Steel Strips Wheels - Focusing On Product Diversification, Export Market: Axis Securities

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Axis Securities Report.With a focus on fulfilling export demand from the U.S. and Europe, ramping up of alloy wheels, and aluminium knucklers division; and further diversification into the motor plus controller electric vehicle business (joint venture with Reddler Technologies) in the future, we value Steel Strip Wheels Ltd. at 17 times price earning multiple on our September 25, earning per share (rollover from March 23) [We switch from enterprise value/Ebitda of 5.5 times on strengthening balance sheet and lower net debt levels]. We maintain our 'Buy' rating on the stock with a revised target price of Rs 325/share (from Rs 240/share earlier), implying an upside potential of 22% from the current market price..About the company Steel Strips Wheels is a leader in designing and manufacturing automotive wheels – both under the steel and alloy categories. The company is based out of Chandigarh with manufacturing facilities at Dappar (Punjab), Oragadam (Chennai), Jamshedpur(Jharkhand), Mehsana (Gujarat) and Saraikela (Jharkhand). These plants have a combined manufacturing capacity of about ~23 million wheels per annum. With the acquisition of AMW Auto component (pending regulatory approvals) Steel Strip Wheel is expected to add ~ 7 million steel wheel capacities in the future.In FY23, steel wheels contributed ~69% (97% in FY19) and alloy wheels contributed 31% (3% in FY19) to total revenue of Rs 4,041 crore (~Rs 2,041 crore in FY19). It produced a total of ~1.76 crore wheel rims in FY23..Click on the attachment to read the full report:.Auto Ancillaries Check - Options Galore; Which Ones To Choose From The Lot: ICICI Securities.DISCLAIMERThis report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Steel Strips Wheels - Focusing On Product Diversification, Export Market: Axis Securities

The company is focused on a shift of sales mix towards the high-margin export wheel segment.

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