One of the small-cap auto ancillary stocks engaged in manufacturing and supplying steel wheel rims and alloy wheels for a wide range of domestic and global automobile makers. The stock has jumped 3.76 percent after receiving an export order worth Euro 15 million in the steel wheel business.
Stock Price Movement:
In Friday’s trading session, Steel Strips Wheels Limited’s share jumped to an intraday high of 3.76 percent from the previous close of Rs. 199.50. The stock opened at Rs. 203.45 and is currently trading at Rs. 204.30 with a high of Rs. 207 and a low of Rs. 196.75. The market capitalization now stands at approximately Rs. 3,206.07 crore.
What Happened:
Steel Strips Wheels Limited has received an export order from a leading European OEM for close to Euro 15 million in the steel wheel business.
The order will be executed over a span of 6 years, with series supplies expected to commence from the end of 2026. This significant export order highlights the company’s strategic focus on expanding its presence in the European Union and global OEM markets.
Capital Expenditure:
For FY25, Steel Strips Wheels Ltd expects its CapEx to be under Rs. 200 crores, down from the initial guidance of Rs. 225 crores. Key focus areas include expanding aluminum production, knuckle production, and solar panel installations.
Margin Guidance:
Steel Strips Wheels Limited anticipates improving margins through pricing corrections with OEMs, expected to reflect in Q4 FY25. The management is focused on gradually increasing margins by enhancing efficiency and optimizing the product mix.
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New Business Developments:
Steel Strips Wheels Limited is set to launch an aluminum knuckle business, with commercialization expected next quarter. The company is targeting the SUV segment, anticipating robust future orders, and expanding capacity from 0.25 million to 0.5 million units.
Recent quarter results and ratios:
Steel Strips Wheels Limited’s revenue has decreased from Rs. 1,134 crore in Q2 FY24 to Rs. 1,095 crore in Q2 FY25, which has down by 3.44 percent. The net profit of Steel Strips
Wheels Limited has also down by 11.54 percent, from Rs. 52 crore in Q2 FY24 to Rs. 46 crore in Q2 FY25. Steel Strips Wheels Limited’s revenue and net profit have grown at a CAGR of 10.63 percent and 81.46 percent, respectively, over the last two years.
In terms of return ratios, the company’s ROCE and ROE should be 17.4 percent and 20.2 percent, respectively. The debt-to-equity ratio of the company is to be 0.61x. Steel Strips Wheels Limited’s EPS is to be Rs. 42.2.
Company Overview:
Steel Strips Wheels Limited was incorporated in 1985 and started operations in 1991. Steel Strips Wheels Limited is a leading Indian manufacturer of automotive wheel rims, specializing in both steel and alloy wheels.
The company is headquartered in Chandigarh and operates multiple facilities across India, including Punjab, Tamil Nadu, Jharkhand, and Gujarat, serving both domestic and global automobile makers.
Written By – Nikhil Naik
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