At a Glance
In just three years, Force Motors has pulled a full Fast & Furious — from being written off during COVID to now rubbing shoulders with premium auto peers. With 5x profit growth, a defense order pipeline, and foreign investors driving in, the valuation is racing ahead. But is it all torque and no traction?
1. Introduction with Hook
Force Motors was once that nerdy cousin in the auto family — decent grades, never bunked class, but no one invited him to parties (aka large-cap portfolios). Now? He’s shown up in a Merc, thanks to a 10-bagger in 3 years. What happened?
- Remember Bajaj Tempo? That’s them, rebranded in 2005
- Core biz: LCVs, SCVs, ambulances, military vehicles
- Silent partner in Mercedes & BMW India engine assembly
- Defense & export verticals just went from background score to full-blown soundtrack
2. WTF Do They Even Do? (Business Model)
Force Motors manufactures:
- 🚐 LCVs & SCVs: Traveller vans, school buses, ambulances
- 🚜 Agri Tractors: Discontinued in FY24 due to poor traction (literally)
- 🛡️ Defense Vehicles: Supplied 2,978 vehicles to the Indian Army (FY25)
- 🛠️ Powertrain biz: Joint venture with Rolls Royce (Force MTU Power Systems) for gensets
- 🏭 Contract Assembly: Engines for BMW & Mercedes assembled in India
Revenue split isn’t fully disclosed, but auto segment remains the core (>80%) with increasing export contribution.
3. Financials – Profit, Margins, ROE, Growth
| Metric | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Revenue | 1,988 Cr | 3,240 Cr | 5,029 Cr | 6,992 Cr | 8,072 Cr |
| Net Profit | -124 Cr | -91 Cr | 134 Cr | 388 Cr | 801 Cr |
| EBITDA Margin | 1% | 2% | 6% | 13% | 14% |
| ROE | -5% | -3% | 5% | 24% | 30% |
| EPS | -93.83 | -69.12 | 101.42 | 294.54 | 607.71 |
⚡ 5-year profit CAGR: 47%
📈 Margin expansion: From almost zero to 14% OPM
💰 ROCE at 30% — up there with top auto OEMs
4. Valuation — Cheap, Meh or Crack?
| Metric | Value |
|---|---|
| CMP | ₹16,719 |
| PE (TTM) | 40.3x |
| PB | 7.26x |
| Mcap | ₹22,028 Cr |
| FV Range (15–20x FY26E EPS of ~₹675) | ₹10,125 – ₹13,500 |
😬 Valuation looks ahead of fundamentals: Unless next year’s earnings also double
🎁 But includes ~₹452 Cr in other income — normalize that, and PE shoots above 60x
5. What’s Cooking?
- 🚑 Ambulance Mega Order: 2,429 BSVI diesel ambulances (Jan 2025)
- 🪖 Defense Vehicle Order: 2,978 units (Mar 2025)
- 💸 Other Income Surge: ₹452 Cr in FY25
- 🏃 Tractor Biz Shut Down: Focus shift to profitable verticals
- 👨💼 New CFO Appointed: Rishi Luharuka from June 2025
6. Balance Sheet – How Much Debt, How Many Dreams?
| Metric | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Total Borrowings | ₹642 Cr | ₹1,069 Cr | ₹955 Cr | ₹524 Cr | ₹17 Cr |
| Reserves | ₹1,825 Cr | ₹1,735 Cr | ₹1,862 Cr | ₹2,242 Cr | ₹3,020 Cr |
| Equity | ₹13 Cr constant for a decade |
🧹 Near-zero debt now — full deleveraging in FY25
🚀 Cash Reserves growing steadily
7. Cash Flow – Sab Number Game Hai
| FY | CFO | CFI | CFF | Net Cash |
|---|---|---|---|---|
| FY24 | ₹1,014 Cr | -₹198 Cr | -₹509 Cr | ₹308 Cr |
| FY25 | ₹971 Cr | -₹351 Cr | -₹562 Cr | ₹58 Cr |
🔥 Strong cash generation
💸 Capex continues — maybe new biz vertical or plant expansion
8. Ratios – Sexy or Stressy?
- OPM: 14%
- ROCE: 30%
- ROE: 21%
- Inventory Days: 73
- Debtor Days: 8 (!)
- PE: 40x (elevated)
📊 Operational efficiency is now best-in-class — but PE multiple assumes growth continues
9. P&L Breakdown – Show Me the Money
- Sales: ₹8,072 Cr
- EBITDA: ₹1,093 Cr
- PAT: ₹801 Cr
- Other Income: ₹452 Cr 🤔
🎯 Operating profit without other income = ₹641 Cr
🏁 Core earnings need to grow to justify re-rating
10. Peer Comparison
| Company | PE | ROCE | OPM | Mcap | Notes |
|---|---|---|---|---|---|
| Force Motors | 40x | 30% | 14% | ₹22K Cr | High growth, but pricey |
| Tata Motors | 9x | 20% | 13% | ₹2.5L Cr | Leader, but JLR cyclicality |
| Maruti Suzuki | 27x | 22% | 13% | ₹3.9L Cr | Consistent performer |
| M&M | 30x | 14% | 19% | ₹3.9L Cr | Strong agri + SUV mix |
| Hyundai India | 31x | 54% | 13% | ₹1.7L Cr | Private entity, stellar metrics |
🏁 Force is running with the big boys — but the valuation needs more fuel (aka EPS growth)
11. Misc – Shareholding, Promoters, FII Love
- Promoter holding: 61.63% (stable)
- FII holding: 8.36% (up from 2.4% in FY22)
- Public holding: 28.6%
🕴️ FIIs seem to be the driving force (pun intended) behind this re-rating
🪙 Still only ₹22K Cr mcap — small cap in disguise?
12. EduInvesting Verdict™
Force Motors went from being your dad’s ambulance maker to India’s stealth EV+defense stock in just 3 years. But current valuations already bake in a lot of that transformation. If FY26 numbers come in like FY25, it may justify ₹13,500. If not, the fair value could deflate faster than a punctured tyre.
FV Range: ₹10,125 – ₹13,500 (15–20x FY26E EPS)
✍️ Written by Prashant | 📅 July 9, 2025
tags: Force Motors, auto stocks India, defense vehicle manufacturers, ambulance order stocks, Firodia Group, multibagger 2024, undervalued auto stocks, Force Motors fair value, EduInvesting auto
