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Last Updated on: 23 June, 2024|Author: Getaka | Social: X Twitter Profile

Fundamental Analysis of Varroc Engineering Ltd

Basic Stock Data

Last Updated: June 22, 2024, 10:19 pm

Market Cap 10,127 Cr.
Current Price 663
High / Low717/319
Stock P/E18.5
Book Value 98.0
Dividend Yield0.00 %
ROCE17.8 %
ROE44.2 %
Face Value 1.00
PEG Ratio0.05

Competitors of Varroc Engineering Ltd

Stock NameMarket CapCurrent PriceHigh / LowStock P/EBook ValueDividend YieldROCEROEFace Value
Uravi T and Wedge Lamps Ltd 655 Cr. 595611/186307 23.20.00 %9.86 %8.70 % 10.0
Lumax Industries Ltd 2,637 Cr. 2,8202,929/1,98523.8 7180.96 %17.2 %17.7 % 10.0
Industry Average1,646.00 Cr1,707.50165.40370.600.48%13.53%13.20%10.00

Quarterly Result

MonthMar 2021Jun 2021Sep 2021Dec 2021Mar 2022Jun 2022Sep 2022Dec 2022Mar 2023Jun 2023Sep 2023Dec 2023Mar 2024
Sales1,5041,1951,5091,4891,6521,6281,8341,7231,6991,8061,8871,8851,975
Expenses1,5671,3471,3951,4141,5471,5151,6901,5821,5341,6231,6931,7091,754
Operating Profit-63-15211474105114144141165183194176221
OPM %-4%-13%8%5%6%7%8%8%10%10%10%9%11%
Other Income418-288-255-243-71-763421-9153412
Interest23212535373849515349505045
Depreciation69697379848577829280858982
Profit before tax-114-234-272-295-258-81-7451141447471105
Tax %-27%2%-9%-0%-10%-4%-7%-91%3%23%25%-443%44%
Net Profit-144-229-297-295-285-84-7952240345638458
EPS in Rs-9.52-15.07-19.52-19.37-18.67-5.55-52.031.342.592.113.5525.053.72

Last Updated: June 9, 2024, 11:27 pm

Quarterly Chart

Profit & Loss - Annual Report

Last Updated: May 26, 2024, 7:16 pm

MonthMar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024
Sales6,7707,9099,29910,27912,03611,1224,3745,8446,8637,552
Expenses6,2067,3418,7169,39810,97810,3064,0365,4846,3166,778
Operating Profit5645685828811,059816338360547774
OPM %8%7%6%9%9%7%8%6%8%10%
Other Income2297317210812294-556-996-79351
Interest475-4390869713989118190194
Depreciation254292337386566732274305337337
Profit before tax6339232751651939-581-1,059-773294
Tax %73%6%4%13%17%94%-8%-5%-6%-81%
Net Profit173703134514293-629-1,107-817532
EPS in Rs16.06353.36254.2936.5731.540.01-41.36-72.64-53.6634.43
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%

Growth

Compounded Sales Growth
10 Years:%
5 Years:-9%
3 Years:20%
TTM:10%
Compounded Profit Growth
10 Years:%
5 Years:5%
3 Years:42%
TTM:166%
Stock Price CAGR
10 Years:%
5 Years:9%
3 Years:22%
1 Year:107%
Return on Equity
10 Years:%
5 Years:-18%
3 Years:-27%
Last Year:44%

Last Updated: June 16, 2024, 4:47 pm

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

Reserves and Borrowings Chart

Cash Flow

MonthMar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024
Cash from Operating Activity 1282906761,0754741,414474636661638
Cash from Investing Activity -286-575-577-545-1,769-1,259-613-762-422-166
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 Flow564.00551.00580.00880.001.00816.00338.00360.00547.00774.00

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 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%

Financial Efficiency Indicators Chart

Share Holding Pattern

MonthJun 2021Sep 2021Dec 2021Mar 2022Jun 2022Sep 2022Dec 2022Mar 2023Jun 2023Sep 2023Dec 2023Mar 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%
FIIs4.91%4.00%3.48%3.92%3.28%3.51%4.67%5.04%5.07%5.00%4.57%4.22%
DIIs14.31%13.82%14.18%14.92%15.07%14.31%12.23%12.02%12.21%12.43%11.44%12.15%
Public5.78%7.18%7.34%6.16%6.65%7.18%8.11%7.94%7.73%7.58%8.99%8.64%
No. of Shareholders66,81570,82768,09068,08280,83178,87785,62387,12684,43381,78988,08086,738

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 Fund4,002,5382.86222.3256,0002024-06-197047.39%
HDFC Flexi Cap Fund - Regular Plan3,500,0000.41194.4156,0002024-06-196150%
Nippon India Multi Cap Fund3,038,6540.66168.7856,0002024-06-195326.17%
Mahindra Manulife Small Cap Fund859,5611.3647.7456,0002024-06-191434.93%
Tata ELSS Tax Saver Fund740,0001.0341.156,0002024-06-191221.43%
HSBC ELSS Tax saver Fund673,8001.0337.4356,0002024-06-191103.21%
HDFC Multi Cap Fund496,0800.2327.5556,0002024-06-19785.86%
HSBC Aggressive Hybrid Fund302,8000.3316.8256,0002024-06-19440.71%
Mahindra Manulife Consumption Fund56,0002.293.1156,0002024-06-190%
Nippon India Nifty Smallcap 250 Index Fund27,1570.141.5156,0002024-06-19-51.51%

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: 817.37

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.

Undervalued: 23.28% compared to the current price 663

Intrinsic Value: 4,166.85

Calculation basis:

  • Fair 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 fair value of the stock by analyzing its fundamental indicators along with EPS growth.

Undervalued: 528.48% compared to the current price ₹663

Last 5 Year EPS CAGR: 409.79%

*Investments are subject to market risks

Strength and Weakness

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 (2,127.00 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 (79.50 cr) over the years.
  1. The stock has a low average ROCE of 7.56%, 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: %)
      • 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: %)
      • 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: 18.5 (Industry average Stock P/E: )
      • 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: 0.80
      • 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

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

FAQ

What is the latest fair value of Varroc Engineering Ltd?

The latest fair value of Varroc Engineering Ltd is ₹817.37.

What is the Market Cap of Varroc Engineering Ltd?

The Market Cap of Varroc Engineering Ltd is 10,127 Cr..

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

The current stock price of Varroc Engineering Ltd as on 23 June 2024 is ₹663.

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 717/319.

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

The Stock P/E of Varroc Engineering Ltd is 18.5.

What is the Book Value of Varroc Engineering Ltd?

The Book Value of Varroc Engineering Ltd is 98.0.

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 17.8 %.

What is the ROE of Varroc Engineering Ltd?

The ROE of Varroc Engineering Ltd is 44.2 %.

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