VARROCVarroc Engineering Limited Forensic Risk Analysis

Auto Components & Equipments
Risk ClassModerate Deterioration
Market Cap₹8,072 Cr
Primary DriverBalance Sheet Stress
Flagium AI Risk Score
Moderate stress emerging. While not critical, underlying pressure is building.
40 / 100
+19 QoQ
Early Deterioration
Sentinel Insight

Some early signs of pressure are visible. Weakness is detected in balance sheet stress. This suggests a building risk profile. Risk is increasing at a faster pace.

98.6th %ile (Sector)Accel: +1 Qtrs
Updated2026-06-02
Market View
₹574.3▼0.23%
PeriodQ4 FY26

Score Waterfall
Absolute contribution points of each forensic pillar to the final risk score. Derived from: Sector Baseline + Active Penalties - Mitigation Buffers.

Balance Sheet Stress
+13.5 pts
Competitive Position
+10.6 pts
Growth Sustainability
+10.0 pts
Earnings Quality
+5.8 pts
Final Composite Risk40 / 100

Investment Risk Thesis

Historical Trend

Current risk score has risen from 10 → 40 over 13 quarters.

Expected Direction
🚨 Escalate
Primary Deterioration Drivers
  • Inventory Stress
  • Industrial Margin Stress
  • Relative Growth Weakness
What to Watch Next Quarter
  • Working capital efficiency
  • Operating profit margins
  • Inventory turnover

Active Risk Objects (7)

CriticalHigh
Working Capital Expansion
💧 Liquidity & CoverageAnnualActive for 3 Years
More Detail
Impact Weight10/15
MomentumPersistent
Last SignalQ4 FY2026
Working capital expansion detected: Receivable days increased by -4.2%.

"Early signs of working capital expansion. Receivable or inventory days are creeping up."

Low Interest Coverage
💧 Liquidity & CoverageQuarterlyActive for 7 Qtrs
More Detail
Impact Weight8/15
MomentumDecaying
Last SignalQ3 FY2026
VARROC: Low Interest Coverage Ratio of 0.86x in FY2026 Q3 (Threshold: 2.5x).

"The ability to cover interest is strengthening as earnings improve or debt is retired."

Inventory Stress
📊 Earnings QualityAnnualActive for 2 Years
More Detail
Impact Weight15/15
MomentumAccelerating
Last SignalQ4 FY2026
Inventory growth (27.3%) significantly outpaced revenue growth (12.8%).

"Stock is piling up in the warehouse. Inventory turnover is slowing down dangerously."

Profit Collapse
📊 Earnings QualityQuarterlyActive for 2 Qtrs
More Detail
Impact Weight8/15
MomentumDecaying
Last SignalQ4 FY2025
VARROC: Net Profit collapsed by 60.6% from FY2024 Q4 to FY2025 Q4.

"Earnings quality is stabilizing. The reliance on non-operational items is receding."

Operating Leverage Stress
📊 Earnings QualityAnnualActive for 1 Years
More Detail
Impact Weight10/15
MomentumDecaying
Last SignalQ4 FY2025
Expenses are consistently growing faster than revenues, creating operational pressure.

"Debt servicing metrics have improved recently. The company is actively deleveraging."

Industrial Margin Stress
📊 Earnings QualityAnnualActive for 1 Years
More Detail
Impact Weight12/15
MomentumAccelerating
Last SignalQ4 FY2026
VARROC: Raw material costs consumed an additional 3.8% of revenue YoY.

"Early signs of margin erosion. Input costs are beginning to eat into core profits."

Relative Growth Weakness
📊 Earnings QualityAnnualActive for 4 Years
More Detail
Impact Weight12/15
MomentumPersistent
Last SignalQ4 FY2026
Revenue growth consistently lags behind sector median (12.9%).

"Early signs of earnings quality decay. Profitability is being driven by non-core items."

Risk Trajectory
Historical 12-quarter risk trend (Q-11 to Q0) followed by a 2-quarter predictive funnel (Q+1, Q+2).
Loading Chart
Resilience Matrix
Diagnostic benchmarking comparing structural sensitivity and risk buffers against sector medians.
MetricValuevs SectorSignal
Volatility (σ)5.175.20✅ RESILIENT
Sensitivity (ε_s)11.00✅ RESILIENT
Escalation Prob.5%5%✅ NEUTRAL
Safety Buffer+26.0+55.5📈 CRITICAL
Forensic Benchmark Context: Auto Components & Equipments (n=74 peers)

Correlation Analysis
Visualizing the relationship between stock price movement and structural risk objects.

Loading Chart
Share Price
Risk Score (0-100)
Market Performance
₹574.3(-0.23%)
1M Divergence+5.32%
1 Week-0.07%
1 Month+7.59%
6 Months-10.52%
1 Year+4.22%
2 Year+3.25%
3 Year+87.25%
Sector Average (1M)+2.27%
Sentinel Forensic Assessment
ALGORITHMIC RISK PROFILE • NON-ADVISORY

The risk profile is Moderate Stress and currently deteriorating. Recent structural triggers in balance sheet stress suggest a building pressure on the underlying framework. Material forensic traces are visible in core structural metrics, indicating a progressive erosion of structural stability. Strategic vigilance is advised as structural decay is accelerating.

VARROC • MARKET STRUCTURE

Stage 1 — Accumulation

The company is in a foundational phase. Risk metrics are stabilizing as the company builds a base for potential future fundamental improvement.

Stage Transition Prob.1%
Trend QualityEarly Base
Phase Progression
Phase Progression Score15%
Readiness LabelLow (Early Base Consolidation)
Probability of Advancing1%
CoinTree Momentum
Composite Z-Score-0.0771σ
Weakening momentum trend
Universe Rank
A cross-sectional rank of this stock's composite momentum score compared to all other tracked equities in the universe. A rank of #1 of 1035 means it has the strongest overall price momentum in the market.
#1148 of 2716
Top 42.27% in momentum strength
Timeframe Sparklines
1W-0.1%
1M+7.6%
6M-10.5%
Weinstein Indicators
150 DMA₹572.87
200 DMA₹576.61
150 DMA Slope-1.1983%Declining
Relative Strength-5.98%Lagging
Relative Turnover (RTR)0.5204
ParticipationWeak

PEER COMPARISON

Ranked comparison against sector peers

This company shows higher risk compared to the Sector Mean (10.5).
ALICONAlicon Castalloy Limited
20 Risk
Sector %ile74th
Delta-5
Active Flags18
Accel+0
Balance Sheet Stress

Watch

ARE&MAmara Raja Energy & Mobility Limited
30 Risk
Sector %ile89th
Delta-5
Active Flags19
Accel+0
Earnings Quality

Watch

VARROCVarroc Engineering Limited
40 Risk
Sector %ile99th
Delta+19
Active Flags7
Accel+1
Balance Sheet Stress

Moderate Deterioration

* Peer comparison is based on risk signals, not valuation or returns.

Risk Profiles

Solvency
10100th %ile
VS Sector Median (8.5)
Governance
10100th %ile
VS Sector Median (8.5)
Earnings Quality
6.261.6th %ile
VS Sector Median (8.5)
Balance Sheet Stress
3.232.5th %ile
VS Sector Median (8.5)
Competitive Position
329.6th %ile
VS Sector Median (8.5)
Growth Sustainability
00th %ile
VS Sector Median (8.5)

Deterioration Timeline

2026

Relative Growth Weakness

2026

Industrial Margin Stress

2026

Working Capital Expansion

2026

Inventory Stress

2026

Relative Growth Weakness

2026

Relative Growth Weakness

2026

Working Capital Expansion

2026

Relative Growth Weakness

2025

Operating Leverage Stress

2025

Working Capital Expansion

2025

Inventory Stress

Key Financials (INR Cr)

PeriodRevenueNet ProfitOCFDebt
FY20268,908230537738
FY20258,17270737949
FY20247,5805326381,209
FY20236,921-8176611,635