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Varroc Engineering Ltd logo

Varroc Engineering Ltd

NSE: VARROC BSE: 541578

â‚ą565.40

(3.73%)

Mon, 08 Jun 2026, 00:17 pm

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Varroc Engineering Analysis

dividend

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Pros

  • Dividends paid are well covered by earnings (5.3x coverage).
  • Dividends after 3 years are expected to be well covered by earnings (4.7x coverage).
  • Varroc Engineering's pays a higher dividend yield than the bottom 25% of dividend payers in India (0.76%).
  • Varroc Engineering's dividend is above the markets top 25% of dividend payers in India (3.08%).
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Cons

  • Varroc Engineering only just started paying a dividend, it is too early to tell if payments are increasing.
  • It is too early to tell whether Varroc Engineering has stable dividend payments.

future

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Pros

  • Varroc Engineering's earnings are expected to grow significantly at over 20% yearly.
  • Varroc Engineering's earnings growth is expected to exceed the India market average.
  • Varroc Engineering's earnings growth is expected to exceed the low risk savings rate of 7.2%.
  • Varroc Engineering's revenue growth is expected to exceed the India market average.
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Cons

  • Cash flow for Varroc Engineering is expected to decrease over the next 2 years.
  • Varroc Engineering is expected to be loss making next year.
  • Varroc Engineering's net income is expected to decrease over the next 2 years.
  • Varroc Engineering is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).
  • Performance (ROE) is not expected to exceed the current IN Auto Components industry average.
  • A decline in Varroc Engineering's performance (ROE) is expected over the next 3 years.
  • Varroc Engineering's revenue is expected to increase but not above the 50% threshold in 2 years time.
  • Varroc Engineering's revenue is expected to grow by 9.5% yearly, however this is not considered high growth (20% yearly).

health

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Pros

  • Varroc Engineering is profitable, therefore cash runway is not a concern.
  • Varroc Engineering is profitable, therefore cash runway is not a concern.
  • Debt is well covered by operating cash flow (55.6%, greater than 20% of total debt).
  • Debt is covered by short term assets, assets are 1.5x debt.
  • Varroc Engineering's cash and other short term assets cover its long term commitments.
  • The level of debt compared to net worth has been reduced over the past 5 years (136.7% vs 70.8% today).
  • Interest payments on debt are well covered by earnings (EBIT is 3.8x coverage).
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Cons

  • Varroc Engineering's short term (1 year) commitments are greater than its holdings of cash and other short term assets.
  • Varroc Engineering's level of debt (70.8%) compared to net worth is high (greater than 40%).
  • High level of physical assets or inventory.

management

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Pros

  • The tenure for the Varroc Engineering management team is about average.
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Cons

  • The average tenure for the Varroc Engineering board of directors is less than 3 years, this suggests a new board.

misc

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Pros

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    Cons

    • Varroc Engineering has significant price volatility in the past 3 months.

    past

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    Pros

    • Varroc Engineering's year on year earnings growth rate has been positive over the past 5 years, however the most recent earnings are below average.
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    Cons

    • Varroc Engineering's 1-year earnings growth is negative, it can't be compared to the 5-year average.
    • Varroc Engineering used its assets less efficiently than the IN Auto Components industry average last year based on Return on Assets.
    • Varroc Engineering's use of capital deteriorated last year versus 3 years ago (Return on Capital Employed).
    • Varroc Engineering has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).
    • Varroc Engineering's 1-year earnings growth is negative, it can't be compared to the IN Auto Components industry average.

    value

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    Pros

    • Varroc Engineering is good value based on assets compared to the IN Auto Components industry average.
    • Varroc Engineering is good value based on expected growth next year.
    • Varroc Engineering is good value based on earnings compared to the IN Auto Components industry average.
    • Varroc Engineering is good value based on earnings compared to the India market.
    • NSEI:VARROC is up 21% outperforming the Auto Components industry which returned 13.2% over the past month.
    • NSEI:VARROC is up 21% outperforming the market in India which returned 8% over the past month.
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    Cons

    • Varroc Engineering's share price is below the future cash flow value, but not at a moderate discount (< 20%).
    • Varroc Engineering's share price is below the future cash flow value, but not at a substantial discount (< 40%).
    • VARROC underperformed the Auto Components industry which returned -22.4% over the past year.
    • VARROC underperformed the Market in India which returned -14.5% over the past year.