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    ZF Commercial Vehicle Control Systems India Q1 FY27 earnings call

    ZFCVINDIA
    Automobile and Auto Components·28 Jul 2026
    Management Summary

    ZF Commercial Vehicle Control Systems India Limited reported a mixed Q1 FY27, with strong operational growth in key segments like CV >6T sales (8.6%) and Aftermarket (15.6% YoY). Export revenues also saw a healthy 9.7% increase. However, reported PAT declined by 14.7% due to the absence of one-off FX gains and higher one-time income present in the base quarter, alongside current quarter FX losses and external cost headwinds. The company is focused on strategic priorities including ESC expansion and new technology introduction to mitigate these challenges.

    Highlights

    5

    • Sales in the CV >6T segment grew by 8.6%, marginally ahead of the industry's 8.4% growth, reflecting effective market execution.

    • Aftermarket business delivered a strong performance with sales of ₹158.4 crore, a 15.6% year-on-year increase, driven by improved fleet utilization and replacement demand.

    • Export revenues of ₹271.4 crores in Q1 FY26-27, registering a 9.7% year-on-year growth, supported by improved market demand and new product introductions.

    • Profit Before Tax (PBT) excluding FX gains/losses and one-time items stood at ₹140.8 crores, representing a strong 16.9% growth compared to Q1 of the previous financial year.

    • The company secured business nominations from three major OEMs for Electronic Stability Control (ESC) solutions, reinforcing its leadership in advanced braking technologies.

    Concerns

    3

    • Profit After Tax (PAT) amounted to ₹104.5 crores, with a de-growth of 14.7%, primarily due to the absence of a significant FX gain (₹39 crores) and higher one-time income (₹4.7 crores) in the prior year.

    • The trailer segment witnessed a decline during the quarter, primarily due to slower mining activity, monsoon-related disruptions, and higher input costs.

    • The company faced external headwinds including Forex volatility, commodity, energy, and consumable price increases, and an industry-wide shortage of blue-collar manpower during April and May.

    Key financials

    Single quarter

    06 metrics
    1. 01Total Income₹1,101.8 Cr+5.7%YoY
    2. 02Revenue from Operations Growth9.3%
    3. 03PAT₹104.5 Cr-14.7%YoY
    4. 04PBT (excl. FX/One-time)₹140.8 Cr+16.9%YoY
    5. 05Aftermarket Sales₹158.4 Cr+15.6%YoY

    Segment breakdown

    CV >6T Segment
    8.6% Sales Growth
    Aftermarket
    ₹158.4 Cr Sales15.6% YoY Growth
    Exports
    ₹271.4 Cr Revenue9.7% YoY Growth
    Services Exports
    12.5% YoY Growth
    List

    Guidance & targets

    2
    CategoryTargetPriority
    Services
    Services Growth
    ~7.5%
    		Medium
    Localization
    ESC Localization Level
    >75%
    		High

    What to watch in Q2 FY27

    4

    Gross Margin Recovery from Commodity Costs

    next quarter
    CurrentSome portion of recovery realized, others under discussion
    TargetSecuring further recoveries from OEMs

    Why it matters

    Directly impacts profitability and reflects the effectiveness of pricing actions and OEM negotiations.

    I would say we have already recovered one portion of it, but there are others where there are ongoing discussions with OEMs as they recalibrate their own internal activities and their books. So this is also something that we will be securing over the next quarter.

    Risks & concerns

    4
    RiskSeverity

    External Headwinds (Forex, Commodity, Energy Prices)

    Volatility in Forex, key commodity, energy, and consumable prices driven by geopolitical developments impacting production costs. — Management acknowledged

    medium

    Blue-collar Manpower Shortage

    Widespread shortage across India during April and May, affecting production across the industry. — Management acknowledged

    low

    Trailer Segment Decline

    Slower mining activity, monsoon-related disruptions, and higher input costs weighed on market demand for trailers. — Management acknowledged

    low

    Geopolitical Uncertainties

    Makes it difficult to provide precise guidance for export revenue growth, despite a positive outlook. — Management acknowledged

    medium

    Q&A highlights

    7

    “And to answer you, yes, as we have been nominated with most of the major OEMs, we would be retaining our majority position in the market, and we will continue to work with them on ABS plus ESC solutions, which we are offering across the Indian market. So I think during the last call, it was also mentioned that today, the market has provided several options that are available, wherein the AEBS, ADAS portfolio can be disconnected from the braking, and there are many service providers that offer this solution in the market.”

    Clarifies ZF's competitive positioning in the evolving ADAS market, indicating focus on ABS+ESC while acknowledging standalone ADAS solutions from other players.

    asked by Mukesh Saraf

    2 min read5 chapters

    Detailed Narrative

    01

    Q1 FY27 Financial Performance Overview

    ZF Commercial Vehicle Control Systems India Limited reported a total income of ₹1,101.8 crores for Q1 FY27, marking a 5.7% year-on-year growth, with revenue from operations growing by 9.3%. However, Profit After Tax (PAT) declined by 14.7% to ₹104.5 crores. This de-growth was primarily attributed to the absence of a significant FX gain of ₹39 crores and higher one-time📎 income of ₹4.7 crores recorded in the prior year, coupled with a current quarter FX loss of ₹1.98 crores and lower one-time📎 income of ₹1.2 crores.

    02

    Operational Growth and Market Share

    The company's sales in the CV >6T segment grew by 8.6%, marginally outpacing the industry's 8.4% growth, reflecting effective market execution. The Aftermarket business delivered a strong performance with sales of ₹158.4 crore, a 15.6% year-on-year increase, driven by improved fleet utilization and replacement demand. Exports also saw a healthy 9.7% year-on-year growth, reaching ₹271.4 crores, supported by increased volumes of key products and new product introductions for North American customers.

    03

    Strategic Focus on Advanced Technologies

    ZF CVCS is actively expanding its presence in Electronic Stability Control (ESC) solutions, having secured nominations from three major OEMs and progressing discussions with others. The company is accelerating the introduction of new technologies, including upgraded compressor platforms, ECAS, EBS, and e-compressors for electric vehicle applications, with ESC localization expected to exceed 75% by Start of Production (SOP). The company also showcased advanced technologies at Prawaas 5.0, receiving strong customer appreciation for Door Control Systems.

    04

    Industry Outlook and Headwinds

    The Indian economy demonstrated resilience with GDP growth of 7.7% in FY26, and the commercial vehicle industry saw 8.4% production growth in Q1 FY27. Despite this positive backdrop, the company faced headwinds such as Forex volatility, increased commodity and energy prices (e.g., aluminum from ₹260/kg to ₹360/kg), and a blue-collar manpower shortage. Management is engaging with OEMs for commodity and FX cost recovery, with some already realized, though geopolitical conflicts have extended the typical 2-quarter lag for these pass-throughs.

    05

    Leadership Changes and Operational Excellence

    During the quarter, the company announced the appointment of Mr. Rakesh Mishra as Chief Financial Officer, effective September 1, 2026, and Ms. C.V. Kavviya as Whole-Time Company Secretary & Compliance Officer, effective July 25, 2026. The company continued its operational excellence journey, commissioning new assembly lines for brake actuators and valves at Jamshedpur, Lucknow, and Pantnagar, and received prestigious industry accolades like the CII Gold Award and Spotlight Award for Decarbonization and Climate Action for its Ambattur Plant.

    This is an AI-generated summary of a publicly available earnings call transcript.