1. At a Glance
Federal-Mogul Goetze (FMG) is India’s #2 piston & piston ring player with a ~29% organized market share. It’s been around since 1954, makes critical components for 2/3/4-wheelers, and exports to global OEMs. FY25 saw TTM revenue ₹1,839 Cr, net profit ₹178 Cr, and OPM 16%. Debt? Basically zero. Dividend? Zero too — because apparently, they like to keep the cash for themselves.
2. Introduction
Think of FMG as the heart surgeon for engines — if the piston ring fails, your vehicle’s basically got cardiac arrest. They’ve got German-origin DNA (Goetze-Werke → Federal-Mogul → now Tenneco Inc.), decades of process know-how, and sticky OEM relationships.
While the auto component sector loves riding economic cycles, FMG has delivered a 37% CAGR profit growth over the last 5 years, mostly by margin expansion and cost control, not by wild sales surges (sales CAGR: 11%). And just this week, they swapped out the MD, CFO, and CEO — so yes, there’s fresh leadership fuel in the tank.
3. Business Model (WTF Do They Even Do?)
Products:
- Pistons & Piston Rings
- Engine components for two-wheelers, three-wheelers, passenger cars, and commercial vehicles.
Customers: Major OEMs in India and abroad.
Moat: Long-standing relationships,
high engineering precision, and being an entrenched Tier-1 supplier.
They aren’t chasing glamour in EVs yet — internal combustion engines still pay the bills.
4. Financials Overview
Latest Quarter (Q1 FY26):
- Revenue: ₹484 Cr (+8.8% YoY)
- Operating Profit: ₹71 Cr (OPM: 15%)
- Net Profit: ₹45 Cr (PAT Margin: 9.3%)
- EPS: ₹7.77
Fresh P/E Calculation:
Annualized EPS = ₹7.77 × 4 = ₹31.08
At CMP ₹537 → P/E = 17.28 (slightly cheaper than the screen’s 17.57 due to fresh Q1 numbers).
TTM:
- Revenue: ₹1,839 Cr
- Net Profit: ₹178 Cr
- ROE: 13.6%
- ROCE: 19%
5. Valuation (Fair Value RANGE only)
| Method | Basis | Multiple / Assumption | Value (₹ Cr) | Per Share (₹) |
|---|---|---|---|---|
| P/E | EPS ₹31.08 × 16–20 | 16x – 20x | 2,857 – 3,572 | 514 – 642 |
| EV/EBITDA | EBITDA ₹292 Cr × 9–10 | 9x – 10x | 2,628 – 2,920 | 473 – 525 |
| DCF | 10% growth, 12% discount, 10 yrs | Conservative | ~₹3,200 Cr | ~₹560 |
Fair Value Range: ₹510 – ₹560 per share.
Disclaimer: This FV range is for educational purposes only and
