Investec maintains 'buy' on Varroc Engineering, target price Rs 520

Investec has maintained buy rating on Varroc Engineering and revised target price to Rs 520 from Rs 600. Varroc’s share price is down 30% in the last year as weak global macro, model specific issues with a few OEMs and muted performance by the China JV took a toll on earnings, said Investec. Backward integration, a favourable client mix change, and production ramp-up in new plants and operating leverage should improve margins, said Investec. The stock ended down 2.8% at Rs 378.25 on Thursday.