With the recent changes coming to fore, ZF Steering Gear (India) is looking up. Prateek Pardeshi looks at the key drivers.

Robert Bosch Automotive Steering GmbH (RBAS) and the Munot Family are the major shareholders of ZF Steering Gear (India) Ltd. (erstwhile ZF Lenkystene GmbH). After RBAS purchased a 100 per cent stake in ZF Lenksysteme GmbH, to turn a majority shareholder, it was renamed ZF Steering India. Known to manufacture, assemble, and sell steering gears, with a focus on both mechanical and hydraulic power steering gears. The production facilities are spread across Pithampur, Madhya Pradesh, and Shirur, Maharashtra. The Munot family owned 41.62 per cent of the business as of December 31, 2022, and RBAS held 25.79 per cent of the company. The recent sale of equity in the Company by RBAS to the Munot family sent the share market in a frenzy.

Reflecting on the share valuation of the company, ZF Steering India is witnessing incremental growth. In FY21-22, the company reported sales were Rs.3,128 million compared to Rs.88.5 million a year ago (FY20-21). PAT stood at Rs.182.7 million compared to Rs. 88.5 million in the same period. With Dinesh Munot and Utkarsh Munot acquiring a 25.79 per cent stake in ZF from Robert Bosch Automotive Steering GmbH for approximately Rs. 940 million, there is bound to be interest on the forward outlook. In an organisational change, Sandeep Nelamangala has tendered his resignation from the office of Non-Executive, Non-Independent Director of the Company, with effect April 05, 2023.

Domestic aspirations

Boosting its domestic aspirations, the stable rating is a testimony to the tier 1 supplier’s healthy credit profile, supported by a net debt-free status, low use of working capital lines, and high liquidity in the form of free cash and liquid investments. The scores also continue to take into account ZF’s enviable leadership in the domestic power steering market and long-standing associations with significant Original Equipment Manufacturers (OEMs) in the domestic tractor and commercial vehicle markets. Credit rating agencies like ICRA are keeping a close eye on the recent developments. Based on a review of these, the Rating Committee of ICRA, after due consideration has reaffirmed the long-term rating at ICRA A+. It has also reaffirmed the short-term rating at A+. The outlook on the long-term rating is ‘stable’. Strong standing in the local M&HCV and tractor steering systems market; established connections with top OEMs are the USPs expected to hold it in good stead going forward. ACI


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