Varroc Engineering Q2 Review — ICICI Securities Maintains 'Buy', Raises Target Price, Implying 15% Upside

Varroc Engineering's revenue was up 6% YoY at Rs 22 billion with ~8% YoY growth in India operations. Overseas growth lagged (down 18% YoY) due to macro weakness..NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..ICICI Securities Report.Varroc Engineering Ltd.’s Ebitda margin stood at 9.2%, down ~80bps YoY (vs consensus/our estimate of 9.8%/9.7%). Revenue growth was ~6% YoY, with ~8% YoY growth in India operations. Overseas operations remained under pressure due to macro weakness. Varroc Engineering expects a gradual recovery in its overseas business over the next one–two years, with recent order wins. We have factored in 12% revenue CAGR over FY25–28E, led by growth in the two-wheeler segment and ramp-up of new order wins. We expect Ebitda margin to improve to ~10.5%/10.7% in FY27E/FY28E. Maintain Buy, with a DCF-based target price of Rs 745 (earlier Rs 690), implying ~20 times FY28E earnings per share..Downside risks Slower-than-expected growth in domestic two-wheeler market.Unable to add large e-two-wheeler OEMs apart from Bajaj Auto as customers..Click on the attachment to read the full report:.Stay 'Neutral' On Craftsman Automation Says Motilal Oswal Post Q2 Results — Check Target Price.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Varroc Engineering Q2 Review — ICICI Securities Maintains 'Buy', Raises Target Price, Implying 15% Upside

ICICI Securities projects 12% revenue CAGR over FY25–28, Varroc's Ebitda margin to improve to 10.7% by FY28, and RoE to reach 21%.

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