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Auto Parts & Equipment company Varroc Engineering announced Q3FY24 & 9MFY24 results:
- Consolidated revenue from operations was Rs 18,846 million in Q3FY24, registering a growth of 9.4% on a YoY basis
- Profit Before Tax grew 5 fold YoY
- Consolidated PBT margins in Q3FY24 were at 3.7%, improved by 300 bps YoY
- Strong new order lifetime win of Rs 67.57 billion in 9MFY24
Tarang Jain, CMD commented, “The Indian Economy continues to sustain its growth momentum with a GDP growth of 7.6% in Q2FY24 exceeding market expectations.
The automobile production in India during Q3FY24 grew on a YoY basis for all the segments. Passenger vehicles grew by 5.0%, Commercial vehicles grew by 5.9% whereas 3W and 2W registered a strong growth of 13.4% and 19.0% respectively. This growth was due to a strong economy and the late festive season this year. Sequentially, i.e. QoQ we have seen de-growth in all the segments, CV has de-grown by 8.3%, PV by 10.9%, 3W by 8.9% and 2W saw de-growth of 1.5%. The de-growth on a QoQ basis seems to be mainly due to the year-end phenomenon.
Our operations in Q3FY24 mirrored the industry situation. Our revenue in India grew by 20.1% higher than both two-wheeler & passenger vehicle industry growth on a YoY basis. However, our revenue from our overseas operations had a de-growth as two-wheeler production levels went down in certain markets like Vietnam and Italy. In addition, our customer concentration in these markets impacted our revenue.
As we look forward to our overseas business, our focus is to drive customer diversification in the order book and hence mitigate our customer concentration risk. We also drive cost actions through insourcing and working capital optimization. These efforts are likely to lead to a gradual recovery in overseas markets and improved financial performance in the medium term.
Despite de-growth in overseas markets in Q3, the overall revenue from operations grew by 9% on a YoY basis to Rs 18,846 million, the reported PBT for the quarter was Rs 708 million which includes profit from our joint venture of Rs 250.7 million. The PBT margin improved by 300 basis points on a YoY basis and came at 3.7%."
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