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Last Updated on: 23 November, 2024
Author: Getaka|Social: Getaka Financial Services X (Earlier Twitter) Profile Getaka Financial Services LinkedIn Logo

Varroc Engineering Ltd: Intrinsic Value and Fundamental Analysis

Share Price and Basic Stock Data

Last Updated: November 22, 2024, 9:20 pm

Market Cap 7,747 Cr.
Current Price 507
High / Low717/432
Stock P/E14.7
Book Value 105
Dividend Yield0.00 %
ROCE17.5 %
ROE41.9 %
Face Value 1.00
PEG Ratio0.11

Stock P/E, Current Price, and Intrinsic Value Over Time

View Share Price Target for Varroc Engineering Ltd

Competitors of Varroc Engineering Ltd

Stock NameMarket CapCurrent PriceHigh / LowStock P/EBook ValueDividend YieldROCEROEFace Value
Varroc Engineering Ltd 7,747 Cr. 507717/43214.7 1050.00 %17.5 %41.9 % 1.00
Uravi T and Wedge Lamps Ltd 496 Cr. 451670/254295 35.10.00 %10.2 %8.83 % 10.0
Lumax Industries Ltd 2,089 Cr. 2,2383,045/2,02016.8 7451.56 %17.2 %17.6 % 10.0
Industry Average3,444.00 Cr1,065.33108.83295.030.52%14.97%22.78%7.00

All Competitor Stocks of Varroc Engineering Ltd

Quarterly Result

MonthJun 2021Sep 2021Dec 2021Mar 2022Jun 2022Sep 2022Dec 2022Mar 2023Jun 2023Sep 2023Dec 2023Mar 2024Jun 2024
Sales1,1951,5091,4891,6521,6281,8341,7231,6991,8061,8871,8851,9751,899
Expenses1,3471,3951,4141,5471,5151,6901,5821,5341,6231,6931,7091,7541,725
Operating Profit-15211474105114144141165183194176221174
OPM %-13%8%5%6%7%8%8%10%10%10%9%11%9%
Other Income8-288-255-243-71-763421-91534126
Interest21253537384951534950504544
Depreciation69737984857782928085898280
Profit before tax-234-272-295-258-81-745114144747110556
Tax %-2%9%0%10%4%7%-91%3%23%25%-443%44%39%
Net Profit-229-297-295-285-84-795224034563845834
EPS in Rs-15.07-19.52-19.37-18.67-5.55-52.031.342.592.113.5525.053.722.12

Last Updated: Unknown

Quarterly Chart

Profit & Loss - Annual Report

Last Updated: Unknown

MonthMar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024TTM
Sales6,7707,9099,29910,27912,03611,1224,3745,8446,8917,5527,645
Expenses6,2067,3418,7169,39810,97810,3064,0365,4846,3166,7936,880
Operating Profit5645685828811,059816338360575759765
OPM %8%7%6%9%9%7%8%6%8%10%10%
Other Income2297317210812294-556-996-8216667
Interest475-4390869713989118190194189
Depreciation254292337386566732274305337337336
Profit before tax6339232751651939-581-1,059-773294306
Tax %73%6%4%13%17%94%8%5%6%-81%
Net Profit173703134514293-629-1,107-817532532
EPS in Rs16.06353.36254.2936.5731.540.01-41.36-72.64-53.6634.4334.44
Dividend Payout %16%1%13%1%14%21,284%0%0%0%0%

Profit & Loss Yearly Chart

YoY Net Profit Growth

Year2015-20162016-20172017-20182018-20192019-20202020-20212021-20222022-20232023-2024
YoY Net Profit Growth (%)2076.47%-15.41%44.09%-4.88%-99.30%-21066.67%-75.99%26.20%165.12%
Change in YoY Net Profit Growth (%)0.00%-2091.88%59.49%-48.97%-94.42%-20967.37%20990.67%102.19%138.92%

Varroc Engineering Ltd has shown an inconsistent trend in YoY Net Profit Growth (%) in the last 9 years from 2015-2016 to 2023-2024.

Growth

Compounded Sales Growth
10 Years:%
5 Years:-9%
3 Years:20%
TTM:10%
Compounded Profit Growth
10 Years:%
5 Years:4%
3 Years:41%
TTM:217%
Stock Price CAGR
10 Years:%
5 Years:2%
3 Years:19%
1 Year:-10%
Return on Equity
10 Years:%
5 Years:-18%
3 Years:-27%
Last Year:42%

Last Updated: Unknown

Balance Sheet

Last Updated: November 14, 2024, 6:36 pm

MonthMar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024Sep 2024
Equity Capital1010111213131515151515
Reserves1,0731,7372,1722,8153,0532,9913,0131,9739611,4821,592
Borrowings1,6511,6171,5101,1942,4324,2553,6951,6251,8061,3901,204
Other Liabilities1,6951,8692,1542,7803,1423,6444,3697,3751,8321,6431,917
Total Liabilities4,4285,2335,8476,8028,64110,90411,09210,9894,6144,5304,729
Fixed Assets2,0542,3902,3962,8043,5605,2835,2312,0462,0512,0271,995
CWIP1783152933449997908561401358061
Investments2212293360362330376388421530504
Other Assets2,1742,5152,8673,2943,7204,5004,6298,4162,0071,8932,169
Total Assets4,4285,2335,8476,8028,64110,90411,09210,9894,6144,5304,729

Reserves and Borrowings Chart

Cash Flow

MonthMar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024
Cash from Operating Activity +1282906761,0754741,414474636686638
Cash from Investing Activity +-286-575-577-545-1,769-1,259-613-762-448-166
Cash from Financing Activity +7038694-5231,129733-152-335-216-664
Net Cash Flow-871011936-166888-292-46122-192

Free Cash Flow

MonthMar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024
Free Cash Flow563.00567.00581.00880.00-1.00812.00335.00359.00574.00758.00

Free Cash Flow = Income Generated from Operational Activities - Borrowings - Capital Work in Progress (CWIP)

Consistent positive free cash flow is crucial for businesses as it indicates their ability to generate cash from their core operations. It provides financial flexibility, allowing companies to invest in growth opportunities, pay dividends to shareholders, reduce debt, and weather economic downturns more effectively.

Free Cash Flow Chart

Financial Efficiency Indicators

MonthMar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024
Debtor Days585545504136137323224
Inventory Days514946494356164585552
Days Payable909294114991243961279994
Cash Conversion Cycle1912-3-15-15-32-95-36-12-19
Working Capital Days22217-4-13-38-3865-11-5
ROCE %11%12%16%13%3%3%2%8%17%

Financial Efficiency Indicators Chart

Share Holding Pattern

MonthDec 2021Mar 2022Jun 2022Sep 2022Dec 2022Mar 2023Jun 2023Sep 2023Dec 2023Mar 2024Jun 2024Sep 2024
Promoters75.00%75.00%75.00%75.00%75.00%75.00%75.00%75.00%75.00%75.00%75.00%75.00%
FIIs3.48%3.92%3.28%3.51%4.67%5.04%5.07%5.00%4.57%4.22%4.24%3.80%
DIIs14.18%14.92%15.07%14.31%12.23%12.02%12.21%12.43%11.44%12.15%12.74%12.65%
Public7.34%6.16%6.65%7.18%8.11%7.94%7.73%7.58%8.99%8.64%8.04%8.54%
No. of Shareholders68,09068,08280,83178,87785,62387,12684,43381,78988,08086,73889,54999,500

Shareholding Pattern Chart

No. of Shareholders

Mutual Fund Holdings

Fund NameNo of SharesAUM (%)Amount Invested (Cr)Previous Number of SharesPrevious DatePercentage Change
Nippon India Focused Equity Fund4,002,5382.86222.323,038,6542024-11-2031.72%
HDFC Flexi Cap Fund - Regular Plan3,500,0000.41194.413,038,6542024-11-2015.18%
Nippon India Multi Cap Fund3,038,6540.66168.783,038,6542024-11-200%
Mahindra Manulife Small Cap Fund859,5611.3647.743,038,6542024-11-20-71.71%
Tata ELSS Tax Saver Fund740,0001.0341.13,038,6542024-11-20-75.65%
HSBC ELSS Tax saver Fund673,8001.0337.433,038,6542024-11-20-77.83%
HDFC Multi Cap Fund496,0800.2327.553,038,6542024-11-20-83.67%
HSBC Aggressive Hybrid Fund302,8000.3316.823,038,6542024-11-20-90.04%
Mahindra Manulife Consumption Fund56,0002.293.113,038,6542024-11-20-98.16%
Nippon India Nifty Smallcap 250 Index Fund27,1570.141.513,038,6542024-11-20-99.11%

ROCE Trend

EPS Trend

Key Financial Ratios

MonthMar 24Mar 23Mar 22Mar 21Mar 20
FaceValue1.001.001.001.001.00
Basic EPS (Rs.)34.43-53.66-72.64-46.750.01
Diluted EPS (Rs.)34.43-53.66-72.64-46.750.01
Cash EPS (Rs.)53.96-31.79-52.4715.1155.15
Book Value[Excl.RevalReserv]/Share (Rs.)99.8965.72131.82200.02224.72
Book Value[Incl.RevalReserv]/Share (Rs.)99.8965.72131.82200.02224.72
Revenue From Operations / Share (Rs.)494.27449.18382.50739.76825.00
PBDIT / Share (Rs.)52.4339.5725.7434.2968.22
PBIT / Share (Rs.)30.3917.535.81-24.2913.93
PBT / Share (Rs.)17.705.07-1.94-41.993.61
Net Profit / Share (Rs.)31.92-53.83-72.41-43.480.86
NP After MI And SOA / Share (Rs.)34.43-53.66-72.64-41.360.01
PBDIT Margin (%)10.608.806.724.638.26
PBIT Margin (%)6.143.901.51-3.281.68
PBT Margin (%)3.581.12-0.50-5.670.43
Net Profit Margin (%)6.45-11.98-18.92-5.870.10
NP After MI And SOA Margin (%)6.96-11.94-18.99-5.590.00
Return on Networth / Equity (%)35.13-83.98-55.80-20.860.00
Return on Capital Employeed (%)19.3315.333.51-7.323.75
Return On Assets (%)11.53-17.74-10.09-5.620.00
Long Term Debt / Equity (X)0.430.420.120.300.29
Total Debt / Equity (X)0.801.670.780.580.86
Asset Turnover Ratio (%)1.650.550.420.350.44
Current Ratio (X)0.780.610.980.690.69
Quick Ratio (X)0.470.380.900.490.51
Inventory Turnover Ratio (X)7.055.202.762.522.67
Dividend Payout Ratio (NP) (%)0.000.000.000.0059563.87
Dividend Payout Ratio (CP) (%)0.000.000.000.0015.54
Earning Retention Ratio (%)0.000.000.000.00-59463.87
Cash Earning Retention Ratio (%)0.000.000.000.0084.46
Interest Coverage Ratio (X)4.133.183.323.226.61
Interest Coverage Ratio (Post Tax) (X)3.621.180.34-2.421.08
Enterprise Value (Cr.)8769.125142.596749.786612.313302.59
EV / Net Operating Revenue (X)1.160.741.150.580.29
EV / EBITDA (X)10.958.5117.1612.623.59
MarketCap / Net Operating Revenue (X)1.010.550.900.490.15
Retention Ratios (%)0.000.000.000.00-59463.87
Price / BV (X)5.123.902.661.840.58
Price / Net Operating Revenue (X)1.010.550.900.490.15
EarningsYield0.06-0.21-0.20-0.110.00

Profitability Ratios (%)

Liquidity Ratios

Liquidity Ratios (%)

Interest Coverage Ratios (%)

Valuation Ratios

Fair Value

Fair Value of Varroc Engineering Ltd as of November 23, 2024 is: 659.66

Calculation basis:

  • Fair value = P/E Ratio * (Return on Equity / 100) * Book Value * (1 + Dividend Yield / 100)
  • P/E Ratio (Price-to-Earnings Ratio): Represents the price of the stock relative to its earnings per share. A higher P/E ratio indicates that investors are willing to pay a higher price for the stock.
  • Return on Equity (ROE): Measures a company's profitability relative to its shareholder equity. It showcases the company's ability to generate profits using the investment made by its shareholders, offering valuable insight into its operational efficiency and financial performance.
  • Book Value: Represents the net asset value of the company per share. It is calculated as the total assets minus intangible assets and liabilities, divided by the number of outstanding shares.
  • Dividend Yield: The ratio of the annual dividend per share to the current market price per share. It offers valuable insights into the profitability of an investment through dividends.

This formula allows us to gauge the fair value of the stock by analyzing its fundamental indicators.

As of November 23, 2024, Varroc Engineering Ltd is Undervalued by 30.11% compared to the current share price 507.00

Intrinsic Value of Varroc Engineering Ltd as of November 23, 2024 is: 1,571.78

Calculation basis:

  • Intrinsic value = P/E Ratio * (Return on Equity / 100) * Book Value * (1 + Dividend Yield / 100) * (1 + EPS CAGR for Last 5 Years)
  • P/E Ratio (Price-to-Earnings Ratio): Represents the price of the stock relative to its earnings per share. A higher P/E ratio indicates that investors are willing to pay a higher price for the stock.
  • Return on Equity (ROE): Measures a company's profitability relative to its shareholder equity. It showcases the company's ability to generate profits using the investment made by its shareholders, offering valuable insight into its operational efficiency and financial performance.
  • Book Value: Represents the net asset value of the company per share. It is calculated as the total assets minus intangible assets and liabilities, divided by the number of outstanding shares.
  • Dividend Yield: The ratio of the annual dividend per share to the current market price per share. It offers valuable insights into the profitability of an investment through dividends.
  • EPS CAGR (Compound Annual Growth Rate): Represents the geometric mean growth rate of earnings per share over the last 5 years. It provides insight into the historical growth trajectory of the company's earnings.

This formula allows us to gauge the intrinsic value of the stock by analyzing its fundamental indicators along with EPS growth.

As of November 23, 2024, Varroc Engineering Ltd is Undervalued by 210.02% compared to the current share price 507.00

Last 5 Year EPS CAGR: 138.27%

*Investments are subject to market risks

Strength and Weakness

StrengthWeakness
  1. The stock has a low average Working Capital Days of 0.60, which is a positive sign.
  2. The stock has a low average Cash Conversion Cycle of -19.60, which is a positive sign.
  3. The company has higher reserves (2,078.36 cr) compared to borrowings (2,034.45 cr), indicating strong financial stability.
  4. The company has shown consistent growth in sales (7.64 cr) and profit (100.09 cr) over the years.
  1. The stock has a low average ROCE of 8.50%, which may not be favorable.

Stock Analysis

  • Considering all of the following key financial indicators, prospective investors are encouraged to conduct thorough research and seek professional guidance before considering any investment in Varroc Engineering Ltd:
    1. Net Profit Margin: 6.45%
      • Net Profit Margin: This metric indicates the percentage of profit a company makes from its total revenue. A higher net profit margin is generally desirable as it reflects better profitability.
    2. ROCE: 19.33% (Industry Average ROCE: 14.97%)
      • ROCE (Return on Capital Employed): ROCE measures a company's profitability and the efficiency with which its capital is employed. A higher ROCE indicates efficient use of capital.
    3. ROE%: 35.13% (Industry Average ROE: 22.78%)
      • ROE (Return on Equity): ROE measures a company's profitability relative to shareholders' equity. A higher ROE indicates efficient use of shareholders' funds.
    4. Interest Coverage Ratio (Post Tax): 3.62
      • Interest Coverage Ratio: The interest coverage ratio measures a company's ability to cover its interest payments on outstanding debt. A ratio greater than 2 is generally considered healthy as it indicates the company can meet its interest obligations comfortably.
    5. Quick Ratio: 0.47
      • Quick Ratio: The quick ratio assesses a company's ability to cover its short-term liabilities with its most liquid assets. A ratio higher than 1 suggests the company can meet its short-term obligations without relying heavily on inventory.
    6. Stock P/E: 14.7 (Industry average Stock P/E: 108.83)
      • Stock P/E (Price-to-Earnings) Ratio: The P/E ratio compares a company's current share price to its earnings per share. A lower P/E ratio relative to industry peers or historical values may indicate that the stock is undervalued.
    7. Total Debt / Equity: 0.8
      • Total Debt / Equity: This ratio measures a company's financial leverage by comparing its total debt to its total equity. A lower ratio indicates lower financial risk and greater financial stability.
    The current analysis is available for review. It's important to conduct thorough research and consider consulting with financial professionals before making any investment decisions.
    Stock Rating:

About the Company - Qualitative Analysis

Varroc Engineering Ltd. is a Public Limited Listed company incorporated on 11/05/1988 and has its registered office in the State of Maharashtra, India. Company’s Corporate Identification Number(CIN) is L28920MH1988PLC047335 and registration number is 047335. Currently company belongs to the Industry of Auto Ancl - Equipment Lamp. Company’s Total Operating Revenue is Rs. 3291.81 Cr. and Equity Capital is Rs. 15.28 Cr. for the Year ended 31/03/2022.
INDUSTRYADDRESSCONTACT
Auto Ancl - Equipment LampPlot No. L-4, MIDC, Aurangabad District Maharashtra 431136investors@varroc.com
http://www.varroc.com
Management
NamePosition Held
Mr. Tarang JainChairman & Managing Director
Mr. Arjun JainDirector & CEO
Mr. Dhruv JainDirector & CEO
Mr. Tarun TyagiWhole Time Director
Mr. Gautam P KhandelwalIndependent Director
Mr. Marc SzulewiczIndependent Director
Mrs. Vijaya SampathIndependent Director
Mr. Vinish KathuriaIndependent Director

FAQ

What is the latest intrinsic value of Varroc Engineering Ltd?

The latest intrinsic value of Varroc Engineering Ltd as on 23 November 2024 is ₹659.66, which is 30.11% higher than the current market price of ₹507.00.

What is the Market Cap of Varroc Engineering Ltd?

The Market Cap of Varroc Engineering Ltd is 7,747 Cr..

What is the current Stock Price of Varroc Engineering Ltd as on 23 November 2024?

The current stock price of Varroc Engineering Ltd as on 23 November 2024 is 507.

What is the High / Low of Varroc Engineering Ltd stocks in FY 2024?

In FY 2024, the High / Low of Varroc Engineering Ltd stocks is 717/432.

What is the Stock P/E of Varroc Engineering Ltd?

The Stock P/E of Varroc Engineering Ltd is 14.7.

What is the Book Value of Varroc Engineering Ltd?

The Book Value of Varroc Engineering Ltd is 105.

What is the Dividend Yield of Varroc Engineering Ltd?

The Dividend Yield of Varroc Engineering Ltd is 0.00 %.

What is the ROCE of Varroc Engineering Ltd?

The ROCE of Varroc Engineering Ltd is 17.5 %.

What is the ROE of Varroc Engineering Ltd?

The ROE of Varroc Engineering Ltd is 41.9 %.

What is the Face Value of Varroc Engineering Ltd?

The Face Value of Varroc Engineering Ltd is 1.00.

About the Author

Author Avatar
Getaka

Getaka, CFA, a financial analyst with 15 years of experience in the industry. Getaka holds an MBA degree and the Chartered Financial Analyst designation, demonstrating his profound understanding of financial analysis and investment management. Throughout his career, he has conducted numerous financial analyses and due diligence processes for companies in the industry, and has a strong track record of identifying key trends and opportunities. He leverages his expertise to deliver a thorough financial analysis of a company, encompassing its financial performance, key ratios, future prospects, and risks. Getaka is committed to providing accurate, reliable, and trustworthy information to help readers make informed decisions about their finances and investments.

Disclaimer: This article is for informational purposes only and should not be construed as financial advice. The author is not a SEBI registered financial advisor and does not have any vested interest in Varroc Engineering Ltd. Investors are advised to conduct their own due diligence and consult with a financial professional before making any investment decisions. The information provided in this article is based on publicly available data and the author's analysis, but it may not be comprehensive or up-to-date. The author and getaka.co.in are not responsible for any errors or omissions in the content. This article is not intended to promote any particular investment strategy or recommendation, and readers should consult with their own financial advisors before making any investment decisions. Data Source: NSE