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Last Updated on: 22 February, 2024|Author: Getaka | Social: X Twitter Profile

Fundamental Analysis of Varroc Engineering Ltd

About the Company - Varroc Engineering Ltd

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, Industrial Area Aurangabad District Maharashtra 431136varroc.info@varroc.com
http://www.varroc.com
Management
NamePosition Held
Mr. Tarang JainChairman & Managing Director
Mr. Rohit PrakashWhole Time Director
Mr. Arjun JainWhole Time Director
Mr. Gautam P KhandelwalIndependent Director
Mr. Marc SzulewiczIndependent Director
Mrs. Vijaya SampathIndependent Director
Mr. Vinish KathuriaIndependent Director
Mr. Dhruv JainNon Exe.Non Ind.Director
Mr. Tarun TyagiWhole Time Director

Varroc Engineering Ltd. Share Price Update

Share PriceValue
Today₹510.50
Previous Day₹525.95

Basic Stock Data of Varroc Engineering Ltd

Market Cap 7,860 Cr.
Current Price 514
High / Low632/239
Stock P/E14.9
Book Value 67.7
Dividend Yield0.00 %
ROCE8.13 %
ROE55.9 %
Face Value 1.00

Data Source: screener.in

Competitors of Varroc Engineering Ltd

Stock NameMarket CapCurrent PriceHigh / LowStock P/EBook ValueDividend YieldROCEROEFace Value
Uravi T and Wedge Lamps Ltd 329 Cr. 299359/93.0270 22.40.00 %7.43 %3.82 % 10.0
Industry Average329 Cr29927022.40%7.43%3.82%10

Varroc Engineering Ltd Quarterly Results

MonthDec 2020Mar 2021Jun 2021Sep 2021Dec 2021Mar 2022Jun 2022Sep 2022Dec 2022Mar 2023Jun 2023Sep 2023Dec 2023
Sales3,4931,5041,1951,5091,4891,6521,6281,8341,7231,6901,8061,8871,885
Expenses3,2661,5671,3471,3951,4141,5471,5151,6901,5821,5341,6231,6931,709
Operating Profit226-63-15211474105114144141156183194176
OPM %6%-4%-13%8%5%6%7%8%8%9%10%10%9%
Other Income-77418-288-255-243-71-763430-91534
Interest38232125353738495153495050
Depreciation225696973798485778292808589
Profit before tax-113-114-234-272-295-258-81-7451141447471
Tax %-21%-27%2%-9%-0%-10%-4%-7%-91%3%23%25%-443%
Net Profit-137-144-229-297-295-285-84-79522403456384
EPS in Rs-10.29-9.52-15.07-19.52-19.37-18.67-5.55-52.031.342.592.113.5525.05

Varroc Engineering Ltd Quarterly Chart

Varroc Engineering Ltd Profit & Loss

MonthMar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023TTM
Sales6,7707,9099,29910,27912,03611,1224,3745,8446,8637,267
Expenses6,2067,3418,7169,39810,97810,3064,0365,4846,3166,558
Operating Profit5645685828811,059816338360547709
OPM %8%7%6%9%9%7%8%6%8%10%
Other Income2297317210812294-556-996-79369
Interest475-4390869713989118190201
Depreciation254292337386566732274305337346
Profit before tax6339232751651939-581-1,059-773230
Tax %73%6%4%13%17%94%-8%-5%-6%
Net Profit173703134514293-629-1,107-817514
EPS in Rs16.06353.36254.2936.5731.540.01-41.36-72.64-53.6633.30
Dividend Payout %16%1%13%1%14%21,284%0%0%0%

Varroc Engineering Ltd Profit & Loss Yearly Chart

YoY Net Profit Growth
Year2015-20162016-20172017-20182018-20192019-20202020-20212021-20222022-2023
YoY Net Profit Growth (%)2076.47%-15.41%44.09%-4.88%-99.30%-21066.67%-75.99%26.20%
Change in YoY Net Profit Growth (%)0.00%-2091.88%59.49%-48.97%-94.42%-20967.37%20990.67%102.19%

Varroc Engineering Ltd Growth

Compounded Sales Growth
10 Years:%
5 Years:-8%
3 Years:-15%
TTM:6%
Compounded Profit Growth
10 Years:%
5 Years:%
3 Years:%
TTM:1603%
Stock Price CAGR
10 Years:%
5 Years:-3%
3 Years:9%
1 Year:103%
Return on Equity
10 Years:%
5 Years:-17%
3 Years:-37%
Last Year:-56%

Varroc Engineering Ltd Balance Sheet

MonthMar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Sep 2023
Equity Capital10101112131315151515
Reserves1,0731,7372,1722,8153,0532,9913,0131,9739611,019
Preference Capital0172100000
Borrowings1,6511,6001,5081,1932,4324,2553,6951,6251,8061,442
Other Liabilities1,6951,8862,1562,7823,1423,6444,3697,3751,8321,872
Total Liabilities4,4285,2335,8476,8028,64110,90411,09210,9894,6144,349
Fixed Assets2,0542,3902,3962,8043,5605,2835,2312,0462,0512,064
CWIP17831529334499979085614013579
Investments2212293360362330376388421396
Other Assets2,1742,5152,8673,2943,7204,5004,6298,4162,0071,810
Total Assets4,4285,2335,8476,8028,64110,90411,09210,9894,6144,349

Varroc Engineering Ltd Reserves and Borrowings Chart

Varroc Engineering Ltd Cash Flow

MonthMar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023
Cash from Operating Activity 1282906761,0754741,414474636661
Cash from Investing Activity -286-575-577-545-1,769-1,259-613-762-422
Cash from Financing Activity 7038694-5231,129733-152-335-216
Net Cash Flow-871011936-166888-292-46122

Varroc Engineering Ltd Financial Efficiency Indicators

MonthMar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023
Debtor Days5855455041361373232
Inventory Days5149464943561645855
Days Payable9092941149912439612799
Cash Conversion Cycle1912-3-15-15-32-95-36-12
Working Capital Days22217-4-13-38-3865-11
ROCE %11%12%16%13%3%3%2%8%

Varroc Engineering Ltd Financial Efficiency Indicators Chart

Varroc Engineering Ltd Share Holding Pattern

MonthMar 2021Jun 2021Sep 2021Dec 2021Mar 2022Jun 2022Sep 2022Dec 2022Mar 2023Jun 2023Sep 2023Dec 2023
Promoters75.00%75.00%75.00%75.00%75.00%75.00%75.00%75.00%75.00%75.00%75.00%75.00%
FIIs5.21%4.91%4.00%3.48%3.92%3.28%3.51%4.67%5.04%5.07%5.00%4.57%
DIIs14.69%14.31%13.82%14.18%14.92%15.07%14.31%12.23%12.02%12.21%12.43%11.44%
Public5.10%5.78%7.18%7.34%6.16%6.65%7.18%8.11%7.94%7.73%7.58%8.99%
No. of Shareholders54,49266,81570,82768,09068,08280,83178,87785,62387,12684,43381,78988,080

Varroc Engineering Ltd Shareholding Pattern Chart

No. of Varroc Engineering Ltd Shareholders

Varroc Engineering Ltd Mutual Fund Holdings

Fund NameNo of SharesAUM (%)Amount Invested (Cr)
Nippon India Focused Equity Fund40025382.86222.32
HDFC Flexi Cap Fund - Regular Plan35000000.41194.41
Nippon India Multi Cap Fund30386540.66168.78
Mahindra Manulife Small Cap Fund8595611.3647.74
Tata ELSS Tax Saver Fund7400001.0341.1
HSBC ELSS Tax saver Fund6738001.0337.43
HDFC Multi Cap Fund4960800.2327.55
HSBC Aggressive Hybrid Fund3028000.3316.82
Mahindra Manulife Consumption Fund560002.293.11
Nippon India Nifty Smallcap 250 Index Fund271570.141.51

Varroc Engineering Ltd ROCE Trend

Varroc Engineering Ltd EPS Trend

Varroc Engineering Ltd Key Financial Ratios

MonthMar 23Mar 22Mar 21Mar 20Mar 19
FaceValue1.001.001.001.001.00
Basic EPS (Rs.)-53.66-72.64-46.750.0131.54
Diluted EPS (Rs.)-53.66-72.64-46.750.0131.54
Cash EPS (Rs.)-31.79-52.4715.1155.1571.42
Book Value[Excl.RevalReserv]/Share (Rs.)65.72131.82200.02224.72229.25
Book Value[Incl.RevalReserv]/Share (Rs.)65.72131.82200.02224.72229.25
Revenue From Operations / Share (Rs.)449.18382.50739.76825.00892.85
PBDIT / Share (Rs.)39.5725.7434.2968.2285.27
PBIT / Share (Rs.)17.535.81-24.2913.9343.31
PBT / Share (Rs.)5.07-1.94-41.993.6136.13
Net Profit / Share (Rs.)-53.83-72.41-43.480.8629.47
NP After MI And SOA / Share (Rs.)-53.66-72.64-41.360.0131.54
PBDIT Margin (%)8.806.724.638.269.55
PBIT Margin (%)3.901.51-3.281.684.85
PBT Margin (%)1.12-0.50-5.670.434.04
Net Profit Margin (%)-11.98-18.92-5.870.103.30
NP After MI And SOA Margin (%)-11.94-18.99-5.590.003.53
Return on Networth / Equity (%)-83.98-55.80-20.860.0013.86
Return on Capital Employeed (%)15.333.51-7.323.7514.73
Return On Assets (%)-17.74-10.09-5.620.004.86
Long Term Debt / Equity (X)0.420.120.300.290.14
Total Debt / Equity (X)1.670.780.580.860.54
Asset Turnover Ratio (%)0.550.420.350.440.57
Current Ratio (X)0.610.980.690.690.69
Quick Ratio (X)0.380.900.490.510.51
Inventory Turnover Ratio (X)5.202.762.522.673.12
Dividend Payout Ratio (NP) (%)0.000.000.0059563.870.19
Dividend Payout Ratio (CP) (%)0.000.000.0015.540.08
Earning Retention Ratio (%)0.000.000.00-59463.8799.81
Cash Earning Retention Ratio (%)0.000.000.0084.4699.92
Interest Coverage Ratio (X)3.183.323.226.6111.87
Interest Coverage Ratio (Post Tax) (X)1.180.34-2.421.085.10
Enterprise Value (Cr.)5142.596749.786612.313302.599346.43
EV / Net Operating Revenue (X)0.741.150.580.290.77
EV / EBITDA (X)8.5117.1612.623.598.13
MarketCap / Net Operating Revenue (X)0.550.900.490.150.65
Retention Ratios (%)0.000.000.00-59463.8799.80
Price / BV (X)3.902.661.840.582.55
Price / Net Operating Revenue (X)0.550.900.490.150.65
EarningsYield-0.21-0.20-0.110.000.05

Varroc Engineering Ltd Profitability Ratios (%)

Varroc Engineering Ltd Liquidity Ratios

Varroc Engineering Ltd Liquidity Ratios (%)

Varroc Engineering Ltd Interest Coverage Ratios (X)

Varroc Engineering Ltd Valuation Ratios

Fair Value / Intrinsic Value of Varroc Engineering Ltd

Fair Value: ₹575.16

The stock is undervalued by 11.90% compared to the current price ₹514

*Investments are subject to market risks

Strength and Weakness of Varroc Engineering Ltd

StrengthWeakness
  1. The stock has a low average Working Capital Days of 1.22, which is a positive sign.
  2. The stock has a low average Cash Conversion Cycle of -19.67, which is a positive sign.
  3. The company has higher reserves (2,080.70 cr) compared to borrowings (2.00 cr), indicating strong financial stability.
  4. The company has shown consistent growth in sales (7.70 cr) and profit (73.10 cr) over the years.
  1. The stock is trading at a high valuation with an average P/B ratio of 11.26 and average Dividend Yield of 1.73%.
  2. The stock has a low average ROCE of 7.56%, which may not be favorable.

Should I Buy Varroc Engineering Ltd Share Now?

  • Considering various financial indicators, investors might exercise caution regarding investment in Varroc Engineering Ltd:
    1. Net Profit Margin: -11.98%
      • 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: 15.33% (Industry Average ROCE: 7.43%)
      • 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. Interest Coverage Ratio (Post Tax): 1.18
      • 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.
    4. Quick Ratio: 0.38
      • 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.
    5. ✓ Stock P/E: 15.2 (Industry average Stock P/E: 268)
      • 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.
    6. ✗ Total Debt / Equity: 1.67
      • 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 suggests exercising caution. It's advisable to conduct further research or consult with financial experts before considering any investment.

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