Steel Strips Wheels Limited – Attractive Valuations

Notes from Investor Presentation Q1fy25
Company Overview
• Operational Wheel Capacity 24 Mn
• steel wheel – 20Mn Alloy wheel – 3.6Mn
Strategic Partnerships

1. TATA Steel Limited, India (6.9 % Stake in Steel Strips Wheels Limited)
   • Tata Steel Limited (through its then wholly Kalimati owned subsidiary Company namely Investment Company Ltd, which has now merged with Tata Steel Ltd) had entered into a Strategic Alliance Agreement in January 2008 with SSWL.
   • Through this relationship, Tata Steel supports us with more flexibility in areas such as supply chain management, enjoying priorities and stronger support for new grade developments, etc.
2. Nippon Steel & Sumitomo Metal Corporation, Japan (5.4 % Stake in Steel Strips Wheels Limited)
   •Sumitomo Metal Industries Limited, merged with Nippon Steel Corp and now known as Nippon Steel & Sumitomo Metal Corporation (NSSMC), has entered into a Strategic Alliance Agreement in December 2010.
   • This relationship helps in bringing international expertise in steel quality and newer technology exploration.
   •Sumitomo Group, which has 400 years of manufacturing history, founded Sumitomo Metals in 1897 and it is one of the world’s leading steelmakers.
   Products
3. Steel Wheels Rs. 732 I ncl. Exports crores (~ 7 1 %) ( Q1 FY2 5 Revenues)
4. Alloy Wheels Rs. 294 I ncl. Exports crores (~ 2 9 %) ( Q1 FY2 5 Revenues)
   Product Capacities & Utilization
   Steel wheels
   •Phased addition of 70 lakh steel wheel operational capacity
   •Resolution plan successfully implemented in January 2024 by payment of ~Rs 138.15 Crs. (Rs. 5 Crs. Equity and Rs 133.15 Crs. Inter Corporate Loan)
   Alloy Wheels
   •Alloy Wheels Capacity to be expanded by 33% i.e. 12 Lakh Wheels to 48 Lakh Wheels in a phased manner at Mehsana Plant, Gujarat
   Plants
   •Dappar, Punjab – capacity10.8Mn :- Catering to PV, MUV, Tractor & OTR
   •Chennai, Tamil Nadu – 7.5Mn – catering to Pv & CV
   •Jamshedpur, Jharkhand – 2.2Mn – catering to HCV / LCV
   •Bhuj Gujarat – 7 – catering to Hcv , tractor, PV
   •Mehsana , Gujarat – 3.6 Mn – catering to PV
   •sareikela, Jharkhand – Backward Integrated Plant for Steel Wheels
   Clientele, Steel wheels Breakup And Export profile

Growth Drivers
•Sales Mix Shift Shift of Sales Mix towards High Margin Accretive Segments – Alloy Wheel & Export
•Development of Robotic Automated Operation process for Operating Cost Rationalization
•Exploring various avenues to foray into EV Segment
•Steel Wheel Market to grow at 8% p.a. whereas Alloy Wheel Market to grow at 12% p.a. over next 5 years
•Strengthening Balance Sheet thereby Improving Return on Capital Employed & Return on Equity
Shift of sales Mix And Balance Sheet KPIs

Increasing Cash Accruals aiding fuel for growth and repayment of Debt, to improve Returns on Capital Employed and Returns on Equity in long run
Q1Fy25 financials

Disc- initiated a tracking position , not a recommendation to buy or sell