Varroc Engineering Ltd (VARROC) Stock Recommendation | Score, Valuation, Technicals & Financial Trend

Score

Click here to find our call on this stock

Strong Sell

Sell

Hold

Buy

Strong Buy

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Comparison

Company

Score

Quality

Valuation

Financial

Technical

Lumax Auto Tech.

Pricol Ltd

Varroc Engineer

Sansera Enginee.

Suprajit Engg.

Minda Corp

Shriram Pistons

Banco Products

ASK Automotive

JBM Auto

Ramkrishna Forg.

Why is Varroc Engineering Ltd ?

Low ability to service debt as the company has a high Debt to EBITDA ratio of 3.78 times

Low ability to service debt as the company has a high Debt to EBITDA ratio of 3.78 times

Healthy long term growth as Operating profit has grown by an annual rate 25.05%

Positive results in Sep 25

OPERATING CF(Y) Highest at Rs 707.33 Cr
PAT(Latest six months) At Rs 120.35 cr has Grown at 36.62%
ROCE(HY) Highest at 19.06%

With ROCE of 21.2, it has a Fair valuation with a 4.6 Enterprise value to Capital Employed

The stock is trading at a discount compared to its peers' average historical valuations
Over the past year, while the stock has generated a return of 21.44%, its profits have fallen by -59.9%

Majority shareholders : Promoters

Market Beating performance in long term as well as near term

Along with generating 21.44% returns in the last 1 year, the stock has outperformed BSE500 in the last 3 years, 1 year and 3 months

Real-Time Research Report

Verdict Report

How much should you hold?

Overall Portfolio exposure to Varroc Engineer should be less than 10%
Overall Portfolio exposure to Auto Components & Equipments should be less than 30%

(If sector exposure > 30%, please use optimiser tool to see which are the best stocks to hold in Auto Components & Equipments)

When to exit? - We will constantly monitor the company and suggest at the appropriate time to exit from the stock

Is Varroc Engineer for you?

High Risk, High Return

Absolute

Risk Adjusted

Volatility

Varroc Engineer

21.02%

0.57

37.71%

Sensex

4.66%

0.39

11.83%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

-2.89%

EBIT Growth (5y)

25.05%

EBIT to Interest (avg)

0.61

Debt to EBITDA (avg)

4.96

Net Debt to Equity (avg)

0.34

Sales to Capital Employed (avg)

2.67

Tax Ratio

42.54%

Dividend Payout Ratio

Pledged Shares

Institutional Holding

17.03%

ROCE (avg)

5.80%

ROE (avg)

12.26%

Valuation

Valuation Scorecard

Valuation grade scale :

Very Risky, Risky, Very Expensive, Expensive, Fair, Attractive, Very Attractive

Valuation Key Factors

Factor

Value

P/E Ratio

Industry P/E

Price to Book Value

5.83

EV to EBIT

21.70

EV to EBITDA

12.91

EV to Capital Employed

4.61

EV to Sales

1.23

PEG Ratio

Dividend Yield

0.16%

ROCE (Latest)

21.23%

ROE (Latest)

12.58%

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Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Bullish

RSI

No Signal

Bollinger Bands

Mildly Bullish

Moving Averages

Bullish (Daily)

KST

Bullish

Mildly Bearish

Dow Theory

Mildly Bullish

OBV

Bullish

Technical Indicator Scale: Bearish, Mildly Bearish, Sideways, Mildly Bullish, Bullish Turned

Technical Movement

Analyse All Technical Factors

Financial Trend

Financial Trend Scorecard

Financial Trend scale:

Very Negative, Negative, Flat, Positive, Very Positive, Outstanding

15What is working for the Company

OPERATING CF(Y)

Highest at Rs 707.33 Cr

PAT(Latest six months)

At Rs 120.35 cr has Grown at 36.62%

ROCE(HY)

Highest at 19.06%

DEBT-EQUITY RATIO(HY)

Lowest at 0.54 times

OPERATING PROFIT TO INTEREST(Q)

Highest at 6.37 times

DPS(Y)

Highest at Rs 1.00

DPR(Y)

Highest at 5.54%

NET SALES(Q)

Highest at Rs 2,207.34 cr

-1What is not working for the Company

DEBTORS TURNOVER RATIO(HY)

Lowest at 11.62 times

Loading Valuation Snapshot...

Here's what is working for Varroc Engineer

Operating Cash Flow - Annually

Highest at Rs 707.33 Cr and Grown

each year in the last three years

MOJO Watch

The company has generated higher cash revenues from business operations

Operating Cash Flows (Rs Cr)

Operating Profit to Interest - Quarterly

Highest at 6.37 times

in the last five quarters

MOJO Watch

The company's ability to manage interest payments is improving

Operating Profit to Interest

Debt-Equity Ratio - Half Yearly

Lowest at 0.54 times and Fallen

each half year in the last five half yearly periods

MOJO Watch

The company has been reducing its borrowing as compared to equity capital

Debt-Equity Ratio

Net Sales - Quarterly

Highest at Rs 2,207.34 cr

in the last five quarters

MOJO Watch

Near term sales trend is positive

Net Sales (Rs Cr)

Profit After Tax (PAT) - Quarterly

Highest at Rs 60.95 cr.

in the last five quarters

MOJO Watch

Near term PAT trend is positive

PAT (Rs Cr)

Dividend per Share (DPS) - Annually

Highest at Rs 1.00

in the last five years

MOJO Watch

Company is distributing higher dividend from profits generated

DPS (Rs)

Dividend Payout Ratio (DPR) - Annually

Highest at 5.54%

in the last five years

MOJO Watch

Company is distributing higher proportion of profits generated as dividend

DPR (%)

Here's what is not working for Varroc Engineer

Debtors Turnover Ratio- Half Yearly

Lowest at 11.62 times

in the last five half yearly periods

MOJO Watch

Company's pace of settling its Debtors has slowed

Debtors Turnover Ratio