Steel band wheels show moderate growth among performance across sectors

Steel Strips Wheels Limited (SSWL), a leading automotive wheel manufacturer in India, has announced its financial results for June 2024, showing moderate growth despite mixed performance across various segments of the automotive industry.

The company recorded a net turnover of PLN thousand. 358.11 crores as of June 2024, representing a slight increase of 0.64% over Rs. 355.83 crores in June 2023. Gross turnover witnessed a marginally higher growth of 1.15% to reach Rs. 434.21 crore in June 2024 compared to Rs. 429.26 crores in the same month last year.

Segment analysis shows a mixed picture of the automotive market:

1. Two- and three-wheeler sector: This segment emerged as a star performer, registering an impressive 87% volume growth and a staggering 99% value growth year-on-year. The surge likely reflects the ongoing revival of urban mobility and last-mile delivery services post-pandemic.
2. Tractor Segment: The agriculture sector showed solid growth with both volume and value increasing by 20% compared to June 2023. This can be attributed to favourable monsoon outlook and government initiatives supporting agricultural mechanisation.
3. Truck segment: Remained relatively stable, with volume down 1% but stable, indicating potential pressure on freight rates or a temporary slowdown in infrastructure projects.
4. Passenger car segment:
   • Sales of alloy wheels fell by 4%, but their value increased by 5%, indicating a shift towards premium products.
   • Sales of steel rims recorded a greater decline: volume decreased by 12% and value by 5%. This decline was likely caused by changing consumer preferences or production constraints.
5. Exports: Despite a 25% increase in volume, export values ​​fell by 16%, which may indicate pricing pressure in international markets or unfavourable exchange rates.

Overall, SSWL managed to achieve 2% volume growth and 1% value growth across all segments combined. These results are presented against the backdrop of a challenging global economic environment, with factors such as inflation, supply chain disruptions and geopolitical tensions impacting various industries.

The company’s ability to maintain modest growth in this complex environment demonstrates its resilience and adaptability. However, the divergent performance across segments highlights the need to strategically focus on high-growth areas while addressing challenges in underperforming sectors.

As the automotive industry continues to evolve towards electrification and weight reduction, SSWL’s future performance will likely depend on its ability to innovate and adapt to changing market dynamics.