Steel Strips Wheels Q2 FY27: Revenue Surges 61% to ₹1,930 Cr, PAT Jumps 209%

Steel Strips Wheels Limited (SSWL) announced its Q2 FY27 financial results, marking the strongest quarter in the company's history with the highest ever quarterly revenue, EBITDA, and PAT.

Revenue for the quarter grew by an impressive 61% year-on-year to ₹1,930 crore. Standalone EBITDA, including other income, surged by 107% year-on-year to ₹237 crore, with EBITDA margins improving to 12.3% from 9.6% in the corresponding quarter last year. EBITDA per wheel also saw a significant increase, rising to ₹404 from ₹242. This improvement was attributed to a richer product mix with a higher proportion of aluminum wheels, continuous cost optimization across all manufacturing facilities, and increased contribution from exports. Additionally, price revisions from customers for input cost increases (excluding raw materials) further supported the company's margins. Profit after tax (PAT) grew by a substantial 209% year-on-year to ₹119 crore, with PAT margins improving to 6.2% from 3.2%.

For the first half of FY27 (H1 FY27), revenue stood at ₹3,440 crore, a 44% increase compared to ₹2,387 crore in the previous year's same half. Standalone EBITDA for H1 FY27 was ₹403 crore, up 68% year-on-year, with EBITDA margins expanding to 11.7% from 10.1%. EBITDA per wheel for the first half was ₹362. PAT for the half-year increased by 115% year-on-year to ₹190 crore.

The alloy wheel segment continued to be a key growth driver, contributing approximately 45% of the total revenue for the quarter and 42% for the first half. Volumes reached around 12 lakh units in Q2 and 23 lakh units for H1. The company expects this upward volume trajectory to continue, driven by premiumization in passenger vehicles, the rising share of EVs in India, and higher aluminum prices.

SSWL's aluminum knuckle business is progressing as expected, with a focus on securing more customer approvals and scaling up commercial supplies. The Commercial Vehicles segment delivered strong growth, supported by sustained OEM offtake, replacement demand, and infrastructure-led activity. The Tractor segment performed steadily, with the company improving its market share from 43% to 45%.

In the Steel Wheel segment, there was increased demand for high vent hole wheels, which offer a cost-effective alternative to aluminum wheels. Exports showed robust growth, with export revenue in Q2 reaching ₹187 crore (up 69% year-on-year) and H1 export revenue at ₹314 crore (up 16% year-on-year). The company is on track to exceed its FY27 export target of ₹600 crore.

Expansion projects in Bhuj are progressing as planned. The aluminum wheel plant will add 1.2 million wheels of annual capacity, and the aluminum knuckle facility will have an annual capacity of 1.1 million units, with commercial production expected to commence in the last quarter of FY27 for knuckles and early April next year for aluminum wheels.

Capex plans for the current financial year include an expenditure of over ₹600 crore, with ₹420 crore allocated to the Bhuj facility, ₹120 crore for increasing tractor wheel capacity, and approximately ₹70 crore for machinery replacement and automation.

The Board has also approved, subject to regulatory clearances, the establishment of a greenfield manufacturing facility at Sambhajinagar, Aurangabad, with an estimated project outlay of ₹1,400 crore spread over 60 months. This facility will manufacture alloy wheels and steel wheels for passenger vehicles and OTR applications, and will include a hot stamping line for body structural parts. Funding will be a mix of debt, internal accruals, and potential strategic investments.

The company remains confident about the rest of FY27, having exceeded its initial guidance for top-line growth and EBITDA per wheel. Priorities include operational excellence, expanding the premium and aluminum portfolio, growing exports, deepening customer relationships, and investing in automation and AI.

During the earnings call, management clarified that the supplementary invoicing of ₹183 crore for H1 FY27 related to raw material price changes, which is a pass-through and does not impact EBITDA. The company expects the EBITDA per wheel of around ₹404 to be sustainable, driven by operational efficiencies and higher volume growth. The new facilities in Sambhajinagar are expected to be highly profitable, with an anticipated return on capital employed higher than the current 24%. The company also aims to achieve an export target of at least ₹1,500 crore to ₹2,000 crore in 3 years.

Management also provided insights into the hot stamping business, with a new facility planned to commence production in the fourth quarter of the next calendar year, targeting a turnover of ₹400 crore on an investment of ₹170 crore. The facility will cater to the growing demand for lightweighting in vehicles and will be located close to key customers in Maharashtra. The company expects EBITDA per wheel to improve further in FY28, potentially reaching ₹450-₹500, driven by operational efficiencies and a richer product mix.