So what I can understand, Alloy wheels will be a key trigger for generating higher margins (also knuckles). Mgmnt has clearly stated they’re not chasing lower margin business, ideally i would expect this suggests they’re not looking to increase market share in various segments, instead would be looking to ramp up exports, which would be of alloy wheels more than that of steel wheels.
Alloy wheels would contribute approximately 210-220 cr EBITDA.
And with 85% utilization of 27mn capacity Steel wheels can do 450cr EBITDA. This would get us to Roce north of 25%.
But then what next? As this might have been already discounted into price, and if growth is coming in the industry it may not match with the reinvestment aspirations of the company.
Relatively pricing is cheap, absolute maybe not.
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