Varroc Engineering Q2 FY27 Results: Consolidated Net Profit ₹33.47 Crore on Total Income of ₹2,952 Crore
- Earnings
- Automotive components
Reviewed byRachit TripathiBlacklitt Research
Varroc Engineering (NSE: VARROC) reported consolidated total income of ₹2,951.83 crore and net profit of ₹33.47 crore for the quarter ended 30 Sep 2026, it said in a filing on 4 Nov 2026. Standalone total income was ₹2,681.25 crore and net profit ₹118.78 crore.
Key highlights
Consolidated
Including its subsidiaries
- Total income: ₹2,951.83 crore, up 33.6% YoY and 11.8% QoQ
- Net profit and EPS: ₹33.47 crore, down 47.1% YoY; basic EPS ₹2.15 against ₹3.99
- Exceptional item: ₹63.10 crore, for Varroc Italy restructuring and an Italian tax settlement
Standalone
The company on its own, without its subsidiaries
- Total income: ₹2,681.25 crore, up 31.4% YoY and 13.2% QoQ
- Net profit and EPS: ₹118.78 crore, up 75.6% YoY; basic EPS ₹7.77 against ₹4.43
- Dividend income: ₹10.10 crore from a subsidiary, included in other income
Summary
| Particulars | Q2 FY27 | Q2 FY26 | YoY | Q1 FY27 | QoQ |
|---|---|---|---|---|---|
| 2,951.83 | 2,210.00 | +33.6% | 2,640.43 | +11.8% | |
| Revenue from operations | 2,947.93 | 2,207.34 | +33.6% | 2,634.23 | +11.9% |
| Other income | 3.90 | 2.66 | +46.6% | 6.20 | -37.1% |
| 33.47 | 63.26 | -47.1% | 77.70 | -56.9% | |
| Finance costs | 32.33 | 31.86 | +1.5% | 30.65 | +5.5% |
| Depreciation | 88.60 | 82.59 | +7.3% | 84.32 | +5.1% |
| Tax expense | 44.12 | 28.76 | +53.4% | 36.67 | +20.3% |
| Net profit margin | 1.13% | 2.86% | -1.73 pp | 2.94% | -1.81 pp |
| Tax as share of profit before tax | 56.9% | 31.3% | +25.61 pp | 32.1% | +24.80 pp |
| EPS, basic (₹) | 2.15 | 3.99 | -46.1% | 5.06 | -57.5% |
Figures are in ₹ crore; YoY compares with Q2 FY26 and QoQ with Q1 FY27. Click Total income or Net profit to see the rows behind them.
Consolidated profit fell while income rose. Total income of ₹2,951.83 crore was up 33.6% on the year-earlier quarter, but profit before tax of ₹77.59 crore was 15.7% below the ₹92.02 crore reported then, and net profit of ₹33.47 crore was 47.1% lower than ₹63.26 crore. Net profit attributable to shareholders was ₹32.83 crore, giving basic EPS of ₹2.15 against ₹3.99.
Tax took a larger share of profit before tax. Tax expense of ₹44.12 crore was 56.9% of profit before tax, against 31.3% a year earlier. Finance costs of ₹32.33 crore were 1.1% of total income, close to the ₹31.86 crore of the year-earlier quarter.
The quarter carries an exceptional item of ₹63.10 crore, which the filing describes as relating to the restructuring of Varroc Italy and an Italian tax settlement. The restructuring provision is ₹49.39 crore and covers the discontinuation of manufacturing, laboratory and testing activities of Varroc Italy S.p.A. The notes say the restructuring was initiated in view of continued losses and high operating costs of the subsidiary. The Italian tax settlement, concluded in October 2026, is ₹13.72 crore and is payable in quarterly instalments until 31 Jul 2030.
The auditors are unable to comment on that income and its consequential impact. The company says it believes it has a strong case and will take appropriate actions to protect its interests. The OPmobility ICC arbitration includes claims quantified in part at USD 66.41 million plus legal costs; no provision has been considered for it in these results, based on a legal opinion obtained by the company.
| Particulars | Q2 FY27 | Q2 FY26 | YoY | Q1 FY27 | QoQ |
|---|---|---|---|---|---|
| 2,681.25 | 2,040.53 | +31.4% | 2,368.64 | +13.2% | |
| Revenue from operations | 2,667.15 | 2,037.85 | +30.9% | 2,363.49 | +12.8% |
| Other income | 14.10 | 2.68 | +426.1% | 5.15 | +173.8% |
| 118.78 | 67.65 | +75.6% | 98.87 | +20.1% | |
| Finance costs | 27.60 | 29.79 | -7.4% | 26.56 | +3.9% |
| Depreciation | 110.59 | 67.66 | +63.5% | 67.90 | +62.9% |
| Tax expense | 42.07 | 24.99 | +68.3% | 34.67 | +21.3% |
| Net profit margin | 4.43% | 3.32% | +1.11 pp | 4.17% | +0.26 pp |
| Tax as share of profit before tax | 26.2% | 27.0% | -0.82 pp | 26.0% | +0.19 pp |
| EPS, basic (₹) | 7.77 | 4.43 | +75.4% | 6.47 | +20.1% |
Figures are in ₹ crore; YoY compares with Q2 FY26 and QoQ with Q1 FY27. Click Total income or Net profit to see the rows behind them.
Standalone profit grew faster than income. Total income of ₹2,681.25 crore rose 31.4% on the year-earlier quarter, net profit of ₹118.78 crore rose 75.6% from ₹67.65 crore, and profit before tax rose 73.6% to ₹160.85 crore from ₹92.64 crore. Basic EPS was ₹7.77 against ₹4.43.
Other income of ₹14.10 crore includes dividend income of ₹10.10 crore from a subsidiary, which is 71.6% of the line, against ₹2.68 crore a year earlier. Depreciation rose to ₹110.59 crore from ₹67.66 crore, and tax expense of ₹42.07 crore was 26.2% of profit before tax, against 27.0%.
The standalone results show no exceptional item for the quarter. The standalone auditors' review report is qualified on the TYC Parties matter and carries an emphasis of matter on the OPmobility arbitration and the GST orders. The GST orders were partly allowed on appeal, reducing the total demand to ₹28.40 crore; further appeals have been filed on the interest and penalty components.
Inference
Net worth at 30 Sep 2026 is ₹2,257.19 crore standalone and ₹1,904.24 crore consolidated. Consolidated net profit of ₹33.47 crore is ₹85.31 crore below standalone net profit of ₹118.78 crore, and the filing does not give the reason for that gap.
Commercial paper of ₹50.00 crore at 6.90% was issued on 24 Sep 2026 and is due on 23 Dec 2026. The company agreed after the quarter to acquire a 45% stake in Forsee Power India Private Limited for an initial EUR 4.50 million, with a right to acquire a further 6% and contingent consideration of up to EUR 2.00 million, subject to applicable approvals; the filing does not say when the acquisition will complete.
Filed with BSE on . Reference: Original filing (PDF)
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