Steel Strips Wheels: 208% Profit Jump as Alloy Mix Shift

Steel Strips Wheels (SSWL) makes steel wheel rims, alloy wheel rims, and aluminium structural parts for passenger cars, commercial vehicles, and tractors. It is a Tier-1 OEM supplier to over 20 countries, including European heavy commercial vehicle makers Daimler, MAN and Scania. Tata Steel holds a 6.9% stake; Nippon Steel (Japan) 5.4%. What happened: In Q2FY27, revenue grew 60.8% year on year to Rs 1,930 crore as volumes rose 23.5%. EBITDA more than doubled (+109.8%) to Rs 235 crore; EBITDA margin expanded 290 basis points to 12.2%. EBITDA per wheel rose to Rs 404 from Rs 242 in Q2FY26. Net profit grew 208.3% to Rs 119 crore. Export revenue jumped 69% to Rs 187 crore, equal to 9.7% of Q2 revenue. Why it matters: Alloy wheels are driving the profit improvement. Their revenue share rose to 45% from 37% a year earlier as alloy volumes grew 33% to 12 lakh units. SSWL holds over 64% market share among non-Maruti OEMs. Alloy capacity expands from 50 lakh to 66 lakh units by April 2027; a greenfield at Chhatrapati Sambhajinagar adds 25 lakh more. Management targets export revenue of Rs 1,500 crore over three years. What I am watching: SSWL trades at 25.5 times trailing earnings, above its three-year median of 16.5 times but below the industry at 27.8 times. ROE is 12.2% and ROCE 15.9%. Management guides EBITDA per wheel from Rs 310 toward Rs 450 over time; sustaining this as new capacity comes online is the test. My stance: The Q2 results are exceptional and the alloy mix shift is structural. At 25.5 times, the stock trades below the industry, and ROE and ROCE have room to improve as capacity is absorbed. Execution on the greenfield is the key risk. I do not hold a position in Steel Strips Wheels at the time of writing. This is not investment advice.