Steel Strips Wheels Poised for Growth as Axis Securities Highlights Export Gains and Alloy Wheel Capex

Steel Strips Wheels has drawn renewed attention in the auto component space as analysts turn optimistic on the sector. Axis Securities has listed the counter as its "Pick of the Week", citing recovering domestic demand, rising export contribution and fresh capacity additions. The brokerage sees visible earnings triggers over the next few quarters as new projects stabilise and operating leverage improves.

The stock trades near Rs 197 as on 13th January, 2026, against a target price of Rs 220, implying moderate upside over the next 6–9 months. Axis Securities bases its stance on three pillars: domestic recovery in original equipment business, strategic capex in alloy wheels, and a new aluminium knuckle vertical that could support medium-term growth and margin resilience.

Recent projections for Steel Strips Wheels indicate a steady uptrend in scale and profitability from FY25A to FY27E. Net sales are expected to move from Rs 4,877 crore in FY25A to Rs 5,241 crore in FY27E, signalling stable growth in the core business. Operating metrics also show improvement, with higher efficiency seen across key profitability indicators during the period.

EBITDA is estimated to rise from Rs 496 crore in FY25A to Rs 610 crore in FY27E, highlighting better operating performance. Net profit is projected to increase from Rs 184 crore to Rs 266 crore over the same horizon. This earnings trend feeds directly into shareholder metrics, with earnings per share likely to climb from Rs 11.7 to Rs 17.0 between FY25A and FY27E.

Valuation parameters for Steel Strips Wheels reflect both earnings growth and improving return ratios. EV/EBITDA is projected to ease from 6.0x in FY25A to 4.4x in FY27E. The price-to-earnings multiple is expected to compress from 17.1x to 11.8x, suggesting better value support. At the same time, return on equity is seen rising from 10.7% to 12.5%.

Despite the improvement in RoE, the price-to-book value ratio for Steel Strips Wheels is forecast to moderate from 1.8x to 1.4x between FY25A and FY27E. Analysts view this combination of stronger profitability, rising returns and softer valuation multiples as signalling a phase of healthier financial strength. Margin gains and better capital productivity underpin this assessment.

The expected movement in key financial indicators of Steel Strips Wheels over FY25A–FY27E can be summarised as follows, highlighting the growth profile across revenue, profitability, and valuation benchmarks during the forecast period, as captured in analyst estimates for the company.

Metric	FY25A	FY27E
Net Sales (Rs crore)	4,877	5,241
EBITDA (Rs crore)	496	610
Net Profit (Rs crore)	184	266
EPS (Rs)	11.7	17.0
EV/EBITDA (x)	6.0	4.4
P/E (x)	17.1	11.8
RoE (%)	10.7	12.5
P/BV (x)	1.8	1.4

Steel Strips Wheels growth triggers from exports and alloy wheels

The investment case for Steel Strips Wheels, according to Axis Securities research, rests largely on high-margin export business and a defined growth runway. The company is strengthening its foothold in Europe, with the region’s contribution moving from 32% in FY25 to 52% in H1FY26. This expansion is tied to new alloy wheel programmes for overseas customers.

European demand for Steel Strips Wheels products remains stable, supported by a ramp-up in aluminium wheel supplies. Two programmes are already operational and two additional programmes are scheduled to start in Q4. These programmes are expected to support volumes and margins, offsetting softness in some other export geographies during the same timeframe.

Conditions in the United States market remain weak for Steel Strips Wheels, and this continues to be a watch point. If the current situation extends, the company could see an annual revenue impact of around Rs 200 crore from this geography. There is also a policy angle, linked to tariffs and the penalty on Russian oil imports.

Analysts note that a reduction in US tariff rates to 28%, should the extra 25% levy on Russian oil imports be withdrawn, may reopen commercial discussions with American customers of Steel Strips Wheels. Such a move could restore some lost business. However, this remains contingent on regulatory changes, which are not under the company’s control.

Steel Strips Wheels alloy wheel capacity and technology plans

Alloy wheels have become an important value contributor for Steel Strips Wheels and a key focus of capital allocation. In H1FY26, alloy wheels accounted for 36% of the company’s total revenue. Current alloy wheel capacity stands at 4.2 million units, with plans underway to increase this to 5.3 million units by FY26.

The capex strategy at Steel Strips Wheels in alloy wheels is aimed more at improving capability than simply adding base capacity. The company intends to invest about Rs 88–90 crore to create an additional 1 million units of flow-formed wheel capability within its existing set-up. This will use advanced German technology suited for lightweight wheels.

These flow-formed alloy wheels from Steel Strips Wheels are targeted largely towards export applications, where lighter wheels can support fuel efficiency and performance requirements. The focus on technology-led capability is expected to enhance product mix and reinforce the company’s position in higher-value segments. This could lift margin profile over the medium term.

Steel Strips Wheels aluminium knuckles and new vertical scale-up

Aluminium knuckles represent a relatively new but growing line of business for Steel Strips Wheels. During H1FY26, this vertical generated revenue of Rs 33 crore, with 1,24,000 units sold in the latest reported quarter. Management plans to expand this line to benefit from structural shifts in vehicle platforms towards lighter components.

Steel Strips Wheels intends to scale aluminium knuckle capacity to between 3 lakh and 5 lakh units in FY26, supported by a capex plan of about Rs 130 crore. This category is positioned to cater to electric vehicles and premium models that require lighter suspension parts to support fuel efficiency or range. It also aligns with evolving regulations.

Further ahead, Steel Strips Wheels is working on adding another 0.5 million units of aluminium knuckle capacity. The objective is to reach a total capacity of around 1 million units by September–October 2026. At peak utilisation, this vertical could potentially generate revenue of Rs 240–270 crore, assuming demand traction from target segments sustains.

Steel Strips Wheels volume outlook and Axis Securities view

Axis Securities has provided detailed estimates for volumes and financial performance of Steel Strips Wheels over the next few years. The brokerage expects total wheel volumes of 2.05 crore units in FY26 and 2.1 crore units in FY27. This growth is linked to several demand drivers across domestic and export markets, along with product mix changes.

"We estimate total wheel volumes at 2.05 Cr and 2.1 Cr units in FY26 and FY27, respectively, supported by an anticipated gradual recovery in the CV/tractor segment, a rising share of alloy wheels, higher exports, and the introduction of Aluminium Steering Knuckles. Accordingly, we estimate the company's Revenue/EBITDA/PAT to grow at 6%/8%/6% CAGR over FY25-FY28E," said the research analysts of Axis Securities.

For domestic operations, Steel Strips Wheels is seen benefiting from a gradual recovery in the commercial vehicle and tractor categories, which had earlier experienced pressure. A higher share of alloy wheels and aluminium knuckles in the product basket is expected to improve realisations. Combined with rising exports, this underpins the brokerage’s medium-term growth assumptions.

The overall outlook for Steel Strips Wheels, as presented by Axis Securities, reflects a blend of cyclical recovery and structural initiatives. Domestic demand improvement, alloy wheel and knuckle capex, expanding European business and potential normalisation in US trade policies are key variables. On current projections, the company appears set for a period of measured growth with improving financial ratios.

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