Another stock where I sense a turnaround & sector tailwinds developing. $Varroc Engineering ltd. It’s a global automotive component mfg & supplier of innovative exterior lighting systems, powertrains, electrical & electronics, body & chassis parts to passenger car and motorcycle segment.

Lets see the issues/sector headwinds this co. has faced in last 2 yrs & currently going through. 1)There was a major fire incident in one of its mfg plant in Pune in 2020 & it has to completely write off that investment 2) Due to major capex program in last 2 years Co’s cash flows were affected negatively. 3) Semi-conductor shortages leading to key customer OEM’s shutting plants/reducing volumes at established profit making plants in Mexico & Czech Republic 4) Continued losses in new plants - Poland & Mexico as volume ramped up slower than expected. 5) Increase in raw material costs due to commodity price increase in semi conductors, resins etc not offset by corresponding increase in price.

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