Why Is ZF Steering Gear Up 15% in Today’s Trading Session?

Synopsis: ZF Steering Gear (India) Limited’s subsidiary, Drivesys Systems, has secured a ₹151 crore domestic order to manufacture and supply machined aluminium components for a renewable energy project over 15 months.

This Auto Ancillary Stock, engaged in designing and manufacturing steering systems and related components for commercial vehicles, tractors, buses, and light vehicles in India and selected export markets, jumped 15.03 percent after receiving a domestic order worth Rs. 151 crore for a renewable energy project.

With a market capitalization of Rs. 718.15 crores, the share of Z F Steering Gear (India) Limited has reached an intraday high of Rs. 852 per equity share, rising nearly 15.03 percent from its previous day’s close price of Rs. 740.65. Since then, the stock has retreated and is currently trading at Rs. 791.50 per equity share. 

ZF Steering Gear (India) Limited has announced that its wholly owned subsidiary, Drivesys Systems Private Limited (Aluminium Division), has secured a significant domestic order valued at approximately Rs. 151 crore. 

The order has been awarded by a leading Indian business conglomerate for its renewable energy operations. It involves the manufacturing and supply of machined aluminium components, with pricing linked to NALCO base metal prices on a CIF basis. The execution period for the order is 15 months. 

ZF Steering Gear (India) Limited was started in 1981 as a joint venture with Germany’s ZF Friedrichshafen AG. The company set up its main plant near Pune, Maharashtra, in Vadu Budruk, tapping into the region’s automotive hub with clients like Tata Motors and Mahindra.

ZF Steering Gear (India) Limited’s plant currently has an installed capacity of 2,00,000 units of worm and roller mechanical steering gears and 3,75,000 units of ball and nut integral hydraulic power steering gears. 

The company has developed a strong service and spare parts network of around 60 dealers spread across India, Nepal, the Middle East, South Africa, and Bangladesh.

The company mainly makes and supplies steering systems for commercial vehicles, tractors, buses, and some light vehicles. ZF Steering Gear (India) Limited’s key products include ball and nut integral hydraulic power steering gears for heavy-duty use, worm and roller mechanical steering systems, plus accessories like vane pumps, steering columns, drop arms, and universal joints.

The company has planned a significant capital expenditure outlay of around Rs. 150 crore over FY2026–FY2027. This investment is aimed at supporting growth and capacity expansion and will be funded through a balanced mix of internal accruals and external borrowings, ensuring financial flexibility while meeting long-term business objectives.

Coming into financial highlights, Z F Steering Gear (India) Limited’s revenue has increased from Rs. 111.17 crore in Q2 FY25 to Rs. 120.56 crore in Q2 FY26, which has grown by 8.45 percent. The net profit of the company has turned from positive to negative, from a net profit of Rs. 1.72 crore in Q2 FY25 to a net loss of Rs. 1.50 crore in Q2 FY26. Z F Steering Gear (India) Limited’s revenue has grown at a CAGR of 16.43 percent over the last three years.

In terms of return ratios, the company’s ROCE and ROE stand at 5.62 percent and 3.22 percent, respectively. Z F Steering Gear (India) Limited has an earnings per share (EPS) of Rs. 11.7, and its debt-to-equity ratio is 0.23x.

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