ET Bureau & Agencies Securities has buy call on with a target price of Rs 1025. The current market price of the company is Rs 883.9.
Time period given by analyst is six to nine months when the company's price can reach defined target.
Steel Strips Wheels, incorporated in the year 1985, is a small cap company (having a market cap of Rs 2776.54 Crore) operating in auto ancillaries sector.
It's key products/revenue segments include wheel rims, duty drawback, job work for the year ending March 31, 2021.
Financials
For the quarter ended June 30, 2022, the company has reported a standalone total income of Rs 1016.11 crore, down 4.92 per cent from last quarter total income of Rs 1068.74 crore and up 49.34 per cent from last year same quarter total income of Rs 680.40 crore. Company has reported net profit after tax of Rs 48.13 crore in the quarter ended June 30, 2022.
The company’s top management includes Mr.Rajender Kumar Garg, Ms.Deva Bharathi Reddy, Mr.Virander Kumar Arya, Mr.Ajit Singh Chatha, Mr.Shashi Bhushan cupta, Mr.Sanjay Surajprakash Sahni, Mr.Surinder Singh Vird, Mr.Sanjay Garg, Mr.Manohar Lal Jain, Mr.Andra Veetil Unnikrishnan, Mr.Dheeraj Garg, Mr.Siddharth Bansal. Company has AKR & Associates as its auditors. As on June 30, 2022, the company has a total of 3 crore shares outstanding.
Investment Rationale
The brokerage expects SSWL’s revenue/EBITDA/PAT to grow at 14/8/16 per cent CAGR over FY22-FY24E, led by the increased demand from the domestic automobile industry and higher contribution from alloy wheels and export segment.
Repayment of debt would aid in increasing profitability. Robust volume growth and mild expansion in margins over the next two years could result in expansion in valuation multiples.
The Board of SSWL has announced split of the face value of the shares from Rs 5 FV to Re 1 FV. The record date for the same could be fixed in late September or October 2022. The brokerage believe investors can buy the stock in the band of Rs 870-885 and add on dips to Rs 750-765 band (8.5xFY24E EPS) for a base case fair value of Rs 958 (10.75x FY24E EPS) and bull case fair value of Rs 1025 (11.5x FY24E EPS) over the next 2-3quarters.
Promoter/FII Holdings
Promoters held 62.6 per cent stake in the company as of June 30, 2022, while FIIs owned 0.07 per cent, DIIs 0.43 per cent.
Time period given by analyst is six to nine months when the company's price can reach defined target.
Steel Strips Wheels, incorporated in the year 1985, is a small cap company (having a market cap of Rs 2776.54 Crore) operating in auto ancillaries sector.
It's key products/revenue segments include wheel rims, duty drawback, job work for the year ending March 31, 2021.
Financials
For the quarter ended June 30, 2022, the company has reported a standalone total income of Rs 1016.11 crore, down 4.92 per cent from last quarter total income of Rs 1068.74 crore and up 49.34 per cent from last year same quarter total income of Rs 680.40 crore. Company has reported net profit after tax of Rs 48.13 crore in the quarter ended June 30, 2022.
The company’s top management includes Mr.Rajender Kumar Garg, Ms.Deva Bharathi Reddy, Mr.Virander Kumar Arya, Mr.Ajit Singh Chatha, Mr.Shashi Bhushan cupta, Mr.Sanjay Surajprakash Sahni, Mr.Surinder Singh Vird, Mr.Sanjay Garg, Mr.Manohar Lal Jain, Mr.Andra Veetil Unnikrishnan, Mr.Dheeraj Garg, Mr.Siddharth Bansal. Company has AKR & Associates as its auditors. As on June 30, 2022, the company has a total of 3 crore shares outstanding.
Investment Rationale
The brokerage expects SSWL’s revenue/EBITDA/PAT to grow at 14/8/16 per cent CAGR over FY22-FY24E, led by the increased demand from the domestic automobile industry and higher contribution from alloy wheels and export segment.
Repayment of debt would aid in increasing profitability. Robust volume growth and mild expansion in margins over the next two years could result in expansion in valuation multiples.
The Board of SSWL has announced split of the face value of the shares from Rs 5 FV to Re 1 FV. The record date for the same could be fixed in late September or October 2022. The brokerage believe investors can buy the stock in the band of Rs 870-885 and add on dips to Rs 750-765 band (8.5xFY24E EPS) for a base case fair value of Rs 958 (10.75x FY24E EPS) and bull case fair value of Rs 1025 (11.5x FY24E EPS) over the next 2-3quarters.
Promoter/FII Holdings
Promoters held 62.6 per cent stake in the company as of June 30, 2022, while FIIs owned 0.07 per cent, DIIs 0.43 per cent.
(Disclaimer: Recommendations given in this section or any reports attached herein are authored by an external party. Views expressed are that of the respective authors/entities. These do not represent the views of Economic Times (ET). ET does not guarantee, vouch for, endorse any of its contents and hereby disclaims all warranties, express or implied, relating to the same. Please consult your financial adviser and seek independent advice.
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