Auto Ancillary Stock Skyrockets 17% After Reporting a Turnaround From Losses to Profits in Q3

Synopsis: Z F Steering Gear jumped sharply after reporting a stellar turnaround in Q3 FY26, where its revenue climbed by 22% YoY, EBITDA grew by a stagegring 124% and posting a profit of Rs 7.28 crore versus losses in the previous year and quarter.

The shares of this auto ancillary company, engaged in the business of production & assembling of steering systems for vehicles, buses, and tractorsc are in focus after it reported a stellar turnaround in this quarter. In this article, we will dive more into the details of it.

With a market capitalisation of Rs 746 crore, the shares of Z F Steering Gear (India) Ltd reached a day-high of Rs 884.95 per share, up 17 percent from its previous day’s closing price of Rs 754.60 per share. Over the past five years, the stock has delivered an 88 percent return, outperforming NIFTY 50’s return of 70 percent.

Q3 Highlights

The revenue from operations for Z F Steering stands at Rs 143.23 crores in Q3 FY26 compared to Q3 FY25 revenue of Rs 117.58 crores, up by 22 per cent YoY. Additionally, on a QoQ basis, it reported a growth of 19 percent from Rs 120.56 crore. 

Coming to its sales mix, the company derived Rs 141.98 crore of its revenue from the Auto components segment, which grew by 21 percent YoY, followed by Rs 2.76 crore from the Renewable Energy segment, which grew by 25 percent and the remaining Rs 2.16 crore from other segments, which grew by a staggering 135 percent.

Also, EBITDA stood at Rs 23.56 crore in Q3 FY26, a staggering growth of 124 percent as compared to Rs 10.52 crore in Q3 FY25. Additionally, on a QoQ basis, it reported a growth of 91 percent from Rs 12.36 crore. Also, coming to the margins front, EBITDA margins grew by a staggering 750 bps YoY and by 620 bps QoQ, reaching 16.45 percent in Q3 FY26.

Coming down to its profitability, the company’s net profit stood at Rs 7.28 crore in Q3 FY26, a sharp positive turnaround as compared to a loss of Rs 1.73 crore in Q3 FY25 and a loss of Rs 1.50 crore in Q2 FY26. The company’s profit mainly grew because sales grew much faster than its expenses, which is 22 percent vs 12 percent, and this is also known as operating leverage kicking in.

ZF Steering Gear (India) Ltd. (ZF India) is a leader in Indian Vehicle Steering Systems, which was formed in 1981 as a joint venture with ZF Friedrichshafen AG. Situated near Pune, ZF India manufactures hydraulic power steering gears, mechanical steering systems, vane pumps, steering columns, and other parts, with the support of advanced in-house design, heat treatment, machining, and testing capabilities.

ZF India, with an IATF 16949 certification, uses lean manufacturing processes and has a broad service network throughout India and the export markets, supplying major OEMs and emphasising high reliability, safety, and precision engineering in safety, critical steering technologies.

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