Steel Strips Wheels Limited - Attractive Valuations

Q&A: Questions & Answers
81

Below are the total numbers of SSWL for Q1FY19 (Apr,May,June-18). I have consolidated the monthly numbers for Q1F19 and I feel Q1FY19 SSWL might have good results as there is visible increase in Volumes & Net revenues and also there is increase in Commercial Wheels, which has good margins compared to others wheels (other than alloy wheels)

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Note: All the numbers should be available from BSE/NSE websites.

Disc: holding

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Co gave a estimated figures of 40.50 Lacs Quarterly volume sales for Q1FY18-19, by taking monthly sales it looks SSWL made sales close to estimated figure (actual 39.16 Lacs)

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from recent commentary from SSWL Q2FY18-19 Co gave estimated volumes of 42.75 Lakhs.

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But there is no details regarding alloy wheels expect utilization capacity with alloy plant, and there is no sales breakup available. Any way to get details about Alloy wheels sales segment ?

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SSWL geis 18,000 Wheels order from European aftermarket.

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But the management didn’t mention the total value of the order, they did mention the value of other orders in the previous filings to the exchanges.

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According to me there are many red flags in this company -

  1. Management keeps on shouting for “Highest” order/revenue.

  2. It is a very capex heavy business and due to this it is on perpetual expansion mode

  3. in its last ten years there is not even single year when company is able to produce positive free cash flow.

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  4. Debt level is on continuous rise since last ten years

  5. Company’s cash balance keeps on rising but they are not utilizing it for debt repayment

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86

Good Points. Lets see if it is able to up its revenue and thus profitability, then all these negatives could turn to be positives, else as you say it would seem a like a pattern with management.

disc: invested.

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Q1 FY2019 Results:

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Steel Strips Q1FY19 Results:

Financials Q1 FY18-19 Q1 FY17-18 % Change
Total Income ₹ 502.25 crs ₹ 311.74 crs :arrow_up: 60.61%
Net Profit ₹ 21.51 crs ₹ 16.40 crs :arrow_up: 31.16%
EPS ₹ 13.54 ₹ 10.53 :arrow_up: 28.58%
OPM 12.74% 14.89% :arrow_down: 215 bps
NPM 4.29% 5.26% :arrow_down: 97 bps
  • The operating margins reduced due increase expenses in employee benefit expenses and finance costs, other expense and also there is continuous increase in material cost.
89

SSWL has bagged Exports order from US Truck & Trailer Aftermarket for its Truck Steel wheels. Order comprises of 76,000 Truck Wheels to be shipped in next 12 months. Total order value is over USD 3.5 Mln.

1 Like
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SSWL achieved total wheel rim sales of 14.14 Lacs Vs 12.39 Lacs in Aug-18 representing a growth of 14% YoY.
ln terms of Value, the company has achieved gross turnover of Rs 217 .77 Crs in August 2018 Vs 153.56 Crs in.August 2017, there by recording a growth of 42% and achieved Net turnover of Rs.166.41 Crs in August 2018 Vs Rs.124.10 Crs in August 2017, recording a growth of 34%

1 Like
91

Fewer cars, more trucks sold in August-SIAM

Car sales declined while truck and bus sales rose over 29% in August, data compiled by Society of Indian Automobile Manufacturers (SIAM) showed.

2018 August Key sales highlights (YoY)

  • August car sales fell 1.03% to 1,96,847 units Vs 1,98,892 units y-o-y
  • Local passenger vehicle sales down 2.46% to 2,87,186 units Vs 2,49,416 units y-o-y
  • Two-wheeler sales grew 2.91% to 19,46,811 Vs 18,91,685 units y-o-y
  • Truck and bus sales increased 29.56% to 84,668 units Vs 65,350 units y-o-y

Details

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Any idea if the debt is in $ or INR ?

93

SSWL has been correcting lately. Good price to add?
CV expansion and alloy wheels look to be good revenue and margin triggers.
Came across this interesting article on some website. Have given target of 1520.

Disc: Invested

1 Like
94

SSWL ACHIEVES HIGHEST EVER MONTHLY VOLUME & REVENUE IN SEPTEMBER 2018, REVENUE UP 55% Yoy BOUYED BY TRACTOR & TRUCK SEGMENT

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95

SSWL is glad to inform that it has bagged new Exports orders for Caravan wheels & Truck wheels for US and EU Trailer markets. Order comprises of about 100,000 Wheels to be shipped from October until December 2018 with a total value close to USD 3 Mln.
Orders are expected to be repeated in months to come. SSWL has been successful to enter the competitive US Truck/Trailer wheels market and focus is now to establish a strong presence and be a dominant player in coming months. SSWL remains a strong & leading player in the challenging EU Caravan wheels market.
SSWL is operating its truck wheel facility in Chennai at 120 percent utilization and additional capacity of 1 million wheels is expected to be on stream in phases staring in November 2018 to March 2019.

96

SSWL is glad to inform that it has bagged a new Exports order from OPEL Spain (Group PSA Company) for Steel wheels. Order comprises of more than 650,000 Wheels to be shipped in period of 6 years starting Oct 2019. Total order value is over Euro 6 Mln.

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Hi guys,

Would like to know whether these constant updates on the new orders received have a significant impact on their sales and margins. Are they able to complete their orders quickly on a regular basis or does it simply just add up to their order book

Thanks

Abhijit

100

SSWL is pleased to announce that, SSWL achieved total wheel rim sales of 14.50 Lacs Vs 13.04 Lacs in October 2018 representing a growth of 11% YoY.
In terms of Value, the company has achieved gross turnover of Rs 249.36 Crs in October 2018 Vs 166.85 Crs in October 2017, there by recording a growth of 50% and achieved Net turnover of Rs.204.04 Crs in October 2018 Vs Rs.134.96 Crs in October 2017, recording a growth of 51%.
SSWL ACHIEVED HIGHEST EVER TRUCK WHEEL SALES
SSWL ACHIEVED HIGHEST TRACTOR WHEEL SALES
SSWL ACHIEVED HIGHEST TRUCK WHEEL EXPORTS SALES