Anand Rathi is bullish on ZF Commercial Vehicles and has recommended a buy rating on the stock. In its research report dated May 18, 2025, the brokerage set a target price of Rs 16,000, up from the earlier Rs 15,700. This comes amid strong quarterly performance and promising future growth backed by new government regulations.
What’s Driving the Optimism on ZF Commercial Vehicles?
In Q4, ZF Commercial Vehicles posted an EBITDA of Rs 1.73 billion, up 17% year-on-year, despite slightly missing analyst expectations of Rs 1.79 billion. Revenue was lower than expected but the earnings growth impressed investors.
The real excitement, however, lies in the government’s draft notification on Advanced Driver Assistance Systems (ADAS). Starting October 2026, new safety regulations will require Commercial Vehicles (CVs) — including trucks over 3.5 tonnes and buses above 5 tonnes — to be equipped with ESC (Electronic Stability Control), AEBS (Automatic Emergency Braking System), and four other ADAS functions. This opens up a huge content opportunity worth over Rs 65,000 per vehicle.
Furthermore, the ESC regulation will come into force for most bus segments by September 2025, adding to the demand for ZF’s technology.
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What Does This Mean for You and the Market?
If you think this sounds like just another tech update, think again. For the average investor or someone tracking India’s booming infrastructure and transport sectors, this means big growth potential.
ZF Commercial Vehicles, already a dominant player in medium and heavy commercial vehicles (M&H CV) and light commercial vehicles (LCVs), is set to benefit handsomely from these regulatory tailwinds.
The company plans to enter the LCV segment using its global portfolio, aiming for €90 million sales by 2030. This is important because India’s CV sector is expected to grow at a steady 5% compound annual growth rate (CAGR) between FY25 and FY27, powered by infrastructure projects and economic activity.
Exports might see a short-term slowdown, but ZF’s export revenues will likely outperform the industry thanks to increased sourcing from its global group companies.
Why Should Investors Care?
The forecast looks strong: Anand Rathi expects 12% revenue growth, 14% EBITDA growth, and 15% profit after tax (PAT) growth from FY25 to FY27. The buy rating with a higher target price of Rs 16,000 reflects confidence that ZF Commercial Vehicles will more than double its content per vehicle due to these regulations.
So, if you like stocks with solid growth backed by government policies and technological upgrades, ZF Commercial Vehicles should be on your radar.
Here’s a quick takeaway for your next coffee chat: ZF Commercial Vehicles is gearing up to outfit trucks and buses with safety tech so smart, it might soon tell drivers, “Hey, ease up!”
Think of it like your truck getting a smart assistant—not Alexa, but safer brakes and stability controls. Meanwhile, investors get to enjoy a juicy target price hike, which makes the ride smoother for their portfolios.
Disclaimer:
This article is for information only and not financial advice. Please do your own research or talk to a financial expert before investing. Investing has risks, and past results don’t guarantee future success.
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