How has been the historical performance of Z F Steering?

Revenue Growth and Operating Income Trends

Over the past several years, Z F Steering's net sales have shown a consistent upward trend, rising from ₹312.80 crores in the fiscal year ending March 2022 to ₹493.87 crores in March 2025. This represents a significant recovery and expansion compared to earlier years, where sales hovered around the ₹435-447 crore range between 2017 and 2019. The total operating income mirrors this growth pattern, with no other operating income reported, indicating that the company’s core business activities are the primary revenue drivers.

Raw material costs have naturally increased in line with sales, reaching ₹313.85 crores in March 2025, though the company has managed to control inventory fluctuations and employee costs, which have risen moderately to ₹71.39 crores in the latest fiscal year. Manufacturing expenses and other operating costs have varied, with other expenses notably increasing to ₹56.29 crores in March 2025 from lower levels in previous years.

Profitability and Margins

Z F Steering’s operating profit before depreciation and interest (PBDIT) excluding other income has fluctuated, peaking at ₹88.23 crores in March 2018 before declining to ₹53.12 crores in March 2025. Including other income, operating profit stood at ₹73.84 crores in the latest fiscal year, down from ₹86.59 crores in March 2024. Interest expenses have increased notably to ₹6.56 crores in March 2025, impacting gross profit before tax, which fell to ₹67.28 crores from higher levels in previous years.

Profit before tax has seen a decline from ₹63.19 crores in March 2017 to ₹24.50 crores in March 2025, with profit after tax following a similar pattern, dropping from ₹49.72 crores in 2017 to ₹12.59 crores in 2025. The consolidated net profit also reflects this trend, standing at ₹14.92 crores in March 2025 compared to ₹43.69 crores in March 2024. Earnings per share have correspondingly decreased to ₹16.45 in March 2025 from a high of ₹48.17 in March 2024.

Balance Sheet and Financial Position

The company’s shareholder funds have grown steadily, reaching ₹465.91 crores in March 2025 from ₹264.32 crores in 2017, supported by increasing reserves. Total liabilities have also risen, reflecting higher borrowings and current liabilities, with total debt showing a notable reduction to zero in March 2025 after being ₹72.53 crores in March 2024. The net block of fixed assets has expanded to ₹214.19 crores, indicating ongoing capital investment, while capital work in progress remains moderate.

Current assets have increased to ₹194.54 crores, with inventories and sundry debtors rising in line with business growth. Cash and bank balances, however, have fluctuated, with a low closing balance in the latest fiscal year. Contingent liabilities have increased to ₹58.54 crores, which investors should monitor closely.

Cash Flow Analysis

Operating cash flow has remained positive, though it has moderated to ₹39 crores in March 2025 from ₹72 crores in 2019. Investing activities have consistently shown cash outflows, reflecting capital expenditure and investments, with ₹65 crores spent in the latest year. Financing activities have provided some inflows recently, supporting liquidity, but the net cash position ended with a slight outflow of ₹10 crores in March 2025.

Summary of Historical Performance

In summary, Z F Steering has experienced solid revenue growth over the last several years, recovering strongly from a dip in 2022. Profitability margins have contracted from their peaks, influenced by rising costs and interest expenses. The company’s balance sheet shows strengthening equity and controlled debt levels, while capital investments continue to support future growth prospects. Cash flow remains positive from operations but is tempered by significant investing outflows.

Investors should weigh the company’s growth trajectory against the recent margin pressures and cash flow dynamics. The steady increase in shareholder funds and asset base provides a foundation for long-term value creation, though near-term profitability volatility warrants close attention.

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