Steel Strips Wheels Q1 FY27: Growth Led by Domestic Demand, Alloy Mix, and a Bigger Aluminium Push

Steel Strips Wheels Limited (SSWL) entered FY27 with a strong first quarter, combining a sharp step-up in revenue with incremental margin improvement. In Q1 FY27, standalone revenue from operations increased to Rs. 1,509.8 crores from Rs. 1,186.8 crores in Q1 FY26, a 27.2% year-on-year rise. EBITDA rose 33.0% to Rs. 162.3 crores and PAT increased 43.3% to Rs. 71.5 crores. Margin movement was steady rather than dramatic, but directionally positive. EBITDA margin improved to 10.7% from 10.3%, and PAT margin expanded to 4.7% from 4.2%.

Management’s commentary on the earnings call repeatedly returned to one key operating metric: EBITDA per wheel. The company stated EBITDA per wheel rose to Rs. 314 in Q1 FY27 compared with Rs. 262 in Q1 FY26, supported by operating leverage, a premium-tilted product mix, and a long-running effort to secure input price increases from customers. The broader point was that profitability improvement was not being positioned as a one-off, but as the outcome of multi-quarter commercial negotiations and plant-level efficiency work.

Product mix: steel still dominates, but alloy remains the growth lever

SSWL continues to be a steel-and-alloy wheel manufacturer at scale, while its aluminium knuckles business is still early but growing. The investor presentation provides a clear revenue split for Q1 FY27.

Steel wheels remained the largest contributor, generating Rs. 953.8 crores, about 63% of quarterly revenues (including exports and scrap). Alloy wheels delivered Rs. 532.9 crores, around 35% (including exports). Aluminium knuckles added Rs. 23.0 crores, around 2%.

The volume picture was supportive. Total volumes in Q1 FY27 were reported at 52 lakh units, including 41 lakh steel wheels, 10 lakh alloy wheels, and 1 lakh aluminium knuckles. While the presentation shows a decline in the volume growth line, management commentary emphasized improving utilization and the rising share of premium products as the driver of profitability.

Financial snapshot (Standalone)

Capacity and utilisation: alloy expansion sets up FY27 ramp

SSWL’s operating capacity is described as about 25 million-plus wheels, with steel wheel capacity of about 20 million and alloy wheel capacity of 5.0 million. The company also listed aluminium knuckles capacity of 0.5 million (as per its overview slide).

The capacity utilisation table in the presentation indicates that utilisation strengthened in Q1 FY27.

For steel wheels, capacity was 207 lakh units with utilisation at 82% in Q1 FY27. For alloy wheels, capacity was 50 lakh units with utilisation at 82% in Q1 FY27. The presentation also shows FY27E alloy capacity at 62 lakh units.

Management’s capex commentary on the call adds clarity on what is changing next. The company said it is setting up two manufacturing facilities in Bhuj, Gujarat: an aluminium wheel plant with annual capacity of 1.2 million wheels and an aluminium knuckles facility. Trial production is expected to begin in Q4 FY27. Management also indicated that the new aluminium capacity is effectively sold out, underscoring why utilisation ramp-up is a central execution variable for the next two to three quarters.

In addition, management discussed a brownfield expansion focused on agriculture wheels, with the line also being fungible to make passenger car wheels. The company indicated capex of about Rs. 150 crores for this project, split between the current year and next year. Management said it is optimistic about commercialising this expansion before the end of the calendar year, with visible results in Q4.

Exports: a softer quarter, but management expects recovery

Exports were a weak point in the year-on-year comparison. The presentation shows export revenue of Rs. 127 crores in Q1 FY27, lower than Rs. 160 crores in Q1 FY26.

Management attributed the earlier export disruption to tariff-related headwinds and stated that June showed recovery as trade conditions normalized. The company also highlighted that it has been diversifying its export exposure across geographies, including Europe and Latin America, to reduce reliance on a single region. On the call, management guided to an export revenue target of about Rs. 600 crores for FY27.

This matters because SSWL’s strategic narrative is increasingly global. Management explicitly stated a longer-term ambition to sell more wheels in export markets than in India over the next decade, using India’s manufacturing cost advantages. While this is directional commentary rather than a near-term commitment, it frames why Bhuj is being positioned as a more export-facing unit.

Aluminium knuckles: small today, but capacity is being scaled

Aluminium knuckles remain a small part of revenue, but the business is being built as a meaningful vertical. In Q1 FY27, SSWL reported sales of about 0.80 lakh knuckles generating Rs. 23 crores of revenue.

On the call, management said the business began with one key customer program that was linked to electric vehicles, and the market saw ups and downs. However, management stated that within its two current customers it has received additional business awards and that current capacity is running at 100% utilisation. This is the context behind the Bhuj knuckles expansion.

Capex and balance sheet context

The company’s investor presentation stated net capex of Rs. 196 crores was incurred through FY26, largely focused on aluminium wheels and aluminium knuckles.

For FY27, management guided to about Rs. 420 crores of capex for Bhuj expansions (alloy wheels and knuckles) plus about Rs. 80 crores of other plant and replacement capex, totalling around Rs. 500 crores. Separately, management discussed the agriculture wheel brownfield capex of about Rs. 150 crores, which would be phased across the current and next year.

In terms of leverage and liquidity, the presentation shows long-term debt at Rs. 382 crores in FY26. The balance sheet also indicates cash and cash equivalents of Rs. 6.5 crores as of 31 March 2026. On the call, management explained that interest costs are influenced by factoring limits, cited at Rs. 400 to 500 crores, and also by working capital intensity when commodity prices spike. The company also stated that aluminium price pass-through has shifted to monthly settlement, with reimbursement within about 30 days.

Takeaways

SSWL’s Q1 FY27 performance combined strong revenue growth with modest margin expansion, supported by improving utilisation and a product mix that continues to tilt toward higher-value segments. Steel wheels remain the base business, but alloy wheels and exports are being positioned as the long-term drivers of EBITDA per wheel improvement.

The next key milestones are operational rather than conceptual: trial production for the Bhuj aluminium expansions in Q4 FY27, and a rapid utilisation ramp thereafter. If execution stays on track and export recovery plays out as management expects, FY27 is set up as a year where volume, mix, and capacity additions all work together rather than offset each other.