBITDA margins were adversely impacted mainly by Semi-conductor shortages and poor revenue mix.

Jun 07, 2021 12:06 IST India Infoline News Service

Varroc Engineering Ltd, a global tier-I auto component group, has announced its results for the quarter ended 31st March, 2021.

Performance at a glance:
  • Revenue from Operations for the quarter increased by 32% yoy to Rs36.2 billion; India business revenue growth at 44.6% yoy and VLS at 13.7% yoy (in Euro)
  • Consolidated EBITDA for the quarter at Rs 1,275 million increased by 11% yoy; India EBITDA margins improved by 360 bps while VLS EBITDA margins were adversely impacted mainly by Semi-conductor shortages and poor revenue mix
  • Net Debt reduced to Rs22.5 billion from Rs27.3 billion at end-December 20, and as compared to Rs34.1 billion at end-June 20, partly helped by QIP proceeds
Tarang Jain, MD, Varroc Engineering Ltd. commented, “We have seen a strong recovery in Two-wheeler and Passenger Vehicle volumes across in India in Q4 FY21. The global (Ex China) passenger vehicle volumes in Q4 FY21 declined mainly due to severe semi-conductor shortages. As the current demand for chips is continuing to outstrip supply, suppliers are adding capacities.

This additional capacity is expected to help meet auto sector demand starting end of Q2 FY22. During this challenging external environment, our focus will be to steadily improve the margins in our VLS business on a sustainable basis in the coming quarters. In this direction, we have launched project RACE to bring VLS profitability in line with industry benchmarks.”

At around 12:25 PM, Varroc Engineering was trading at Rs389.60 apiece down by Rs43.45 or 10.03% on Sensex.

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