Varroc Engineering Limited, a leading global automotive component manufacturer, has announced the deregistration of its step-down subsidiary, Varroc Lighting Systems Bulgaria EOOD. The Bulgarian entity, which was incorporated under the laws of the Republic of Bulgaria and registered with the Bulgarian Commercial Registrar, has ceased to exist as a legal entity effective October 2, 2025.

Key Details of the Deregistration

• Subsidiary Name: Varroc Lighting Systems Bulgaria EOOD
• Effective Date: October 2, 2025
• Financial Impact: The subsidiary had nil turnover, revenue, income, and net worth for the Financial Year 2024-25

Corporate Disclosure

Varroc Engineering Limited has duly informed the National Stock Exchange of India (NSE) and BSE Limited about this development, in compliance with Regulation 30 and other applicable regulations of the SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015.

Company Background

Varroc Engineering Limited, headquartered in Aurangabad, Maharashtra, is a global tier-1 automotive component group. The company designs, manufactures, and supplies exterior lighting systems, plastic and polymer components, electricals-electronics components, and precision metallic components to passenger car, commercial vehicle, two-wheeler, three-wheeler, and off-highway vehicle OEMs directly worldwide.

Financial Information

As of September 30, 2025, Varroc Engineering Limited had outstanding Non-Convertible Debentures (NCDs) worth Rs. 187.50 crore, issued at a coupon rate of 8.60% per annum, maturing on September 7, 2028.

The company has paid interest of Rs. 4,40,30,821.92 and principal of Rs. 15,62,50,000 on its NCDs ahead of the due date in September 2025.

This strategic move to deregister the Bulgarian subsidiary with nil financial impact, coupled with the company's prompt fulfillment of its debt obligations, demonstrates Varroc Engineering's commitment to streamlining its operations while maintaining financial prudence in the automotive components sector.

Varroc Engineering Limited, a leading auto components manufacturer, has reported a consolidated revenue of INR 2,028.00 crores for the quarter, marking a 6.8% year-over-year growth. The company's India operations outperformed the overall market growth, registering a 7.2% increase.

Financial Performance

The company demonstrated improved profitability, with EBITDA margin expanding to 9.5% from 9.1% in the same quarter last year. Profit Before Tax (PBT) as a percentage of revenue increased significantly to 4.1% from 2.8% in the previous year.

Debt Reduction and Balance Sheet Strengthening

Varroc Engineering made substantial progress in strengthening its balance sheet. The company reduced its net debt by INR 300.00 crores to INR 448.00 crores, bringing the net debt to equity ratio down to 0.3x. This reduction in debt is expected to result in lower interest costs in the coming quarters.

EV Business Expansion

A notable highlight of the quarter was the significant growth in Varroc's electric vehicle (EV) business. Revenue from EV customers doubled, now accounting for 11% of total revenue compared to 5% in the previous year. This growth aligns with the company's strategy to capitalize on the expanding EV market.

New Order Wins

During the quarter, Varroc secured new order wins with an annualized peak revenue potential of INR 291.00 crores. Significantly, 67% of these new orders came from the 2-wheeler and 3-wheeler segments, indicating strong demand in these sectors.

Innovation and Sustainability

Varroc continued to focus on innovation, filing 10 new patents during the quarter. The company also made strides in sustainability, increasing its renewable energy sourcing to nearly 50% of total energy consumption.

Future Outlook

Looking ahead, Varroc Engineering is well-positioned to supply components for the growing EV market. The company can provide INR 30,000.00 to INR 35,000.00 worth of content per 2-wheeler EV and INR 35,000.00 to INR 40,000.00 for 3-wheeler EVs.

Management expects to further reduce debt by INR 100.00-150.00 crores by the end of the fiscal year. Additionally, the company plans to invest INR 150.00 crores for land acquisition, indicating confidence in future growth prospects.

While the near-term outlook for electric vehicles in India faces challenges due to the supply of rare earth magnets, Varroc is leveraging its global footprint and R&D capabilities to develop alternative solutions.

As the automotive industry navigates through uncertainties, Varroc Engineering remains focused on revenue growth, margin improvement, cost control, and optimization of capital expenditure and working capital. These strategies are expected to generate healthy free cash flow and further strengthen the company's financial position in the coming quarters.