Steel Strips Wheels Ltd (SSWL) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator (361 Capital Market Private Limited): Ladies and gentlemen, good day and welcome to Steel Strips Wheels Limited Q2 FY27 earnings conference call, hosted by 361 Capital Market Private Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Dinesh Kumar from 361 Capital Market Private Limited. Thank you, and over to you, Mr. Kumar.
Dinesh Kumar (361 Capital Market Private Limited): Good morning everyone. On behalf of 361 Capital Market, I would like to welcome you all to 2Q FY27 earnings call of Steel Strips Wheels Limited. Today, we have with us today Mr. Dheeraj Garg - Managing Director; Mr. Rahul Kumar - Chief Financial Officer; Mr. Aditya Dixit - Executive Director, International Marketing and Operations; and Mr. Pranav Jain - Vice President, Finance. We will start the call with brief opening remarks from the management team about the quarter gone by, and then we will proceed to the Q&A session. I will now hand the call over to the management team. Over to you, sir.
Dheeraj Garg (Steel Strips Wheels Ltd): Okay. Good morning, everyone. I hope you're all doing well and have had the opportunity to go through our financial results and the investor presentation which has been already uploaded on the stock exchanges and our company's website. I'm pleased to share that the second quarter of financial year '27 was the strongest quarter in the country's history or in the company's history with the highest-ever quarterly revenue, EBITDA and PAT. This reflects our continued focus on strengthening our market position and creating sustainable, long-term value for all our stakeholders. Before I walk you through our performance, I would like to highlight that the Board has approved an interim dividend of ₹1.50 per equity share. Now coming to our quarterly performance: Revenue grew 61% YoY to ₹1,930 crores. Standalone EBITDA, including other income, stood at ₹237 crores, up 107% YoY.
Dheeraj Garg (Steel Strips Wheels Ltd): margin improved to 12.3% from 9.6% in quarter two of last financial year and EBITDA per wheel rose to 404 from 242 last financial year quarter, similar same quarter last year. This improvement was driven by a richer product mix with a higher share of aluminum wheels, continued cost optimization across all our factories and a higher contribution from exports. In addition, as mentioned on the last call, we have received price revisions from customers for increase towards input costs other than raw material which has further supported our margins. Profit after tax grew 209% y-o-y to 119 crores with PAT margin improving to 6.2% from 3.2%. Turning to our half yearly performance, revenue for H1 stood at 3,440 crores compared with 2,387 crores in last year's same same half, a growth of about 44%. Standalone EBITDA including other income stood at 403 crores, up 68% y-o-y and EBITDA margin expanded to 11.7% from 10.1%. EBITDA per wheel for H1 '27 stood at 362 crores. Sorry, EBITDA per wheel for the first half stood at 362 rupees per wheel. That was in the four full six months of this financial year. Profit after tax for the half year was 190 crores, up 115% y-o-y. Now let me take you through our segment performance. The alloy wheel segment remained our key growth driver, contributing to about 45% of our total revenue for the quarter and about 42% for the first half year. Volumes reached approximately 12 lakh units in Q2 and 23 lakh units for the whole of the first half. Volume growth was driven by premiumization in passenger vehicles and the rising share of EVs in India, while higher aluminum prices also supported revenue. Given increasing alloy wheel penetration and strong OEM demand, we expect this upward volume trajectory to continue. Our aluminum knuckle business is progressing in line with our expectations. We remain focused on securing more customer approvals and scaling up commercial supplies. We believe this business will become an important growth engine over the medium term, as lightweight aluminum components gain wider adoption across both ICE and electric vehicles. The commercial vehicle segment delivered another very strong quarter and recorded the highest growth amongst all our segments across domestic and export markets. Truck wheel demand was supported by sustained OEM offtake, replacement demand and infrastructure-led activity. This marks a clear recovery from the weakness we saw in the second quarter of last financial year. The The tractor segment performed steadily during the quarter and our market share improved from 43% to 45%. Demand was supported by increasing farm mechanization, healthy rural economic activity and a growing preference for higher horsepower tractors. We will continue to leverage our established customer relationships and manufacturing capabilities to meet the evolving requirements of tractor manufacturers. In the steel wheel segment for we saw that there was an increased demand for high-vent hole wheels. These are wheels that are similar to similar looking to aluminum wheels, but are made out of steel, so the cost is much less than this aluminum wheel. And we are pursuing this opportunity wholeheartedly and gaining market share in this segment. Coming to exports, after a soft first quarter, export revenue grew 69% y-o-y in Q2 to reach 187 crores, taking H1 export revenue to 314 crores, a growth of 16% y-o-y. This reflects the the diversification we have undertaken over the last two years across Europe, Latin America and Asia, alongside our established presence in the United States. As discussed on a previous earnings call, we remain on track to exceed our FY '27 export target of 600 crores. We remain focused on improving export volumes, strengthening our customer mix and ensuring that our international business contributes meaningfully to both revenue growth and profitability. Coming to our expansion in Bhuj, the both the projects are progressing as planned. The aluminum wheel plant will add 1.2 million wheels of annual capacity, taking our total aluminum wheel capacity beyond 6.2 million. With our existing alloy wheel capacity running at near full utilization, this expansion is well-timed. The aluminum knuckle facility will have an annual capacity of 1.1 million units. We are on track to commence commercial production of knuckles in the last quarter of this financial year and aluminum wheels should start in early April of next year.
Dheeraj Garg (Steel Strips Wheels Ltd): will go towards increasing our tractor wheel capacity by almost a half a million tractor sets in Dapper. And approximately 70 crores will go towards machinery replacement and automation, which is our big focus area now and has been for the last couple of years, to increase our operational efficiency and strengthen our manufacturing capabilities. On the expansion on on a greenfield expansion rather I would say, the board has also approved subject to regulatory clearances setting up of a state-of-the-art greenfield manufacturing facility at Sambhajinagar, Aurangabad. The facility will manufacture alloy wheels and steel wheels for passenger car vehicles and OTR applications and will include also a hot stamping line for body structural parts of the car, which is again a part of our light weighting strategy to enter businesses that call for lightweighting in cars. The total project outlay is estimated at about 1,400 crores and it's going to be spread over the next 15 to 16 months. And this will be funded by a mix of debt, internal accruals, and also likely strategic investments from strategic partners. Looking forward, looking ahead, we remain confident about the rest of financial year '27. At the start of the year, we guided our top-line growth of over 20% and EBITDA per wheel of more than 310. Our first half performance has exceeded both and we are extremely confident of having a very strong guidance for the remaining two quarters based on what we have achieved in the preceding in the last quarter. Demand across all domestic segments remains strong. Exports are recovering and after the hopefully after a new trade deal with America, exports should actually exceed our expectations or our planned revenue this year. Our priorities remain unchanged: operational excellence, providing our expanding our premium and aluminum portfolio, growing exports, having deeper customer relationships, and investing in automation and AI to improve our productivity. With that, I would like to thank all our employees, customers, suppliers, shareholders, and business partners for their continued trust and support. Now, we are open for your questions, please.
Moderator (361 Capital Market Private Limited): Thank you very much, sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask questions may please press star and one on their touchtone phone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use only handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. You may please press star and one to ask questions. The first question is from the line of Aditya Khetan from SMIFS Institutional Equities. Please go ahead.
Aditya Khetan (SMIFS Institutional Equities): Yeah. Thank you, sir, for the opportunity and congrats on a superb performance. Just a couple of questions. Sir, first, when we look in this quarter, obviously, the per wheel EBITDA looks on to the higher side when we compare the history over the last few years. What do you see the sustainable number, sir, could be going ahead? And also, sir, you had mentioned like in first half, we had got some 183 crore of of pass-on benefit. So, suppose if we exclude that benefit, what would has been the EBITDA per wheel in first half? And what would be the sustainable numbers going ahead?
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