Shares of Steel Strips Wheels (SSWL), a prominent player in the automotive wheel manufacturing industry, witnessed a notable increase of 6% in intraday trading on April 1. The stock reached a price of ₹188.36, buoyed by investor optimism following the company’s recent business update for March. This surge effectively put an end to a four-day decline, turning the tide for the stock.
Impressive Financial Performance
SSWL’s March report showcased remarkable growth compared to the previous year. The company achieved a record net turnover of ₹433.70 crore, reflecting a 27.29% increase from ₹340.72 crore in March 2024. This strong performance is a testament to the company’s resilience and market demand.
- Gross turnover in March climbed to ₹529.15 crore, up from ₹415.05 crore the previous year, marking a 27.49% year-on-year growth.
- The Alloy segment, which includes exports, experienced a staggering 50% volume growth.
- The Truck and Tractor segments also demonstrated significant year-on-year increases of 32% and 23%, respectively.
Strategic Partnerships and Market Impact
Steel Strips Wheels supplies a variety of passenger vehicle (PV) and commercial vehicle (CV) manufacturers, including industry giants like Maruti Suzuki, Mahindra & Mahindra, Hyundai, and Tata Motors. This vast network of original equipment manufacturers (OEMs) positions SSWL favorably within the automotive sector.
In light of recent developments, the company reassured investors regarding the potential impact of the U.S. government’s 25% tariff on automobile imports. According to SSWL, their products, specifically steel and alloy wheel rims, remain unaffected by the tariff, which primarily targets other vehicle parts.
Expansion Goals and Long-Term Growth
Tata Steel holds a 6.9% stake in SSWL, indicating strong institutional interest. The company is also set to expand its production capacity significantly, aiming to increase its alloy wheel output from 12 lakh wheels to 48 lakh wheels at its facility in Mehsana, Gujarat, by FY26.
Stock Performance Insights
Despite facing a 37% decline from its peak value, SSWL’s stock has still shown impressive growth over the past five years, surging by 425%. Since reaching a low of ₹12 in March 2020, the stock has skyrocketed by an astonishing 1,450%. Between April 2020 and August 2021, it experienced a remarkable rally, climbing from ₹35.45 to ₹190, delivering a staggering 450% return.
In summary, Steel Strips Wheels continues to demonstrate robust growth and resilience in the competitive automotive market. With solid financial results, strategic partnerships, and ambitious expansion plans, SSWL remains a compelling stock to watch for investors seeking opportunities in the small-cap sector.
