Steel Strips Wheels Limited - Attractive Valuations

SSWL makes repayment of 61.27cr debt.
Long term debt reduced to 441.72cr.

Expects further repayment of 170cr debt in FY23.

Dividend policy to be announced in Q4.

For more details watch -

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A detailed report on SSWL.

Regards,
Raj
Disc: Invested

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Steel Strips Wheels Limited (SSWL) has been selected under Production Linked lncentive Scheme for Automobile and Auto Component Sector.

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SSWL achieved Net turnover of Rs. 365.73 Crs in March 2022 Vs Rs. 253.29 Crs in March 2021, recording a growth of 43.92 % YOY and achieved Gross turnover of Rs. 446.65 Crs in March 2022 Vs Rs. 307.38 Crs in March 2021, there by recording a growth of 45.20 % YOY.

Very good sales considering Russia-Ukraine issue and supply chain issues.

They have also repaid Rs. 122.89 Cr debt bringing down the Long term borrowing to 374.85 Cr.

Management has so far walked the talk on all aspects -

  1. Reduced pledge.
  2. Debt reduction.
  3. Holding Investor meets and uploading presentations.
  4. Dividends (policy pending in Q4)

Key thing to monitor now is margins.

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April 2022 Sales at 329 Crs (2nd Highest Monthly Sales)

Some slowdown MoM but still a very good run rate if maintained

Key thing to note is exports are down 31% YoY.

CV upcycle helping SSWL as realization on CV wheels is 2.6x Average realization.

Awaiting results on 13th May.

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Promoter released pledge on about 1 Lakh shares as on today

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SSWL came out with Q4 numbers. Met the estimate of 3,500 Cr. top line

Solid 400 Cr. odd cashflow for FY22 for a company with 2,400 Cr market cap. With CV cycle looking upward trajectory going forward, and alloy wheel penetration increasing - Company seems to have a good platform to take advantage of these tail winds. Capacity addition acquisition via NCLT at a reasonable price would help. Valuations are undemanding.

@vikas_sinha - How do you read the numbers and your anticipation on business performance please

Disc-Invested.

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Nice summary! Thanks!

Yes, seems to be on track. Even with commodity prices shooting and logistics pressures, managed one of the best quarters in FY22. Somehow the management quality is not very inspiring, bit too boastful and then there is the unusual tax bill of the past 3 quarters. Though disclosures are very regular, even if bit pompous. Best quarters seem lined up next with valuations quite reasonable. Hopefully they plan a quick capex soon, which would kick up valuations.

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