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HDFC Securities Retail Research
Steel Strips Wheels Ltd. commands a leadership position in the steel wheels segment with an overall market share of ~50-55% while its share in the alloy segment has increased to ~33%.
Demand continues to remain strong and after expanding its steel wheel capacities in FY22 it is looking to expand alloy wheel capacity in FY23. The management is concentrating more on alloy wheels and export segment both of which are higher margin segment and expects these segments to contribute ~50% of revenue in two-three years from 43% in FY22.
Steel Strips Wheels has already announced resolution plan for acquisition of AMW Autocomponent Ltd. under corporate insolvency resolution process that has been approved by the committee of creditors of AMW Autocomponent in September 2021.
Healthy offtake of the enhanced capacities will remain key to the elevation in profitability and return on capital employed, as well as deleveraging.
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