SSWL's Future: Strong Growth, Global Diversification

Ashwin Thakker

— 2 min read

Key Facts on Outlook:

  • Sales: Expected 9-10% overall volume growth; 15% overall top line growth for FY26.
  • Sales: Alloy wheel segment to see mid-high double-digit growth; 11-12% domestic growth, 18-20% export volume growth.
  • Sales: Alloy wheel segment share of overall revenue expected to rise further in coming quarters.
  • Sales: Knuckle segment aims for full launch by FY26, targeting 0.4 million unit utilization by Q4 FY26.
  • Margins: EBITDA per wheel expected to inch upwards, maintaining levels around INR261.7.
  • Margins: Overall margins expected to remain stable for the year; temporary Q1 pressures to normalize.
  • Strategy: Reducing U.S. market dependence, increasing focus on Europe and South America.
  • Capacity: Expanding commercial vehicle capacity by 0.5 million units by September/October 2025.
  • Debt: Long-term debt guided to INR450 crores; total debt INR850-900 crores with 7-7.5% cost.

Steel Strips Wheels Limited (SSWL) delivered a robust 15% year-on-year top-line growth in Q1 FY26, signaling a strong start. Beyond these figures, the earnings call provided crucial insights into the company's forward-looking strategy. SSWL is proactively navigating market dynamics through geographic diversification, sustained growth in key segments like alloy wheels, and strategic capacity expansion, ensuring a resilient future.

Global Expansion and De-Risking Strategy

SSWL is actively de-risking its export business by strategically reducing reliance on the U.S. market. The company successfully lowered its U.S. export share from approximately 70% in FY24 to 52% in FY25. This strategic pivot emphasizes stronger engagement with European and South American markets, which are now key growth drivers. Management noted:

"Europe is definitely very strong, and it is, again, an area which we had made conscious efforts to grow our business in."

This proactive approach aims to mitigate potential tariff impacts and secure long-term global stability, with export volumes anticipated to grow by 18-20%.

Optimistic Growth Across Key Segments

SSWL forecasts continued robust performance across its product lines. The alloy wheel segment is a primary growth engine, expected to achieve "mid-high double-digit growth" overall, including 11-12% domestic growth, contributing significantly to margins. The new aluminum knuckle business is also gaining traction, targeting 0.4 million unit utilization by Q4 FY26 from its initial 0.5 million annual capacity. Despite a slight Q1 margin dip due to raw material and maintenance costs, these are expected to normalize in coming quarters. Management projects a 15% overall top-line growth for the year, anticipating improved EBITDA per wheel as high-margin segments dominate.

SSWL's Q1 FY26 call highlighted a clear path for future growth, anchored by strategic diversification and strong segment performance. The company's proactive shift towards Europe and South America, coupled with the robust demand for alloy wheels and knuckles, positions it for continued expansion. While navigating temporary cost pressures, SSWL's management remains committed to sustaining profitability and achieving its targeted 15% top-line growth, signaling a resilient outlook.

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