During the first half of the fiscal year 2024, Varroc Engineering, an automotive component provider, secured a significant lifetime order valued at Rs 3602 crore. In the second quarter of the same fiscal year, it successfully added three new electric vehicle clients.
In addition to securing contracts from two clients for the supply of electric vehicle (EV) powertrain components, Varroc Engineering has also won a significant order. During an investor meeting, the company shared that the newly acquired EV clientele includes a domestic startup yet to commence production and a notable player in the export market. Varroc Engineering will be providing a range of products, including motors, controllers, and connectivity devices within the EV category. These new contracts are expected to substantially boost the company’s EV-related revenues over the coming year.
As a key provider for leading two-wheeler brands such as Bajaj Auto, Royal Enfield, KTM, and many others, Varroc Engineering operates at around 60–65% capacity. The firm anticipates that a rebound in the two-wheeler sector will not only enhance capacity utilization but also augment operational leverage.
Financially, Varroc Engineering witnessed a turnaround with a net gain of Rs 55.7 crore in the second quarter of FY24, contrasting with a loss in the prior year. Its operational revenue has risen to Rs 1,886 crore this quarter, up from Rs 1,834 crore in the corresponding quarter of the previous year.
The company’s CMD, Tarang Jain, commented on the current international business climate, noting the unpredictability stemming from tensions in Europe and the Middle East. He raised concerns about potential interest rate hikes linked to escalating inflation and oil prices. Nonetheless, Jain remains optimistic about the Indian economy’s resilience and its sustained expansion in FY24, anticipating an upswing in rural demand coinciding with the ongoing festive period.
