Steel Strips Wheels - Steady Core And Expanding Opportunities: Prabhudas Lilladher

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Prabhudas Lilladher Report.We visited Steel Strip Wheels Ltd.'s plants in Mehsana, Gujarat. The company along with Kalink Co. Ltd. (one amongst top seven alloy wheel manufacturers in the world) had entered into a strategic alliance in September 15 for setting up this plant. The plant became operational in 2019 and currently has ~3 million alloy wheel capacity expected to expand to 4.8 million. Management highlighted clear strategy of-diversifying product portfolio,expanding export market andshifting its sales mix towards high-margin segments. It is also working on wheels for electric vehicles and majority of its business is agnostic to powertrain. Steel Strip Wheel remains ahead on technology front, focused on weight reduction of products to offer superior quality and aims to shift its sales mix towards high margin segments like alloy wheels and exports. We believe steady core business and ramp-up of new businesses will help expand revenue and margins with revenue growth expectation of ~9-10% on blended basis over next five years and help diversify its mix. Steel Strip Wheel aims to grow volumes by 12-16% in FY24, with revenue of ~Rs 45 billion-47 billion in FY24 versus Rs 40 billion in FY23 with export contributing Rs 5 billion-6 billion. The stock is currently trading at a valuation of ~17 times FY24E and it could see earnings per share growth of 16-20% based on management volume and Ebitda guidance, in our view..Click on the attachment to read the full report:.Steel Strips Wheels - Focusing On Product Diversification, Export Market: Axis Securities.DISCLAIMERThis report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Steel Strips Wheels - Steady Core And Expanding Opportunities: Prabhudas Lilladher

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