Wheels IndiaQ2 FY24
Wheels India Q2 FY24 Earnings Call Analysis
Revenue, margin, capex, fundraise and order book outlook from management commentary.
Price: ₹2,230P/E: 33.3Market Cap: ₹5.4K CrSector: Auto Components
Management growth scorecard
Revenue
Category 4
Margin
Category 2
Fundraise
No
Order
N/A
Capex
Yes
1 of 4 growth signals are positive — mixed outlook.
Full analysisRevenue guidance
Category 4- Export growth: Expected to be muted next year with softness in Europe and Latin America; growth will rely on winning new business in light and medium construction wheels as well as larger tractor wheels mainly in Europe and North America.
- Domestic Market: Commercial vehicle market anticipated to improve post-monsoon; air suspension demand expected to be strong in Q3 and Q4; tractor market remains weak with no dramatic improvement expected soon.
- Alloy Wheels: Aluminium wheel business is EBITDA positive and directionally improving; OEM supplies expected to increase from Q4 and next year with new customer orders anticipated.
- Volume Targets: Export wheels production expected to grow from current ~24,000/month to 35,000–40,000/month by next year; total monthly wheels (commercial + passenger vehicle segments) around 8.5 to 9 lakh including subsidiary.
- New Business Areas: Growth expected in fabrication and hydraulic cylinder export businesses targeting North America and Europe starting next financial year.
See what Wheels India management said on margin guidance — free account, 30 seconds.
Fundraise plans
No- Currently, Wheels India Limited has no plans to raise equity as there are no expansionary activities necessitating it.
- The company has been managing its capex through internal accruals without additional borrowing.
- There is ongoing effort to reduce working capital and thereby decrease debt facilities over the next 18 to 24 months.
- Debt reduction is planned through repayment of term loans and working capital limits—a reduction of about Rs.150 Crores in debt has already been achieved in the current six months, with further repayments expected.
- Interest cost increases are mainly due to repo rate hikes rather than higher borrowings.
- Improvements in profitability and cash flow are expected to enable the company to avoid new borrowing for capex going forward.
See what Wheels India management said on order book — free account, 30 seconds.
Capex plans
Yes- The Board has cleared a capex proposal of over Rs. 200 Crores for the current year.
- So far, only Rs. 72 Crores have been spent in six months; expected full-year capex is about Rs. 150-160 Crores due to deferments.
- All capex is Brownfield, focused on adding to existing capacities; no Greenfield projects.
- Capex is aligned with cash flows and financial health of respective businesses; cautious spending due to muted volume growth.
- No major capex planned for increasing volume in alloy wheels this year; any such investment likely next year due to long lead times.
- In windmill business, no new capacity in fabrication; casting and machining segment is scaling up and profitable, expected to grow twofold in the coming year.
- The company plans better utilization of existing capacity next year, indicating less need for large capex.
- Capex will primarily be funded through internal accruals without additional borrowing.
Track Wheels India — get its next earnings analysis in your feed
Margin guidance
Category 2- Wheels India expects to improve EBITDA margins to around 7%+ by Q4 FY2024, reaching levels similar to 2018-2019.
- The company anticipates margin normalization post-Q4, after absorbing one-time costs and improving operational efficiencies.
- Growth in exports is expected to be challenging next year, with muted market expansion in Europe, Latin America, US, and Asia, but new business wins in light and medium construction wheels and larger tractor wheels offer potential.
- Internal accruals and working capital improvement are expected to fund capex, with no current plans for equity infusion, aiding interest cost reduction over 18-24 months.
- Sundaram Hydraulics' full amalgamation is expected to contribute Rs.130-140 Crores topline with 25-35% growth, aiding overall earnings.
- The company targets better profitability driven by margin recovery, operational rationalization, and growth in new export markets like North America and Europe.
Order book
The transcript from the Wheels India Limited Q2 FY2024 earnings call does not explicitly provide detailed information about the current or expected order book or pending orders in quantified terms. However, relevant insights include:
- The company has Letters of Intent (LOIs) from two customers for the alloy wheel business; supply to one has started, with the other expected early next year.
- New business wins are anticipated in light and medium construction wheels and larger tractor wheels in export markets starting Q4 FY2024.
- Rationalization of manpower has been completed, enabling the company to look at manufacturing fabrications for high-speed trains like Vande Bharat, expected to progress by Q4.
- Export demand is strong in North America and Asia; Europe remains soft.
- The company expects growth in the fabrication and hydraulic cylinder export businesses next financial year.
No specific order book values or pending order figures are disclosed.
How does Wheels India rank vs peers in Auto Components?
Pro featureThisWheels India
Rev 4Mar 2
How does Wheels India rank in Auto Components?
Compare Wheels India against every Auto Components company (Q2 FY24) on revenue, margins and earnings-call signals.
Continue your research
What Wheels India's management said in earlier quarters
Others in Auto Components this season
- SPR Auto Technologies Ltd (Q1 FY27)
Emerging segments such as EV motors, drone motors, and electric marine motors through the EMFi subsidiary show scalable growth potential, with peak sales…
- Triton Valves (Q1 FY27)
Capacity expansion underway to support demand, with 50-60% of a ₹15 crore capex commercialized in FY 27. Key concall takeaways from Triton Valves Ltd's Q1 FY27…
- Rane (Madras) (Q1 FY27)
The provided document (page 1 of 1) is a letter from Rane (Madras) Limited concerning the transcript of an earnings conference call held on August 21, 2026…
- Precision Camshafts Ltd (Q1 FY27)
The cumulative order book size for Precision Camshafts Limited is approximately INR 1,500 crores. Key concall takeaways from Precision Camshafts Ltd's Q1 FY27…