Steel Strips Wheels Ltd Q1 FY27 Earnings Analysis

- Expecting utilization of 95% across all assets, first time in company history (Q4 FY26 onwards). - Next financial year revenue projected close to INR 6,500 crores versus INR 5,143 crores in FY26. - Addition of INR 700-800 crores revenue from new Bhuj facility at full utilization expected from FY27. - Aluminum wheel capacity to reach about 6.2 million; aluminum knuckles capacity to cross 1.1 million units by year-end. - Tractor segment sales grew ~19% and expected to continue strong growth. - Steel wheel capacity in tractor segment to increase by 15-20% with new paint shops adding capacity. - Export revenue expected around INR 600 crores in current year, stronger due to diversified markets. - EV scooter wheels business growing rapidly, with ~80% market share. - Overall 15-20% PAT growth projected for FY27 driven by volume increases and cost recoveries.

- Projected PAT growth for FY26 is about 15-20%, driven by strong domestic and export demand. - EBITDA per wheel is expected to increase from INR 282 in Q4 to close to INR 300 for FY26, roughly a 10% improvement. - EBITDA for FY26 is estimated around INR 650 crores, with potential upside towards INR 700-750 crores in FY27. - Expansion projects, including Bhuj facility adding INR 700-800 crores revenue at full utilization, will boost top-line and profitability in FY27 and beyond. - Efficiency gains from near 95-100% asset utilization and automation will improve margins and reduce labor cost impact. - Steel wheel business is expected to turnaround, improving margins due to better pricing negotiation. - Export growth is strong, targeted INR 600 crores for FY26, supported by improved market access and diversification. - Overall, sustained volume growth, premium product mix, and operational leverage are key drivers of future earnings growth.

- INR 500 crore Capex for expansion at Bhuj facility, covering two projects: - Aluminum wheels capacity close to 1.2 million wheels. - Aluminum knuckles capacity about 1.1 million wheels (also planned in two phases, with an additional 0.5 million next year). - Trial productions for these Bhuj projects expected to start around October, with approvals by January next year. - Brownfield expansions increasing tractor steel wheel capacity by 15-20%, addition of two paint shops, and a new rim line expected between October and December. - Overall capacity expected to reach about 6.2 million aluminum wheels by the end of this financial year. - Possible further capacity additions in steel wheels, especially in the car line, under discussion. - Expansion plans delayed by 4-5 months but strong confidence on achieving 80-100% utilization by FY28. - Projected debt increase of around INR 200 crore linked to Capex expansions.

- Steel Strips Wheel Limited projects an increase in debt by approximately INR 200 crore for FY27 due to ongoing Capex and brownfield expansions (~INR 550 crore total Capex). - Current debt stands around INR 800 crore and is expected to rise to INR 1,000 crore plus next year. - Debt projections will be reviewed at the end of September and are subject to margins evolution. - No mention of any new equity fundraising in the disclosed transcripts. - The company focuses on funding expansion through debt while monitoring business performance.

- The company is almost sold out for the current year in the aluminum segment, indicating a strong existing order book. - New businesses have been won in the knuckles segment, with expectations to further expand this capacity, suggesting healthy pending orders. - The Bhuj facility expansion is expected to add INR 700-800 crore in top-line revenue at full utilization, with projections of about 70% utilization by FY28, reflecting robust future orders. - Export orders have increased with a diversified portfolio including US, European, Latin American, and Asian markets, targeting INR 600 crore in exports for the current year. - Steel wheel segment is set for a turnaround with increased pricing power and expected 95% utilization of existing assets, implying strong order inflow. - Demand is strong across segments—passenger cars (54%), commercial vehicles (28%), tractors (13%), EV scooters (about 80% market share), and knuckles for EVs. - Overall, the company anticipates close to 100% utilization of assets, implying a very healthy order book and backlog.