Recognition for Kham River Revitalization Project
Varroc’s Corporate Social Responsibility (CSR) initiative, the Kham River Revitalization Project, has earned significant recognition by being named one of the top five contenders for the prestigious World Resources Institute (WRI) Ross Center Prize for Cities. This nomination underscores Varroc’s dedication to sustainable urban development and environmental conservation. The WRI Ross Center Prize for Cities is a renowned award that celebrates innovative ideas, visionary leadership, and transformative projects fostering more sustainable and inclusive cities worldwide.
The Kham River Revitalization Project, initiated in 2016, aimed to restore and clean a 1.5 km stretch of the Kham River in Aurangabad. The project, a collaborative effort with the Confederation of Indian Industry (CII), Aurangabad Municipal Corporation, EcoSattva Environmental Solutions, and Aurangabad Cantonment Board, has seen remarkable success. The river, once reduced to a waste-filled stream due to sewer leakage and improper waste disposal, has been rejuvenated through deep ecological restoration, community-centered riverfront parks, and socially integrated waste management. This transformation has fostered a new cultural ethic around the ecosystem in Aurangabad.
Financial Performance Highlights
Varroc Engineering Ltd., a global tier-I auto components group, has reported robust financial performance for the financial year ending March 31, 2024. The company achieved consolidated revenue from operations of Rs 7,551.9 crore in FY24. This represents a substantial increase, reflecting the company’s strong market presence and operational efficiency.
The profit before tax (PBT) for FY24 grew by an impressive 280% compared to FY23, reaching Rs 314.9 crore. This includes a profit of Rs 44.4 crore from joint ventures. The PBT margin improved by 300 basis points year-on-year, standing at 4.2%. This remarkable improvement is a testament to Varroc’s strategic focus on profitability and cost management.
Varroc’s net debt has been reduced to below Rs 1,000.0 crore, specifically Rs 982.6 crore, as a result of better profitability and tighter control on capital expenditure and working capital. The net debt-to-equity ratio improved significantly from 1.27 in FY23 to 0.64 in FY24, and the net debt-to-EBITDA ratio improved from 2.13 in FY23 to 1.29 in FY24, showcasing the company’s enhanced financial stability.
Operational Success and Future Outlook
The automobile sector in India showed robust growth across all segments during FY24. The passenger vehicle segment grew by 6.9%, and the commercial vehicle segment by 3.0%. Notably, the two-wheeler and three-wheeler segments registered strong growth of 16.0% and 10.3%, respectively. Varroc’s India operations performed exceptionally well, with a growth of over 14.1% in FY24.
Despite challenges in overseas markets, Varroc secured significant new business wins worth Rs 8700 crore in FY24, with an annual peak value of around Rs 1,500 crore. These new wins, predominantly in the electric vehicle (EV) category, are expected to generate additional revenue of Rs 850 crore in FY25. Revenue from EV players constituted approximately 5.3% of Varroc’s overall revenue in FY24.
Varroc is focused on strengthening its engineering capabilities, reducing costs, and optimizing working capital. The company is working on several initiatives to grow its overseas business, including cost reduction efforts and exploring additional revenue opportunities with various customers.
Conclusion
Varroc’s recognition for the Kham River Revitalization Project as one of the top five contenders for the WRI Ross Center Prize for Cities shows its commitment to sustainable urban development and environmental conservation. Coupled with its impressive financial performance in FY24, Varroc continues to demonstrate strong financials and innovative approaches in both its corporate social responsibility initiatives and core business operations.
Shares of the company closed at Rs 571.15, down 1.31% from its yesterday’s closing price of Rs 578.75. The shares have delivered 18.03% returns in past 2 weeks and 82.21% return in past 1 year.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. The information is based on various secondary sources on the internet and is subject to change. Please consult with a financial expert before making investment decisions.
