NSEI:VARROC

Stock Analysis Report

Executive Summary

Varroc Engineering Limited designs, manufactures, and supplies exterior lighting systems, plastic and polymer components, electrical and electronics components, and precision metallic components worldwide.

Snowflake

Fundamentals

Undervalued with adequate balance sheet.

Risks

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

Similar Companies

Share Price & News

How has Varroc Engineering's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

-3.4%

NSEI:VARROC

0.6%

IN Auto Components

1.3%

IN Market


1 Year Return

-55.7%

NSEI:VARROC

-26.2%

IN Auto Components

-1.5%

IN Market

VARROC underperformed the Auto Components industry which returned -26.2% over the past year.

VARROC underperformed the Market in India which returned -1.5% over the past year.


Share holder returns

VARROCIndustryMarket
7 Day-3.4%0.6%1.3%
30 Day-5.1%-3.5%-0.8%
90 Day-23.7%-14.5%-3.7%
1 Year-55.7%-55.7%-25.8%-26.2%0.3%-1.5%
3 Yearn/a4.6%2.8%29.2%22.6%
5 Yearn/a54.6%49.6%47.8%33.9%

Price Volatility Vs. Market

How volatile is Varroc Engineering's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Varroc Engineering undervalued based on future cash flows and its price relative to the stock market?

49%

Discount to future cash flow value


Intrinsic Value Based on Future Cash Flows

Varroc Engineering's share price is below the future cash flow value, and at a moderate discount (> 20%).

Varroc Engineering's share price is below the future cash flow value, and at a substantial discount (> 40%).


Price Based on Earnings

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.


Price Based on Expected Growth

Varroc Engineering is good value based on expected growth next year.


Price Based on Value of Assets

Varroc Engineering is overvalued based on assets compared to the IN Auto Components industry average.


Next Steps

Future Growth

How is Varroc Engineering expected to perform in the next 1 to 3 years based on estimates from 4 analysts?

17.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

Varroc Engineering's revenue is expected to grow by 10.6% yearly, however this is not considered high growth (20% yearly).

Varroc Engineering's earnings are expected to grow by 17.5% yearly, however this is not considered high growth (20% yearly).

Varroc Engineering's revenue growth is expected to exceed the India market average.

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 7.6%.


Earnings per Share Growth Estimates


Future Return on Equity

Varroc Engineering is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).


Next Steps

Past Performance

How has Varroc Engineering performed over the past 5 years?

27.6%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Varroc Engineering has delivered over 20% year on year earnings growth in the past 5 years.

Varroc Engineering's 1-year earnings growth is negative, it can't be compared to the 5-year average.

Varroc Engineering's 1-year earnings growth is negative, it can't be compared to the IN Auto Components industry average.


Return on Equity

Varroc Engineering has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).


Return on Assets

Varroc Engineering used its assets less efficiently than the IN Auto Components industry average last year based on Return on Assets.


Return on Capital Employed

Varroc Engineering has significantly improved its use of capital last year versus 3 years ago (Return on Capital Employed).


Next Steps

Financial Health

How is Varroc Engineering's financial position?


Financial Position Analysis

Varroc Engineering's short term (1 year) commitments are greater than its holdings of cash and other short term assets.

Varroc Engineering's cash and other short term assets cover its long term commitments.


Debt to Equity History and Analysis

Varroc Engineering's level of debt (53.3%) compared to net worth is high (greater than 40%).

The level of debt compared to net worth has been reduced over the past 5 years (97.6% vs 53.3% today).

Debt is well covered by operating cash flow (64.8%, greater than 20% of total debt).

Interest payments on debt are well covered by earnings (EBIT is 6.3x coverage).


Balance Sheet

High level of physical assets or inventory.

Debt is covered by short term assets, assets are 2x debt.


Next Steps

Dividend

What is Varroc Engineering's current dividend yield, its reliability and sustainability?

1.31%

Expected Dividend Yield


Dividend Yield and Payments Analysis

Varroc Engineering's pays a higher dividend yield than the bottom 25% of dividend payers in India (0.56%).

Varroc Engineering's dividend is below the markets top 25% of dividend payers in India (2.21%).

It is too early to tell whether Varroc Engineering has stable dividend payments.

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


Current Payout to Shareholders

Dividends paid are thoroughly covered by earnings (8.3x coverage).


Future Payout to Shareholders

Dividends after 3 years are expected to be thoroughly covered by earnings (8.3x coverage).


Next Steps

Management

What is the CEO of Varroc Engineering's salary, the management and board of directors tenure and is there insider trading?

1.8yrs

Average management tenure


CEO

Ashwani Maheshwari

1.3yrs

Tenure

Mr. Ashwani Maheshwari serves as Whole-time Director and Chief Executive Officer at Varroc Engineering Limited. Mr. Maheshwari served as the President of Metallic Business at Varroc Engineering Pvt. Ltd. s ...


Management Age and Tenure

1.8yrs

Average Tenure

51yo

Average Age

The average tenure for the Varroc Engineering management team is less than 2 years, this suggests a new team.


Board Age and Tenure

2.0yrs

Average Tenure

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


Insider Trading

No 3 month individual insider trading information.


Ownership Breakdown


Management Team

  • Arjun Jain (30yo)

    Business Head of Electrical-Electronics Division & Whole-time Director

    • Tenure: 3.9yrs
  • S. Patil

    Senior Vice President of Production Systems

  • Tarang Jain (58yo)

    MD & Director

    • Tenure: 18.5yrs
  • T. Srinivasan

    Group Chief Financial Officer

    • Tenure: 1.8yrs
  • Kavita Kulkarni

    Chief Human Resource Officer

    • Tenure: 0.5yrs
  • Rakesh Darji

    Company Secretary

  • Vineet Tyagi

    Associate Vice President of Operations

  • Ashwani Maheshwari

    CEO & Whole-Time Director

    • Tenure: 1.3yrs
  • Prakash Khose

    Business Head of Metallic Forging Division

  • Vikas Marwah (51yo)

    Chief Sales & Marketing Officer and Senior VP


Board Members

  • Tarang Jain (58yo)

    MD & Director

    • Tenure: 31.2yrs
  • Naresh Jain

    Chairman of the Board

  • Ashwani Maheshwari

    CEO & Whole-Time Director

    • Tenure: 3.3yrs
  • Arjun Jain (30yo)

    Business Head of Electrical-Electronics Division & Whole-time Director

    • Tenure: 0.9yrs
  • Gautam Khandelwal

    Independent Non-Executive Director

    • Tenure: 2.0yrs
  • Marc Szulewicz

    Independent Non-Executive Director

    • Tenure: 2.0yrs
  • Vijaya Sampath

    Independent Non-Executive Director

    • Tenure: 2.0yrs
  • Vinish Kathuria

    Independent Non-Executive Director

    • Tenure: 1.4yrs

Company Information

Varroc Engineering Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Varroc Engineering Limited
  • Ticker: VARROC
  • Exchange: NSEI
  • Founded: 1988
  • Industry: auto parts and equipment
  • Sector: automobiles
  • Market Cap: ₹60.005b
  • Shares outstanding: 134.81m
  • Website: Click here

Number of Employees


Location

  • Varroc Engineering Limited
  • L-4, MIDC Industrial Area
  • Waluj
  • Aurangabad
  • Maharashtra
  • 431136
  • India

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
VARROCNSEI (National Stock Exchange of India)YesEquity SharesININRJul 2018
541578BSE (Mumbai Stock Exchange)YesEquity SharesININRJul 2018

Biography

Varroc Engineering Limited designs, manufactures, and supplies exterior lighting systems, plastic and polymer components, electrical and electronics components, and precision metallic components worldwide. ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/07/18 13:09
End of Day Share Price2019/07/18 00:00
Earnings2019/03/31
Annual Earnings2019/03/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.