Summary
Steel Strips Wheels Limited - Q3 FY 2026 Earnings Call Summary Friday, January 23, 2026 4:00 PM IST
Event Participants
Executives 4 Dheeraj Garg (Managing Director), Pranav Jain (DGM, Finance), Rahul Kumar (CFO), Puneet Sharma (DGM, Finance & Accounts)
Analysts 7 Anand Kulkarni, Bhavesh Jain, Hitaindra Pradhan, Madhur Rathi, Nishita Shanklesha, Saurabh Jain, Shashank Kanodia
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue | ₹1,321 crores | +23% YoY; Driven by record monthly sales in Nov/Dec and robust domestic demand across segments. |
| EBITDA | ₹128 crores | +8% YoY; Impacted by decline in high-margin exports to the U.S. despite strong domestic volumes. |
| PAT (9M FY26) | ₹138 crores | Reflects resilience in domestic operations against external export challenges. |
| EBITDA per Wheel | ₹260 | +₹20 QoQ; Improvement driven by favorable product mix (CV/Tractor) and higher utilization. |
| Alloy Wheel Revenue Share | 37% | Reflects increasing premiumization; segment contributed 20% to total volumes. |
| Knuckle Revenue | ~₹54 crores | 9M FY26 performance; Sector expanding adoption from EVs into ICE vehicles. |
| Total Debt | ~₹900 crores | Cost of debt maintained at 8%-8.5%; includes factoring lines adjusted against debtors. |
| Capacity Utilization | ~100% | Management noted near-full utilization in CV, Tractor, and Aluminum segments. |
Geographic & Segment Commentary
- Domestic Market: Witnessed robust demand across all verticals, particularly in CV (up 16% YoY) and Tractors (up 12-13% YoY). The segment benefited significantly from GST 2.0 reforms and a strong festive season, leading to record production in Jamshedpur and Chandigarh.
- Alloy Wheels & Knuckles: Alloy wheels are currently hitting a 5 million unit annualized run rate with a 100% order book for the next two years. Aluminum knuckles are scaling from 5 lakh to 11 lakh units capacity, broadening the customer base to ICE OEMs.
- Exports: U.S. steel wheel exports saw a ₹300-₹400 crore revenue hit due to “Trump tariffs,” though Europe now accounts for 58% of export revenue. Management expects a potential ₹500 crore upside if U.S. trade investigations penalize competitors in Thailand and Vietnam.
Company-Specific & Strategic Commentary
- Bhuj (AMW) Facility Revamp: Investing ₹420 crores to set up 1.2M alloy wheel and 0.6M knuckle capacity at the acquired AMW site. The strategy saved ₹100 crores in infrastructure costs and ₹100 crores by repurposing old equipment for other plants.
- Premiumization & Mix Shift: Deliberately exited low-margin passenger car steel wheel contracts (e.g., Maruti) to prioritize high-margin tractor and truck wheel production. The shift aims to push EBITDA per wheel toward a target of ₹300.
- Digitalization & AI: Management is investing in digitalization and AI initiatives to ensure the company is “future-ready” within the next year, focusing on operational cost optimization.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue | ₹6,000 - ₹6,500 crores (FY27) | Base of ₹6k cr is visible; ₹500 cr upside depends on resolution of U.S. tariff situation. |
| EBITDA per Wheel | ₹270+ (Q4 FY26) | Driven by 100% capacity utilization and higher value-added product mix. |
| Alloy Wheel Capacity | 6.2 Million units (FY27) | Addition of 1.2M units at Bhuj expected to start commercial supply by Dec 2026. |
| Knuckle Capacity | 1.1 Million units (FY27) | Scaling to meet strong demand from European and domestic ICE/EV OEMs. |
Risks & Constraints
| Risk | Context |
|---|---|
| Trade Tariffs | U.S. “Trump tariffs” have already impacted steel wheel exports by ₹400 crores; prolonged uncertainty remains a margin drag. |
| High CAPEX Cost | Setting up aluminum capacity is “atrociously expensive” (₹500-800cr industry standard); SSWL relies on low-cost brownfield strategies to maintain a 7-year payback. |
| Raw Material Volatility | While RM is a pass-through (quarterly/3-month lag), rapid price increases can optically suppress EBITDA margins in percentage terms. |
Q&A Highlights
Segment Profitability
- Question: Why are margins suppressed below 10% despite higher alloy wheel mix? (Saurabh Jain)
- Answer: RM price increases optically lower percentage margins; the focus should be on absolute EBITDA per wheel, which rose from ₹240 to ₹260 and is targeting ₹270. (Dheeraj Garg)
CAPEX & Asset Efficiency
- Question: Is the Bhuj investment giving subpar returns given the high CAPEX? (Shashank Kanodia)
- Answer: Internal calculations show a 7-year payback. We saved ₹200cr by utilizing AMW infrastructure and prevented Chinese competitors from acquiring the asset. (Dheeraj Garg)
Export Recovery
- Question: What is the timeline for U.S. export normalization? (Hitaindra Pradhan)
- Answer: We hope for resolution by March. If competitors in Thailand/Vietnam face anti-dumping duties, India becomes the sole alternative, offering a ₹500cr revenue upside. (Dheeraj Garg)
Key Takeaway
Steel Strips Wheels Limited delivered a resilient Q3 FY26 with 23% revenue growth, reaching ₹1,321 crores, fueled by a domestic “bull run” in tractors and commercial vehicles following GST reforms. While U.S. tariffs caused a ₹300-₹400 crore hit to high-margin steel wheel exports, the company successfully pivoted to 100% utilization of its domestic alloy wheel and tractor capacities. Strategically, the company is repurposing its Bhuj (AMW) acquisition to add 1.2 million alloy wheel units at a lower-than-industry cost, targeting a ₹6,000 crore revenue base for FY27. Management is focused on a premiumization strategy, exiting low-margin contracts to drive EBITDA per wheel toward ₹300. Success remains contingent on the sustained recovery of the domestic CV cycle and the favorable resolution of U.S. trade investigations against Southeast Asian competitors.
Want more insights like this?
Subscribe to get deep dives delivered to your inbox.
More Earnings Summaries
Explore more Q3 FY26 earnings call analyses: