Citigroup has maintained buy rating on Varroc Engineering with a target price of Rs 520.

The stock ended down 1.4 per cent at Rs 126.55 on Wednesday while the BSE Sensex closed 173.25 points down (-0.58 per cent) at 29,893.96. Varroc Engineering Ltd., incorporated in 1988, has a market cap of Rs 1706.04 crore. Investment RationaleVarroc has been one of the worst impacted due to the global Covid-19 lockdown, given the significant exposure to global auto market, said Citigroup.

Over the longer term, profits should recover due to new customer wins in the high-volume PV segment, said Citigroup.

FinancialsVarroc Engineering's key products/revenue segments include Electrical Motors - Spares which contributed Rs 1326.40 crore to sales value (51.54 per cent of total sales); Steel Forgings which contributed Rs 525.46 crore to sales value (20.42 per cent of total sales); Polymer Products which contributed Rs 252.29 crore to sales value (9.80 per cent of total sales); Auto Parts which contributed Rs 247.88 crore to sales value (9.63 per cent of total sales); Other Operating Revenue which contributed Rs 58.71 crore to sales value (2.28 per cent of total sales); Tools which contributed Rs 7.04 crore to sales value (0.27 per cent of total sales) and Job Work which contributed Rs 2.18 crore to sales value (0.08 per cent of total sales) for the year ending March 31, 2019.

For the quarter ended December 31, 2019, the company reported consolidated sales of Rs 2803.81 crore, up 3.72 per cent from last quarter sales of Rs 2703.23 crore and down -5.12 per cent from last year same quarter sales of Rs 2954.99 crore.

The company reported net profit after tax of Rs 21.68 crore in the latest quarter.