Varroc Engineering announced its Q3FY26 financial results along with significant board decisions during its meeting held on February 5, 2026. The company reported strong operational performance with revenue growth of 12.8% year-on-year, while the board approved several strategic initiatives including debenture call options and committee reconstitution. Subsequently, the company has exercised its call option for early redemption of Non-Convertible Debentures worth ₹171.88 crore.

Financial Performance Overview

The company delivered robust financial performance for the quarter ended December 31, 2025. Standalone revenue from operations reached ₹21,151.59 million compared to ₹18,758.57 million in the corresponding quarter of the previous year, representing a solid growth of 12.8%. For the nine-month period, revenue stood at ₹59,959.02 million against ₹54,552.46 million in the previous year.

NCD Call Option Exercise

Following the board's earlier approval, Varroc Engineering has formally exercised its call option for early redemption of 8.6% Non-Convertible Debentures. The company issued notices to both the Debenture Trustee and Debenture Holder on February 5, 2026, regarding the exercise of call option for full redemption of the NCDs.

Profitability and Margins

Profit before tax and exceptional items showed remarkable improvement, reaching ₹1,281.88 million compared to ₹740.36 million in Q3 FY25, marking a substantial growth of 73.2%. However, the company recorded exceptional items of ₹871.37 million during the quarter, primarily related to Labour Code compliance costs of ₹217.93 million and Voluntary Separation Scheme expenses of ₹663.44 million.

Board Decisions and Corporate Actions

The board approved several significant decisions during the February 5, 2026 meeting. The company decided to exercise call options on 25,000 Non-Convertible Debentures with face value of ₹68,750 each, originally issued on September 7, 2023, with scheduled maturity on September 7, 2028. The debt equity ratio improved to 0.32 times from 0.57 times, indicating better financial leverage management.

Regulatory Compliance and Timeline

The call option exercise follows the completion of 30 months from the deemed date of allotment of September 7, 2023. The company has set February 13, 2026 as the record date for determining eligible debenture holders for redemption. Payment of the outstanding principal amount along with accrued interest will be completed on or before March 7, 2026, after which the debentures will be fully extinguished.

Varroc Engineering has secured a strategic contract with a global electric vehicle original equipment manufacturer (OEM), marking a significant milestone in the company's expansion into the electric vehicle sector. The contract represents substantial business potential with an estimated annual business value at peak capacity.

Contract Overview

The strategic contract award demonstrates Varroc Engineering's growing capabilities in the electric vehicle segment and its ability to secure partnerships with major global manufacturers. This development positions the company to capitalize on the rapidly expanding electric vehicle market.

Strategic Market Position

The ₹4.39 billion estimated annual business value at peak capacity represents a substantial revenue opportunity for Varroc Engineering. This contract reinforces the company's strategic focus on electric vehicle components and validates its capability to meet the stringent requirements of global EV manufacturers.

The partnership with a global electric vehicle OEM highlights Varroc Engineering's technical expertise and manufacturing excellence in the automotive sector. This strategic contract is expected to contribute significantly to the company's revenue growth as production scales up to peak capacity, strengthening its position in the evolving automotive landscape.