Varroc Engineering (VARROC) Q4 24/25 earnings summary

Executive summary

• Q4 FY 2025 consolidated revenue was INR 21 billion, up 11% year-over-year, with Indian operations growing 13%; FY 2025 revenue reached INR 81.7 billion, up 8.5%.

• Net new lifetime orders in FY 2025 totaled INR 60.51 billion, with annual peak revenue potential of INR 11.7 billion; EV customer revenue was 10.3% in Q4.

• Board recommended a final dividend of INR 1 per share for FY 2025.

• Completed merger of Varroc Polymer with Varroc Engineering, effective February 1, 2025.

• Sale of China JV stake completed in May 2025, realizing INR 3,400 million in net proceeds.

Financial highlights

• Q4 EBITDA margin was 10.2% (vs. 11.1% last year); PBT before exceptional items at 4.9%.

• Free cash flow for FY 2025 was INR 3,116 million (3.8% of revenue); ROCE (pre-tax) at 20.8%.

• Net debt reduced by INR 2.3 billion in FY 2025, ending at INR 7.5 billion.

• Consolidated net profit for FY 2025 was INR 696.76 million, down from INR 5,320.75 million in FY 2024.

• EPS (consolidated) for FY 2025 was INR 4.01, down from INR 34.43 in FY 2024.

Outlook and guidance

• CapEx guidance for FY 2026 is INR 225–275 crore, with an additional INR 100 crore for land purchase.

• Focus on debt reduction, prudent capital deployment, and less capital-intensive investments.

• Overseas business recovery expected from Q2 FY 2027 as new order wins materialize.

• Board seeks approval to raise up to INR 500 crore via non-convertible debentures in FY 2025-26.

• Targeting export revenue to reach at least 10% of total in the next 2–3 years.