Varroc Engineering announced its Q3FY26 quarterly results for the quarter ended December 31, 2025, showcasing robust consolidated revenue growth and strong operational performance. The automotive technology company reported consolidated revenue from operations of ₹22.88 billion, marking a 10.2% year-on-year growth from ₹20.75 billion in Q3FY25. The Board of Directors approved the financial results at its meeting held on February 5, 2026, along with several other strategic decisions.

Financial Performance Overview

The company delivered strong consolidated financial performance for Q3FY26. Revenue from operations reached ₹22.88 billion compared to ₹20.75 billion in the corresponding quarter of the previous year. EBITDA stood at ₹2.12 billion with EBITDA margin of 9.30%, showing improvement from 9.20% in Q3FY25. However, the company reported a consolidated net loss of ₹113.03 million for the quarter due to exceptional items.

Nine-Month Performance and Market Growth

For the nine-month period ending December 31, 2025, consolidated revenue from operations reached ₹65.22 billion compared to ₹60.55 billion in the previous year, reflecting growth of 7.70%. The company benefited from strong economic growth across automotive sectors on a year-on-year basis. Nine-month EBITDA stood at ₹6.06 billion with margin of 9.30%, while net profit after tax reached ₹1.59 billion.

EV Business Performance and Strategic Growth

During the earnings conference call held on February 5, 2026, Chairman and Managing Director Tarang Jain highlighted the company's strong performance in electric vehicle segments. Revenue from EV models reached 14.3% of total revenues in Q3FY26, representing a remarkable 53% year-on-year growth. For the nine-month period, EV revenue constituted 12.1% of total revenues with 38% year-on-year growth.

Exceptional Items Impact

The company's Q3FY26 results were significantly impacted by exceptional items totaling ₹1.05 billion. Major components included ₹799.49 million for Voluntary Separation Scheme costs for 411 employees, ₹225.49 million related to new Labour Code implementation, and ₹33.83 million net loss from liquidation of subsidiary Varroc Lighting Systems, Bulgaria. These one-time charges affected the quarterly profitability despite strong operational performance.

Outstanding Order Book and Business Outlook

Varroc Engineering continues to maintain a strong order book position with outstanding orders of ₹14.07 billion at the end of 9M FY26. The company secured net new annual peak revenue wins of ₹20.64 billion during the nine-month period, with 75% from EV customers and 25% from ICE customers, demonstrating strong positioning in the electric vehicle transition. Expected start of production is spread across FY27 and FY28.

Management Commentary and Strategic Initiatives

During the conference call, management emphasized the company's focus on cost optimization and strategic restructuring. The Voluntary Separation Scheme, affecting over 400 employees primarily from ICE powertrain operations, is expected to generate annual savings of approximately ₹20 crores with a payback period of 4 years. CEO Arjun Jain noted that 95% of the VRS participants were from the ICE powertrain product group, with no impact on current operations.

The company also highlighted significant business wins in overseas markets, including high-voltage electronics orders for Romanian operations from global EV players and 4-wheeler lighting contracts for Thailand facilities. Management expects overseas operations to achieve cash breakeven by next year, with full profitability expected in the following year.

Conference Call Transcript Availability

The company has made available the complete transcript of the investor conference call held on February 5, 2026, discussing the Q3FY26 and nine-month results. The transcript, filed with stock exchanges on February 10, 2026, provides detailed management commentary on business developments, strategic initiatives, and future outlook for stakeholders seeking comprehensive insights into the company's performance.

Source: Varroc Engineering Limited regulatory filing dated February 10, 2026

Varroc Engineering has secured a major contract with a top global electric vehicle original equipment manufacturer (OEM) for the production of AC-Bi Directional Wall Chargers. The strategic partnership represents a significant expansion of the company's electric vehicle component manufacturing capabilities with production facilities located in Romania.

Contract Specifications

The contract award demonstrates Varroc Engineering's technological capabilities in advanced electric vehicle charging solutions. The AC-Bi Directional Wall Charger represents cutting-edge technology that enables both charging and discharging capabilities, positioning the company at the forefront of EV infrastructure development.

Strategic Manufacturing Expansion

The decision to establish production in Romania reflects Varroc Engineering's strategic approach to serving global markets efficiently. The Romanian facility will serve as a key manufacturing hub for the company's electric vehicle charging solutions, enabling proximity to major European automotive markets.

The six-year contract duration provides substantial revenue visibility and supports long-term business planning. With an annual contract value of ₹4,391 million, this partnership represents one of the company's most significant contracts in the electric vehicle segment, reinforcing its position as a trusted supplier to leading global EV manufacturers.