1. At a Glance
ZF Steering makes steering systems for trucks, buses, and tractors—basically everything except your shopping cart. Market cap ₹1,064 Cr, stock at ₹1,174 with a nosebleed P/E of 102x. Profits? Shrinking faster than your weekend plans when Monday calls.
2. Introduction with Hook
Imagine paying first-class prices for an auto-rickshaw ride—that’s ZF Steering right now. Sales inching forward, profits reversing. Q1 net profit crashed 30% YoY to ₹7.15 Cr, while OPM managed a modest 13.6%. Investors are holding their breath… and maybe the steering wheel too.
3. Business Model (WTF Do They Even Do?)
ZF Steering builds hydraulic and mechanical steering systems for commercial vehicles, buses, and tractors. Tier-I supplier status sounds fancy, but let’s be real—it’s a low-volume, margin-sensitive game. They’ve dipped their toes in subsidiaries for aluminium extrusion and electric equipment, but profits haven’t followed suit yet.
4. Financials Overview
- Q1 FY26 Revenue: ₹133 Cr (YoY +3.7%)
- Net Profit: ₹7.1 Cr (YoY -30%)
- OPM: 13.6% (slightly improved)
- TTM Sales: ₹499 Cr, PAT ₹10 Cr
ROE 2.7% and ROCE 5.6%—numbers that make analysts yawn.
5. Valuation
- P/E: 102x – pure madness.
- Book Value: ₹514; CMP/BV: 2.3x – not outrageous, but P/E kills the vibe.
- Fair Value Range: ₹600–₹850
Paying 100x earnings here is like tipping 500 bucks for a cutting chai.
6. What’s Cooking – News, Triggers, Drama
- Subsidiaries (Metacast Auto, DriveSys) got new factories and “mega project” incentives.
- Rs. 200 Cr lawsuit for trademark infringement—because corporate drama is a must.
- Raised Rs. 200 Cr via equity in Aug 2024.
- Electric component expansions sound cool, but still early days.
7. Balance Sheet
| ₹ Cr | Mar 24 | Mar 25 |
|---|---|---|
| Assets | 594 | 636 |
| Liabilities | 594 | 636 |
| Net Worth | 458 | 466 |
| Borrowings | 77 | 100 |
Debt creeping up like an annoying relative.
8. Cash Flow – Sab Number Game Hai
| ₹ Cr | FY23 | FY24 | FY25 |
|---|---|---|---|
| Ops CF | 49 | 35 | 39 |
| Inv CF | -63 | -52 | -65 |
| Fin CF | 12 | 29 | 16 |
Operating cash okay, but capex is eating into free cash like a hungry teenager.
9. Ratios – Sexy or Stressy?
| Metric | FY25 |
|---|---|
| ROE | 3% |
| ROCE | 6% |
| D/E | 0.21 |
| PAT Margin | 2% |
| P/E | 102x |
Sexy? No. Stressy? Absolutely.
10. P&L Breakdown – Show Me the Money
| ₹ Cr | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 450 | 478 | 494 |
| EBITDA | 57 | 52 | 53 |
| PAT | 25 | 44 | 10 |
Revenue flat, profits nose-dived. EPS fell from ₹48 to ₹14.
11. Peer Comparison
| Company | P/E | ROE | CMP/BV |
|---|---|---|---|
| Bosch | 55x | 16% | 8x |
| Bharat Forge | 62x | 11% | 6.2x |
| Uno Minda | 67x | 17% | 10.9x |
| ZF Steering | 102x | 3% | 2.3x |
Looks like the drunkest guest at an otherwise posh auto components party.
12. Miscellaneous – Shareholding, Promoters
Promoters hold a strong 66.9%. Public owns 33%. FIIs and DIIs? Barely visible. Clearly, this is a family-driven ship with no institutional captain.
13. EduInvesting Verdict™
ZF Steering is steering into a fog of high valuation and low profitability. Growth in subsidiaries could be a silver lining, but for now, this ride feels like paying for a Ferrari and getting a Maruti 800 experience.
Written by EduInvesting Team | 26 July 2025
Tags: ZF Steering Gear India, Auto Components, High P/E Stocks, Small Cap Analysis, EduInvesting Premium
