Buy Steel Strip Wheels Ltd For Target Rs. 265 By Axis Securities Ltd
* Growth in Export Demand: In Q4FY25, SSWL's export revenue stood at Rs 157 Cr, registering a 22% YoY growth. The company sold 2.35 Lc alloy wheels in FY25, generating revenue of Rs 102.68 Cr. The total export revenue for FY25 stood at Rs 561 Cr, with a target to reach Rs 1,000 Cr by FY27E. The USA accounted for 64% of the total exports, followed by the EU at 32%. Going forward, the company anticipates that India will benefit from a competitive advantage driven by a favourable US tariff structure compared to China, Vietnam, and Thailand.
* Alloy Wheel Capacity Expansion: The company plans to expand its annual capacity to 5.3 Mn units by FY26 from 4.8 Mn in FY25, with an anticipated capacity utilisation of 75–80%, supported by expected orders from Maruti and a gradual recovery in the European and US markets. In FY25, the company sold 33.28 Lc alloy wheels, contributing 32% to the overall sales mix.
* Higher EBITDA Margins Moving Ahead: The aggregate EBITDA/wheel for Q4FY25 stood at Rs 270/wheel and Rs 261/wheel for FY25, compared to Rs 253/wheel in FY24. Future growth is expected to be driven by a revival in CV and tractor wheel volumes, an increasing focus on a richer mix of higher-margin alloy products such as knuckles and alloy wheels, and higher exports.
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