I feel this is not a sudden surprise. Management had clarified in AGM that revenue will be muted in FY25 as CV and tractors are expected to slow down and some export programs are expected to start towards the end of FY25 or early FY26. Any finally WIL is auto ancillary company and its prone to cyclicality in the auto sector. Even in auto sector, one thing that needs appreciation is the way management has maintained strength of balance sheet and working capital.
- From FY21 sales has doubled from 2200 Crs to 4600Crs in FY25. But the debtor days has reduced from 117 days (117 could be due to COVID, we can consider 70 days as normalized debtor days) to 57 days even though the exports have become 25% of the sales. Generally credit period increases with increase in exports for covering transit period and extended credit period for overseas customers.
- Much of the debt is related to working capital loan backed by inventory and receivables.
- Inventory days, cash conversion days - have improved even though the sales have doubled from FY21 to FY25. Due to this tight working capital management, operating cash flows has doubled from 150+cr to 300+cr from last 2 years
- Most of the capex done with free cash flows (all the cash from the business is getting reinvested)
- ROCE has improved from 5% to 13% (it has reached close to 15% quarterly in last 3 quarters)
- There is still much scope for improvement in ROCE with the ramp up of alloy wheels, PV wheels (this has just turned profitable and historically it has clocked 13-15Cr of PAT)
- CV - In Q3 FY25 seems to be better compared to Q2 FY25
- Tractors wheels expected to do better in Q4FY25
- Alloy wheels capacity will be increased from 40K to 50K with debottlenecking (doesn’t need much capex here, not sure about the quantum)
- Very conservative management with good track record of corporate governance (atleast I haven’t come across issues related to CG).
- Consistent dividend player (they have given dividend even in COVID year)
- Management never did concall earlier or released investor presentation. After the group restructure, started doing concall half-yearly. This shows that atleast management wants to get the better market visibility for the company.
- Another point management highlighted in the recent concall is that they are trying to improve credit ratings over a period of 1.5 to 2 years. This will help to refinance debt at lower interest rates.
Stock has not given returns from 2019. IDFC and Reliance Nippon who are owning this counter from 2019 might not have got returns (infact negative returns, not even crossing FD returns 
). Looks like they are tired of holding and exiting slowly creating selling pressure even though fundamentally things have improved. Management also acknowledged in the recent concall that stock has not moved inspite good performance 
Hoping that market recognises in the next couple of quarters.
Disc: Invested and hence biased
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