Varroc rides high on sharp auto recovery, strong order book hopes

Jump in European electric car sales, better utilisation of facilities should help improve sales and profitability

The stock of auto-component supplier Varroc Engineering is up 72 per cent over the past week on expectations that a sharp recovery in automobile sales will translate into higher capacity utilisation and improving profitability. A strong order book and increasing content per vehicle, too, are expected to help improve revenue growth and gain market share.
 

The immediate trigger for the company is the record sales of electric vehicles in Europe, which is the biggest market by geography for Varroc Engineering. Incentives by Germany and France to stimulate demand and help automakers meet tough emission standards helped increase sales there.
 

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