Steel Strips Wheels Limited — Investor Meet, 23-01-2025: Analysts/Institutional Investor Meet/Con. Call Updates

**Financial Performance:** Steel Strips Wheels Limited reported revenues of ₹3,195 crores for the nine-month period of FY25, slightly down from ₹3,288 crores during the same period last year. EBITDA for this period totaled ₹352 crores, a marginal decrease from ₹354 crores in the previous year. The EBITDA margin improved to 11% from 10.5%, attributed to effective cost optimization strategies. Profit after tax reached ₹148 crores, compared to ₹159 crores last year, largely due to the prior year's beneficial effects from the new tax regime. Depreciation costs increased and are expected to peak at around ₹100 crores for FY25.

**Future Outlook and Growth Drivers:** Management anticipates continued growth in the Tractor segment and expects export revenues for FY25 to reach approximately ₹550 to ₹600 crores, buoyed by expected demand recovery. The company has newly launched its aluminum knuckle business, aiming for a substantial market share as the automotive sector shifts towards lighter materials.

**Order Book and Operational Updates:** The order book is reportedly robust at about ₹175-180 crores, with management expressing confidence in achieving target sales despite previous delays impacted by geopolitical tensions and supply chain disruptions.

**Analyst Q&A Insights:** Analysts probed revenue forecasts and operational challenges, particularly concerning export strategies. Management indicated that the U.S. market is likely to strengthen due to shifting tariffs, asserting a competitive edge over Chinese manufacturers. Questions on capital expenditure revealed plans for targeted investments in alloy wheel expansion and new capacities.

**Market or Regulatory Updates:** Emerging regulations in the automotive sector favoring lighter materials position the company well, particularly with its new aluminum knuckle offering, strategically aligning with market demands for efficiency and sustainability.

**Strategic Focus Areas:** Key strategies focus on expanding market presence in the alloy wheel segment, enhancing product diversification into aluminum knuckles, and leveraging export opportunities amidst changing geopolitical landscapes.

**Investor Insight:** Given the solid financial metrics and promising outlook, Steel Strips Wheels Limited appears to exhibit favorable growth potential. The company's initiatives to enhance production capabilities and expand into new segments suggest a supportive investment environment, meriting a 'buy' stance. Future risks predominantly stem from global market uncertainties affecting export dynamics.