Z F Steering Gear Adjusts Quality Grade Amid Mixed Financial Performance and Operational Concerns

Z F Steering Gear (India), a microcap player in the auto components and equipment sector, has recently undergone a quality adjustment in its evaluation. The company's financial metrics reveal a mixed performance landscape. Over the past five years, Z F Steering has experienced a sales growth rate of 7.70%, which stands out positively. However, the EBIT growth during the same period has shown a significant decline of 28.65%, raising concerns about operational efficiency.
In terms of financial stability, the company's EBIT to interest ratio averages at 14.13, indicating a reasonable ability to cover interest expenses. The debt to EBITDA ratio is recorded at 3.84, suggesting a higher leverage position, while the net debt to equity ratio remains low at 0.13, reflecting a conservative capital structure. The sales to capital employed ratio is at 0.69, which may indicate room for improvement in asset utilization.

When compared to its peers, Z F Steering's performance metrics reveal a challenging environment, particularly in terms of return on capital employed (ROCE) and return on equity (ROE), which average at 3.08% and 5.12%, respectively. This evaluation revision highlights the need for Z F Steering to address its operational challenges while navigating a competitive landscape.