Steel Strips Wheels Limited — PPTs, 16-05-2025: Investor Presentation

1. Financial Highlights:

Steel Strips Wheels Ltd reported revenues of Rs. 4,429 Cr for FY25, up 1.7% YoY. EBITDA increased 4.6% to Rs. 487 Cr with margins steady at 11.0%. PAT declined 4.5% to Rs. 210 Cr, with margin contracting slightly to 4.7%. Q4 performance was strong, with revenue up 15.5% and EBITDA up 21.1% YoY. Steel wheels contributed ~68% of revenue (Rs. 2,992 Cr) and alloy wheels ~32% (Rs. 1,436 Cr). Gross margin improved modestly to 35.5%. Net debt fell by Rs. 193 Cr to Rs. 824 Cr. ROCE and ROE stood healthy at 14.1% and 20%, respectively. Capacity utilization remained robust at ~77% for steel wheels and ~80% for alloy wheels.

2. Strategic Initiatives & Growth Drivers:

Expansion of alloy wheel capacity at Mehsana to 5.3 million units by FY26 is underway along with scaling aluminum knuckles capacity to 10 lakh units. The company is focused on shifting its sales mix toward higher-margin alloy wheels and boosting exports, which have already crossed 2 lakh units in volume. Adoption of robotic automation and efforts to rationalize operating costs aim to improve margins. Industry growth is expected around 4% CAGR for steel wheels and 12% for alloy wheels over five years.

3. Business Developments:

Completed acquisition of AMW Auto Components (7 million steel wheel capacity) in Bhuj, adding scale and backward integration. Commercial production of aluminum knuckles has started, enhancing product diversification with two leading OEM clients onboard.

4. Market Position & Competitive Advantage:

Steel Strips Wheels remains a market leader in steel and alloy automotive wheels, benefiting from strategic stakes held by Tata Steel (6.9%) and Nippon Steel & Sumitomo Metal (5.4%) that provide technological edge and supply chain support. The company’s extensive backward integration, multiple advanced plants, and diversified clientele across PV, CV, tractors, and 2-3 wheelers segments strengthen its competitive moat domestically and internationally.

5. Investor Implications:

Ongoing capacity additions, improved sales mix favoring high-margin alloys and exports, along with net debt reduction, indicate positive growth potential. Key execution risks relate to timely ramp-up of new capacities and assimilation of acquired assets. Consistent dividends and improving returns on capital highlight stable shareholder value creation prospects.