Synopsis: Foreign investors are steadily increasing their stake in Force Motors, rising from 2.7 percent in 2022 to 10.3 percent in 2025, signaling strong confidence. With impressive revenue and profit growth, the company is on an exciting path; read on to find out why FIIs are betting big and what this could mean for its future.
Foreign Institutional Investors have been steadily increasing their stake in this automobiles manufacturing stock, signalling strong confidence in the company’s long-term growth potential. Their continued buying interest usually reflects improving fundamentals, stable demand visibility, and a belief that the company is well-positioned to benefit from industry tailwinds. Read the article below to understand why FIIs are showing growing conviction in this stock.
Force Motors Limited, with a market capitalization of Rs. 23,420.15 crore, closed at Rs. 17,970 on Friday, up by 3.85 percent from its previous day’s close price of Rs. 17,304 per equity share.
Shareholding Pattern
As of September 2025, Force Motors Limited’s shareholding pattern shows that promoters hold 61.63 percent, FIIs hold 10.27 percent, DIIs hold 1.48 percent, and public shareholders hold 26.63 percent.
Over the past three years, foreign investors have steadily increased their faith in Force Motors. FII shareholding has risen consistently from 2.71 percent in December 2022 to 10.27 percent in September 2025. This sharp and continuous rise shows that global investors see improving prospects in the company.
Stock Return
The stock has shown mixed performance in the short term but delivered strong gains over longer periods. In the past three months, it recorded a slight decline by 5.13 percent, while the six-month return jumped to 28.63 percent. The one-year performance has been exceptional at 171.86 percent, and over five years, the stock has delivered an impressive return of 1,194.67 percent, highlighting its long-term wealth-creating potential.
What Makes This Stock a Top Pick for FIIs
Consistent Financial Returns
One of the main reasons foreign institutional investors (FIIs) favor this stock is its track record of strong financial performance. Over the past three years, the company has delivered a revenue CAGR of 36 percent, showing robust top-line growth. Even more impressive is the net profit CAGR of 100 percent during the same period, reflecting not only growth in revenue but also strong operational efficiency and effective cost management. Such consistent financial returns make the stock highly attractive to long-term institutional investors looking for reliable growth.
Gradual Reduction of Debt
Another key factor boosting FII interest is the company’s strong balance sheet management. The company has steadily reduced its debt from Rs. 1,069 crore in March 2022 to zero in September 2025. This debt-free position strengthens financial stability, reduces interest burden, and allows the company to reinvest cash flows into growth initiatives. A clean balance sheet is particularly appealing to FIIs who prioritize low-risk investments with strong growth potential.
Positive Cash Flow Generation
Cash flow is a critical indicator of financial health, and this company has shown impressive results. As of March 2025, operating cash flow stood at Rs. 971 crore, while net cash flow was Rs. 58 crore. Strong operating cash flows indicate that the business generates sufficient cash from its core operations, ensuring sustainability, funding for expansion, and potential shareholder returns. Positive cash flow reassures institutional investors that the company can continue growing without over-reliance on external financing.
Attractive Valuation and Long-Term Potential
The combination of consistent returns, debt-free status, and positive cash flows makes the stock appealing even from a valuation perspective. Currently, the stock trades at a P/E of 28.8x, which is lower than the industry average P/E of 34.2x, indicating relative undervaluation. For FIIs, long-term potential and resilience during market fluctuations are critical factors. Companies with strong fundamentals and growth visibility tend to receive higher institutional allocations, further supporting stock price stability and upward momentum.
Financial Outlook
Force Motors reported revenue of Rs. 2,081 crore in Q2FY26, up 7.2 percent year-on-year from Rs. 1,941 crore in Q2FY25, but down 9.4 percent quarter-on-quarter from Rs. 2,297 crore in Q1FY26. EBITDA rose to Rs. 363 crore in Q2FY26, increasing 31 percent year-on-year from Rs. 277 crore in Q2FY25 and 12.4 percent quarter-on-quarter from Rs. 323 crore in Q1FY26, reflecting improved operational efficiency and cost management.
Net profit surged to Rs. 351 crore in Q2FY26, rising 160 percent year-on-year from Rs. 135 crore in Q2FY25 and 99 percent quarter-on-quarter from Rs. 176 crore in Q1FY26. The strong profit growth highlights better margins and focus on high-return segments, supported by strategic initiatives and cost optimisation across operations. A return on equity (ROE) of about 20.8 percent and a return on capital employed (ROCE) of about 30 percent, demonstrate the company’s financial position.
About the Company
Force Motors Limited is an integrated Indian automobile company based in Pune, incorporated in 1958 and a subsidiary of Jaya Hind Industries Pvt. Ltd. It designs, manufactures, and sells a wide range of vehicles and automotive components, including passenger vehicles, ambulances, school buses, delivery vans, light and multi-utility commercial vehicles, off-roaders, military vehicles, and tractors. Its key platforms include Urbania (urban mobility vans), Traveller (passenger and cargo transport), Trax (rural utility vehicles), Gurkha (off-road vehicle), and electric vehicles. The company also provides shared mobility, commercial fleet, specialized transport, and defense solutions. Force Motors exports to the Middle East, Asia, Latin America, and Africa.
Future Outlook
Force Motors is investing Rs. 2,000 crore over three years to grow profitably and expand globally. The money will be used to modernise production, improve digitisation, and enhance efficiency, while launching electric vehicles like the Traveller EV ambulance and Urbania EV. The company aims to increase exports to Latin America, Africa, and other markets, targeting 20–30 percent of its sales from abroad. It is also strengthening its defence segment with products like the Gurkha SUV and light strike vehicles. With a focused product portfolio, strong market share in shared mobility, and better cost control, these investments will support long-term growth and higher profits.
Conclusion
Force Motors is seeing strong growth and rising FII confidence with debt-free operations, healthy cash flows, and three-year revenue and profit growth of 36 percent and 100 percent. Recent results show good margins, and investments in EVs, digitisation, and global expansion position the company for steady long-term growth and value creation.
Written by Akshay Sanghavi
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