ZF Commercial Vehicle Control Systems India Limited

Consumer Cyclical — Auto Parts · NSE

₹2,169.70+₹10.80 (+0.50%)

DalalBaazaar Score

69 / 100

🟢 Good

Verdict

REASONABLE

Risk

Moderate

Driven by moderate debt load, small-cap size, which brings sharper price swings, falling profits.

In simple words: Strong business and financial position, though profits are falling even as sales grow. The direction of profits is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:02 pm

Understanding the Business

Company site ↗

The 60-second version of ZF Commercial Vehicle Control Systems India Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

ZF Commercial Vehicle Control Systems India Limited manufactures and sells air brake actuation systems for commercial vehicles in India and internationally.

IndustryAuto Parts

SectorConsumer Cyclical

Employees2,491

Annual revenue₹4,091 Cr

How does it make money?

Turns over ₹4,091 Cr a year. Of every ₹100 of sales, about ₹13 reaches shareholders as profit, with ₹20 left at the operating level before interest, tax and depreciation. Each of its 2,491 employees supports ₹1.64 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.64 Cr

Who are its competitors?

The closest listed comparisons in its industry are BOSCH LIMITED, MARUTI SUZUKI INDIA LTD., TVS MOTOR COMPANY LTD, EICHER MOTORS LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Some evidence

ROCE of 18.5% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

Peer median ROE23.0%

What is the outlook?

4 analysts covering the stock expect revenue to grow about 26.8% and earnings to grow about 32.3% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+26.8%

Est. earnings growth+32.3%

Analysts4

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +20% while net margin moved +36% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+20%

Margin effect+36%

DalalBaazaar Score

69/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Revenue CAGR of only 6.2% — barely ahead of inflation
✓ Profit CAGR of 17.6% is above 15%
✗ Profit fell 14.6% in the latest year

Quality vs. Valuation

Company Quality

69/ 100

Good

How good the business is, ignoring the share price entirely.

Valuation

73/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

A good business currently available at an undemanding price — the combination this framework is built to look for.

Historical Valuation

Current P/E

2.3x

3Y Median

61.7x

40 monthly readings · mean 68.7x · range 47.5x–104.0x

Sector Median

45.7x

median of 4 sector peers

🟢Current valuation is approximately 96% below its 3y median of 61.7x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟢Against its sector it trades 95% below the peer median of 45.7x.

vs. its own history

Cheap

61.7x median over 40 months · -96%

vs. sector peers

Cheap

45.7x median of 4 peers · -95%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

30.2x

PEG

0.13

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 15.8% to 19.9% over 3 years.
Debt is being paid down
Total debt is down 16% over 3 years.
Cash generation is improving
Free cash flow is up 289% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

1 item require attention · 1 watch

🟡Inventory building faster than salesFinancial
Inventory up 79% against revenue up 20% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 18.5% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Margin expansion has further to run
EBITDA margin has risen from 15.8% to 19.9%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Deleveraging frees up earnings
Debt is down 16% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Priced below its own history
The stock trades 96% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Cheaper than its peers
It trades 95% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.

🔴 Bear CaseWhat could go wrong?

Growth barely outpaces inflation
Revenue compounding at 6.2% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
Size brings its own risk
Small Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 18%✓ 19.9%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Revenue growth stays above 5% a year✓ 6.2% CAGR
Latest reported year was 9.3%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
3Free cash flow remains positive✓ ₹664 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.1x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 16%✓ 18.5%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

8 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✗ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

4 good · 5 neutral · 2 weak

Market Cap

₹24,692 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

2.3x

Cheap

Cheap against the generic band

P/B Ratio

6.69x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹952.69

Profitable

Profitable on a per-share basis

ROE

14.0%

Moderate

Moderate capital efficiency

ROCE

18.5%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

1.49x

Moderate

Moderate leverage

Revenue Growth (YoY)

9.3%

Modest

Modest growth

Profit Growth (YoY)

-14.6%

Falling

Profits are shrinking

Dividend Yield

0.18%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹664 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

32.6x

Flat

At or above the trailing multiple — no earnings uplift is being priced in

Operating Margin

9.9%

Average

Average margins

Net Margin

11.9%

Good

Strong bottom-line conversion

Current Ratio

5.30

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.00

Defensive

Steadier than the market

52W Range Position

12%

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

2244.6 / 2441.7

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

28.8

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹3,416 Cr	₹3,784 Cr	₹3,794 Cr	₹4,091 Cr	+6.2%
EBITDA	₹539 Cr	₹658 Cr	₹731 Cr	₹813 Cr	+14.7%
EBITDA Margin	15.8%	17.4%	19.3%	19.9%	—
PAT (Net Profit)	₹318 Cr	₹406 Cr	₹461 Cr	₹517 Cr	+17.6%
EPS	₹27.91	₹35.71	₹40.48	₹45.44	+17.6%
ROE	13.2%	14.6%	14.3%	14.0%	—
ROCE	17.4%	19.2%	18.7%	18.5%	—
Total Debt	₹65 Cr	₹68 Cr	₹66 Cr	₹55 Cr	-5.7%
Free Cash Flow	₹171 Cr	-₹5 Cr	₹120 Cr	₹664 Cr	+57.3%

🟢 Revenue has grown at 6.2% a year over 3 years.

🟢 EBITDA has grown at 14.7% a year over 3 years.

🟢 EBITDA Margin has risen from 15.8% to 19.9% over 3 years (+4.1 pts).

🟢 PAT (Net Profit) has grown at 17.6% a year over 3 years.

🟢 EPS has grown at 17.6% a year over 3 years.

🟡 ROE has held roughly flat at 14.0% over 3 years.

🟢 ROCE has risen from 17.4% to 18.5% over 3 years (+1.1 pts).

🟢 Total Debt has shrunk at 5.7% a year over 3 years.

🟢 Free Cash Flow has grown at 57.3% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹4,425 Cr

Total Liabilities

₹735 Cr

Cash & Equivalents

₹192 Cr

Operating Cash Flow

₹810 Cr

Capex

-₹146 Cr

Shareholding (proxy)

Institutional Holding

26.4%

Insider Holding

60.3%

Corporate Actions

Dividend Rate

₹4

Ex-Dividend Date

10 Jul 2026

Analyst Consensus

Recommendations

4 Buy · 0 Hold · 0 Sell

Target Price (Mean)

₹2,878.25

+32.7% vs CMP

Target Range

₹2,600 – ₹3,060

Peer Comparison

Company	P/E	ROE
BOSCH LIMITED	56.9x	15.9%
MARUTI SUZUKI INDIA LTD.	25.2x	13.4%
TVS MOTOR COMPANY LTD	56.8x	35.8%
EICHER MOTORS LTD	34.7x	23.0%

Recent News

1 positive1 mixed4 general

ZF Steering Gear (India) Share Price - Live NSE: ZFCVINDIA Stock Price & Chart

Upstox, 16 Oct

Is Now The Time To Put ZF Commercial Vehicle Control Systems India (NSE:ZFCVINDIA) On Your Watchlist?

Simply Wall Street, 08 Jul

ZF Commercial Vehicle Control Systems India Share Price Near

Univest, 09 Oct

ZFCVINDIA Forecast — Price Target — Prediction for 2027

TradingView, 26 JunAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

ZF Commercial Vehicle Control Share Price Jumps 8% To Hit 52-Week High On 5:1 Bonus Issue

NDTV Profit, 24 JunCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

ZF Commercial Vehicle Control Systems India holds investor meet

scanx.trade, 21 Sept

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

StrongBusiness Quality · Financial Health · Growth · Profitability · Valuation · Risk

Points for each in the Score ↑

Attractive on both counts

A good business currently available at an undemanding price — the combination this framework exists to look for. The work left is qualitative: whether the advantage the numbers imply is one you can identify and expect to last.

All 5 tripwires holding · see Key things to watch ↑