Force Motors Ltd

Force Motors delivered a robust financial performance in FY25, with revenue growing by approximately 16%, EBITDA by 21%, and Profit Before Tax (excluding exceptional items^📎) by 36%. The Return on Capital Employed (ROCE) saw a significant increase of 35%, reaching almost 43%. The company's market capitalization also grew substantially from ₹6,500 crores to ₹9,000 crores as of March 31, 2025, reflecting investor confidence in its operational improvements.

The company's sharpened focus on specific market segments has yielded strong results. In the T1 segment, which includes the Traveller and Urbania, Force Motors achieved an impressive market share of almost 77%. The T2 (26-seater Traveller) segment also saw growth, reaching close to 19% market share, while the Monobus platform secured about 7% market share. The component business, supplying to global players like Mercedes-Benz and BMW, also grew by almost 16% last year, providing a stable ballast to the vehicle business.

Force Motors spent approximately ₹370 crores on CAPEX in FY25 and plans to spend around ₹400 crores in FY26. A significant CAPEX of ₹2,000 crores is planned over the next 1.5 years, primarily for engineering new products, upgrading existing ones, adopting new technologies, and investing ₹150 crores in digitization. The company successfully paid back about ₹500 crores of debt in FY25, reducing its debt to ₹17 crores by year-end, and achieved a completely debt-free status as of Q1 FY26, predominantly funding its investments through internal accruals.

The company is aggressively pursuing international expansion, particularly with its Urbania and Traveller platforms. The Urbania, currently producing 500-600 units per month, is targeted to ramp up to approximately 1,000 units per month as new international markets open. The international business is projected to achieve at least 100% growth in FY26. Additionally, a major upgrade program for the Traveller and 26-seater Traveller platforms is underway, with new products expected to launch in Q1 FY27, aiming to boost international sales.

A significant concern raised by shareholders pertains to the non-tradability of A Equity Shares, which were issued to employees 40 years ago. The Chairman acknowledged this as a complex issue stemming from historical government regulations, stating that despite personal efforts and discussions with ministers, it remains 'not easy to entangle.' The company continues to pursue a resolution to allow these shares to become equally tradable, aiming to reward long-term employee investors.

For FY26, Force Motors anticipates a strong year, targeting 12-15% volume growth and 14-15% revenue growth. The spare parts business is expected to grow by over 20%. The company remains focused on its core segments, aiming to create more niche and profitable variants, and will bring out EV platforms when the market is deemed ready. The management expressed confidence in sustaining and growing EBITDA margins, supported by favorable GST rationalization that has reduced duties on certain products from 43% to 18%.