Steel Strips Wheels Ltd Management Discussions

Indias Economic Growth Story Continues

Indias economic growth story continues to command global attention, underpinned by robust macroeconomic fundamentals and sustained performance across key sectors. As per provisional estimates released by the Ministry of Statistics and Programme Implementation (MoSPI) in June 2026, Indias real GDP — output adjusted for inflation — grew by 7.7% in FY 2025-26, accelerating from 7.1% in FY 2024-25. The manufacturing sector was a standout performer, expanding in double digits at 10.7%, while services and private consumption also recorded strong gains, reflecting resilient domestic demand.

Looking ahead, the Reserve Bank of India has projected overall GDP growth to moderate to 6.6% in FY 2026-27, citing headwinds from the West Asia conflict, elevated energy prices, and global supply-chain disruptions. Global conditions, meanwhile, remain fragile amid persistent geopolitical and economic policy uncertainty, with trade tensions, rising energy costs, and a below-normal monsoon outlook posing near-term risks. Even so, India is expected to retain its position as the fastest-growing major economy in the world.

Automobile Sector: Highest-Ever Sales Across All Segments

The automobile industry emerged as one of the clearest beneficiaries of this momentum. According to the Society of Indian Automobile Manufacturers (SIAM), FY 2025-26 saw every major vehicle category — passenger vehicles, commercial vehicles, three-wheelers, and two-wheelers — post their highest-ever annual sales, the first such industry-wide record in seven years. Notably, the year began on a subdued note, with a slight de-growth across categories in H1, before staging a powerful turnaround in H2 (passenger vehicles up by 16.7%, two-wheelers up by 21.5%). Exports also hit record levels, reinforcing Indias position as a global automotive manufacturing hub.

Domestic Sales Trends (in numbers)

Category	2020-21	2021-22	2022-23	2023-24	2024-25	2025-26
Passenger Vehicles	27,11,457	30,69,523	38,90,114	42,18,750	43,01,848	46,43,439
Commercial Vehicles	5,68,559	7,16,566	9,62,468	9,68,770	9,56,671	10,79,871
Three Wheelers	2,19,446	2,61,385	4,88,768	6,94,801	7,41,420	8,36,231
Two Wheelers	1,51,20,783	1,35,70,008	1,58,62,771	1,79,74,365	1,96,07,332	2,17,05,974
Quadricycles	-12	124	725	725	120	4
Grand Total	1,86,20,233	1,76,17,606	2,12,04,846	2,38,57,411	2,56,07,391	2,82,65,519

Export Outlook (in numbers)

Category	2020-21	2021-22	2022-23	2023-24	2024-25	2025-26
Passenger Vehicles	4,04,397	5,77,875	6,62,891	6,72,105	7,70,364	9,05,200
Commercial Vehicles	50,334	92,297	78,645	65,818	80,986	94,793
Three Wheelers	3,93,001	4,99,730	3,65,549	2,99,977	3,06,914	4,60,567
Two Wheelers	32,82,786	44,43,131	36,52,122	34,58,416	41,98,403	51,80,429
Quadricycles	3,529	4,326	2,280	4,178	6,422	6696
Grand Total	41,34,047	56,17,359	47,61,487	45,00,494	53,63,089	66,47,685

Overall Industry — Domestic Sales vs. Exports (Grand Totals)

Year	Domestic Sales	Exports	Total (Dom. + Exports)	Domestic YoY	Export YoY
2020-21	1,86,20,233	41,34,047	2,27,54,280	-13.58%	-12.94%
2021-22	1,76,17,606	56,17,359	2,32,34,965	-5.38%	+35.88%
2022-23	2,12,04,846	47,61,487	2,59,66,333	+20.36%	-15.24%
2023-24	2,38,57,411	45,00,494	2,83,57,905	+12.51%	-5.48%
2024-25	2,56,07,391	53,63,089	3,09,70,480	+7.34%	+19.17%
2025-26	2,82,65,519	66,47,685	3,49,13,204	+10.38%	+23.95%

Key Growth Drivers

• GST 2.0 reforms, which lowered rates and improved vehicle affordability across categories

• Successive RBI repo rate cuts, easing financing costs and total cost of ownership, particularly benefiting commercial vehicle fleet operators

• Income tax relief announced in the Union Budget, boosting household purchasing power

• Rising EV adoption, with electric passenger vehicle registrations up over 80% during the financial year

• Sustained capacity expansion, including new manufacturing investments from Hyundai, Tata Motors, Maruti Suzuki, and others, alongside enhanced PLI scheme allocations for auto and auto components

Industry View

FY 2025-26 stands out as a genuine inflection point for Indias automobile industry rather than an incremental improvement. A few things distinguish it from the preceding years of the trend:

A rare industry-wide "clean sweep." Unlike previous years where growth was often led by one or two segments, FY 2025-26 saw every single category post record annual sales simultaneously, for the first time since FY 2018-19, suggesting demand recovery was structural (policy-driven) rather than segment-specific.

A textbook "K-shaped" year that resolved upward. The year opened with de-growth in H1 across most categories, driven by subdued sentiment and high base effects, before a sharp H2 reversal once GST 2.0 and repo rate cuts took hold — one of the sharpest H1-to-H2 swings seen in the dataset, comparable in shape to the FY 2020-21 to FY 2021-22 recovery, but starting from a much higher base.

Exports outpacing domestic growth again, continuing the pattern last seen in FY 2021-22 — a signal that Indian OEMs are increasingly competitive on cost and quality in overseas markets, not just riding a domestic upcycle. Three-wheeler exports (+50%) and two-wheeler exports (crossing 51 lakh units) were the biggest surprises.

Two-wheelers remain the structural backbone of the industry, consistently accounting for roughly 75-77% of total domestic volumes across the six-year window — meaning rural and semi-urban demand, financing availability, and fuel/EV price dynamics will continue to be the single biggest swing factor for overall industry health.

Near-term risk to watch: the West Asia conflicts pass-through to commodity, fuel, and freight costs is the main variable that could soften FY 2026-27 growth from these record FY 2025-26 levels, even as underlying domestic demand fundamentals — affordability, financing, EV transition — remain intact.

Opportunities and Threats

Opportunities

Accelerating EV transition. Electric passenger vehicle registrations rose over 80% in FY 2025-26, supported by PM E-DRIVE, the PLI scheme for auto and auto components, and expanding charging infrastructure. The EV ecosystem represents a multi-billion- dollar investment opportunity through 2030, with India positioning itself as a manufacturing and export base for electric mobility.

Export market expansion. Automobile exports grew an estimated 24% in FY 2025-26, with three-wheelers and two-wheelers leading the surge. Trade agreements such as the India-UK FTA are reducing tariff barriers on finished vehicles while encouraging localisation, and OEMs are increasingly using India as a global manufacturing and export hub rather than a purely domestic-demand play.

Capacity and capital investment momentum. Major OEMs — Hyundai, Tata Motors, Maruti Suzuki, and others — have committed large multi-year capex programmes to expand production capacity, launch new models, and localise components, positioning the industry for sustained volume growth well into FY 2026-27 and beyond.

Policy tailwinds. GST 2.0 rationalisation, income tax relief, and successive RBI repo rate cuts have structurally improved vehicle affordability and financing conditions — tailwinds that are expected to persist into FY 2026-27 given continued government focus on manufacturing and consumption-led growth.

Resilient domestic demand base. With over 70% of industry revenue still anchored in domestic demand, the sector retains a strong buffer against external shocks, while rural and semi-urban markets — the core of two-wheeler demand — continue to benefit from improving agricultural incomes and rural consumption.

Threats

Geopolitical and energy price risk. The prolonged West Asia conflict has already driven up crude oil prices and disrupted global supply chains, with knock-on effects for fuel prices, freight rates, and input costs across the auto value chain — a key factor behind the RBIs downward revision of its FY 2026-27 GDP growth forecast to 6.6%.

Trade policy uncertainty and tariffs. Rising protectionism in key export markets, including proposed US tariff actions, poses a risk to Indias growing auto export base, particularly for OEMs with meaningful exposure to North American and Western markets.

Monsoon and agricultural output risk. A below-normal southwest monsoon outlook for FY 2026-27 could weigh on rural incomes and, by extension, two-wheeler and entry-level passenger vehicle demand, given how closely this segment tracks agricultural performance.

Input cost and margin pressure. Elevated commodity and energy prices, combined with currency volatility, could compress operating margins across the value chain, particularly for export-oriented manufacturers and component suppliers with thinner buffers.

High base effect. With FY 2025-26 having set records across every vehicle category, sustaining double-digit growth rates into FY 2026-27 will be inherently more difficult, and a moderation in headline growth numbers should be read in that context rather than as a sign of weakening fundamentals.

Financial Performance with respect to Operational Performance

A brief on the financial performance of your company during the financial year under review on both standalone and consolidated basis is given as below: -

On standalone basis:

• the Total Income for the financial year under review rose to Rs. 5,19,467.31 lakhs as compared to Rs. 4,44,243.74 lakhs in FY 2024-25, thereby recording an increase of 16.93%.

• In terms of number of wheel rims, the Company has achieved sale of 196.96 Lakh units for the financial year under review as against 190.91 lakh units during the FY 2024-25, thereby recording an increase of 3.17%.

• In terms of number of Aluminum Steering knuckles ("Knuckle"), the Company has achieved sale of 257147 units for the financial year under review as against 46952 units during the FY 2024-25.

• Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) for the financial year under review rose to Rs. 52,295.60 lakhs as compared to Rs. 50,025.36 lakhs in FY 2024-25, thereby recording an increase of 4.54%.

• the Profit before Tax for the financial year under review has slightly decreased to Rs. 27,095.01 lakhs from Rs. 28,201.37 lakhs in FY 2024-25 marking a decline of 3.92%.The Profit after Tax (before Other Comprehensive Income) has also slightly decreased to Rs. 20,208.73 lakhs from Rs. 20,995.01 lakhs, thereby resulting in a decrease of 3.75%.

On consolidated basis:

• the Total Income for the financial year under review rose to Rs. 5,18,596.67 lakhs as compared to Rs. 4,43,216.59 lakhs in FY 2024-25, thereby recording an increase of 17.01%.

• EBITDA for the financial year under review stood at Rs. 51,340.04 lakhs as compared to Rs. 48,750.75 lakhs in FY 2024-25, thereby recording an increase of 5.31%.

• The Profit before Tax after exceptional item for the financial year under review decreased to Rs. 25,414.45 lakhs from Rs. 25,899.28 lakhs in FY 2024-25 thereby recording a decrease of 1.87%. Similarly, the Profit after Tax (before comprehensive income) for the financial year under review decreased to Rs. 19,021.80 lakhs from Rs. 19,528.45 lakhs in FY 2024-25, thereby recording a decrease of 2.60%.

Outlook

Steel & Aluminum is the primary raw material for the products of the Company, and is a very significant part of the final product cost of Steel Wheels, Aluminum wheels and Aluminum Steering Knuckles. Volatility in prices of Steel & Aluminum continue to be a reality and pose a challenge to inventory and financial management for the Company in this competitive auto component sector.

Factor of global growth has become a key linkage between economies and the consumer sentiment. Global growth is still limping on weak wicket and manufacturing output is still shrinking for a large part of the globe. The world economies are currently facing large headwinds on account of geo-political and trade tariff issues popping up over the past year. The uncertainties will restrict investments and surely hurt the demand sentiments across the globe. In the near term, hazy outlooks will restrict growth opportunities for all the automobile industry.

The Company is diversifying towards European Region alongwith newer products to counter the trade tariff impacts.

Top customer concentration is a risk, as 85% of revenues come from domestic market customers and Company is increasing its footprints in Export markets by catering to wide ranges of segment and customers. Company is aggressively working on New Product Developments to widen its reach across domestic and export customers.

Foreign currency movement also poses the risk towards the corporate performance as global currencies swings are extreme due to various macro issues persisting in current environment. This may act as a headwind for some time to come till situation becomes normal and volatility among global currency recedes to normalized levels.

To mitigate the risk, the Company continues to strive to improve its operational performance and develop new components, which are technologically superior and have an edge over the competitors.

Return on Net Worth (PAT/Net Worth)

FY 2025-26	FY 2024-25	Detailed Explanation
12.01%	13.60%	Lower PAT was due to increase in Depreciation and Interest Cost which results in lower return on Net Worth

Key Financial Ratios

Key Financial Ratio	FY 2025-26	ENTER>FY 2024-25	% Change	Calculation formula	Detailed Explanation in case change is more than 25%
Debtors Turnover	32.80 days	30.89 days	6.18%	Average trade Receivables/Gross Revenue from operations	-
Inventory Turnover	59.71 days	59.34 days	0.62%	Average Inventory/ Sale of Products in days	-
Interest Coverage Ratio	2.11	1.92	9.54%	Net profit after taxes + Non-cash operating expenses+ finance cost / Debt service = Finance cost+ Schedule Repayment (excluding prepayment)	-
Current Ratio	1.17	1.11	5.47%	Current Assets/Current Liabilities(excluding Current Maturities of Long term Debt)	-
Debt Equity Ratio	0.16	0.19	-12.21%	Long Term Debt (excluding Current Maturities of Long term Debt)/ Shareholders Equity(excluding Revaluation reserve)	-
Operating Profit Margin (%)	7.61%	9.01%	-15.54%	Profit before tax & interest/Net Sales=Total sales-sales return	-
Net Profit Margin (%)	3.90%	4.74%	-17.74%	Net Profit/Net Sales= Total sales - sales return	-

SEGMENT REPORTING

The Company is primarily engaged in the business of manufacturing Wheel Rims and other automotive components. The inherent nature of activities is governed by the same set of risk and returns, hence these have been grouped as a single segment. The said treatment is in accordance with the principle enunciated in the IND AS 108- Operating Segments.

RISKS & CONCERNS

The Companys business is exposed to many internal and external risks and it has consequently put in place robust systems and processes, along with appropriate review mechanisms to actively monitor, manage and mitigate these risks. Some of the key existing and emerging risks affecting the Company are as follows:

Risks Type	Key Risks	Impact on SSWL	Mitigation
Strategic Risk	Global Economic Scenario	Vehicle purchase across different segment has strong correlations with GDP growth. The decision to purchase a passenger vehicle comes under customers discretionary spending which is linked to their perception of business outlook. Depressed economic outlook can impact this spending and thereby constrain the Companys growth potential.	Diversified product mix, segment mix and customer mix. Target newer market segments which might provide countercyclical support.
	Long term growth dependent on capacity expansion	Capacities utilization across all the plants are inching up gradually and with business environment turning favorable growth in long term will be dependent on Capacity addition.	Debottlenecking exercise across all the facilities are being carried every quarter. Optimum scheduling of production across different products thereby improving yield. Possibility of setting up new lines wherein Company has project Management expertise.
	Supply chain management	The complexity and global span of automotive industry supply chains expose companies to significant sustainability and disruption risks, impacting operational continuity and leading to decline in sales and margins.	SSWL aims to develop a resilient supply chain framework by diversifying suppliers and integrating sustainability criteria into supplier selection. At SSWL we have implemented transparent supply chain practices to ensure compliance with environmental and social standards, thereby reducing potential risks.
Operation Risk	Employee Productivity and retention	Employees engagement and productivity contribute to the growth of the Company. To meet the organization goals and customer expectations, employees with creativity, innovative ideas and expertise in different areas are an asset to the Company. Attrition of talent has a negative impact on the growth of the company.	Focused approach on employee engagement and retention of talent through multiple initiatives includes providing cross functional access, training opportunities, recognitions and skill development. The Company continuously makes efforts to promote diversity and offer equal opportunities to all irrespective of their age, gender, colour or religion etc.
	Competition	Competition in the business has increased significantly causing a serious adverse impact on the margins of the auto component manufacturers. Customer dissatisfaction with price, quality,delivery performance, and design could lead to a loss of market share. In contrary to above, shift of the unorganized market to brand-based product offerings and developing new components turn the competition into opportunity.	The Company continues to strive to improve its operational performance, strict quality controls and develop new components, which are technologically superior and have an edge over its competitors. The Company works closely with its key customers on product development and remains ahead on the technology curve.
	Climate and Environment	Manufacturing sectors are generally associated with high pollution during the manufacturing processes. Growing environmental concerns have made the Companies to focus its investments on renewable sources of energy and controlling & modifying of various manufacturing processes having adverse impacts on the environment.	SSWL is working on alternate sources of energy, water recycling and enhanced use of returnable packaging to minimize waste and maximize reuse. The Company is constantly striving ahead in converting its fossil fuel based power consumption to renewable resources. The Company has invested in special purpose vehicles engaged in the business of production, generation, supply and distribution of wind, solar and/or hybrid power in order to off-take Electricity generated by them under captive consumption. The Company has installed rooftop solar facilities at all its plants. The implementation of which has resulted in substantial conversion of fossil fuel power consumption to renewable sources. All plants have moved completely on fresh polycarbonate sheets to improve lux levels and save power consumption.
	Water security	Fresh water is an important input for both manufacturing processes and domestic purposes of the Company. Processes such as paint booths are water intensive processes in automotive industry. It is important to use quality water to maintain the paint quality. Water scarcity is Indias silent crisis and unpredictable rainfall across India makes the manufacturing plants more vulnerable for water shortages. Hence, insulating against water risk is one of the identified business risks and priorities.	The Company strives to mitigate the water risk by adopting following methods: Optimum usage of water in all operations through various water efficiency measures adopted such as low volume water taps, arresting leakages in pipelines, amongst others. Rainwater harvesting: By increasing rainwater storage capacity. Recycling: By installing ETP/STP and RO plants, we strive to increase our water recycling capacity. Ground water recharge: By installing specially designed deep aquifer pits for improving ground water table to ensure the availability of water for the community.
	Energy Management	The use of energy is an inevitable part of the Companys operations. However, efficient use and the implementation of our own renewable energy sources will help in improving the Companys operations. In the short-term, there may be a negative impact from investing in renewable sources of energy; however, in the long-term there would be a positive impact from methodical use of these energy sources and aligning with industry expectations.	SSWL is constantly striving ahead in converting its fossil fuel power consumption to renewable resources. The Company is actively engaged in energy management. The Company has invested in Clean Max Astria Pvt. Ltd. (CMAPL), a special purpose vehicle engaged in the business of production, generation, supply and distribution of wind, solar and/or hybrid power to off-take Electricity generated by it under captive consumption. The Company has installed rooftop solar facilities at all its plants. All plants have moved completely on fresh polycarbonate sheets to improve working conditions and save power consumption.
	Currency Volatility	Volatility in currency exchange movements resulting in transaction and translation exposure.	Close monitoring of hedging strategy by risk management committee. Quarterly assessment of foreign exchange exposure by Board.
Financial Risk	Debt Burden	The Companys outstanding indebtedness in an adverse environment can have significant impact on financial flexibility and business as a whole.	Close monitoring of debt profile and continuous effort to bring the cost in line with industry. Continuous effort to maintain the impeccable credit history. Quarterly review of financial leverage and efforts are on to move towards industry benchmark.
	Credit Rating	Failure to maintain credit ratings could adversely affect cost of funds.	Regular exchange of information and updates with agency. Focused approach to work on areas of improvement and to build upon areas of strength. Close monitoring of triggers highlighted in rating rationale.
	Social costs	SSWLs assumptions while estimating social costs like gratuity funding are subject to actuarial risks and any short fall could put pressure on financial performance of the Company.	A framework to manage social cost risks has been deployed to ensure that obligations remain affordable and sustainable.
	Credit Risk	Customer default can pose a significant challenge and impact the bottom line of the Company.	Systems are in place to assess the credit worthiness of new as well as existing customers.
	Financial Fraud	Financial fraud can challenge the reputation as well as existence of the Company besides denting the confidence on the systems in place.	Adequate Internal financial control systems are in place. Adequate accounting records are in place to safeguard the assets of Company and for preventing and detecting frauds. Vigil Mechanism in place that provides a formal mechanism for all Directors, employees and vendors of the Company to approach the Ethics Counselor/Chairman of the Audit Committee of the Board and make protective disclosures about the unethical behavior, actual or suspected fraud.
Legal Risk	Ethics and Compliance	The Company expects all its employees to adhere to the Code of Conduct of SSWL and practice Ethical behaviour. The Company follows zero tolerance for any non-compliance as this will have an adverse impact on the Company. Due to the dynamic nature of laws, rules and regulations, it has become imperative for the Company to ensure their compliance. Any failure to comply with the same may impact on the reputation of the Company adversely.	SSWLs Code of Conduct, Whistle Blower Policy, Code of Conduct for prevention of insider trading, code of practices and procedures for fair disclosure of unpublished price sensitive information, Policy on materiality of Related Party Transaction and Grievance Redressal across stakeholders ensures ethical behavior and compliance with applicable laws and regulations. The said Codes and policies provide for a framework for employees and other stakeholders to ensure that business is governed only by ethical practices. Further, any amendments to the laws, rules and regulations are checked on a regular basis. The said policies and code of conduct alongwith any changes thereon are duly communicated to the concerned stakeholder groups.
Health and Safety	Health and Safety	Managing safety and health is a top priority at SSWL. Safe places and the good health of employees at work contribute to better productivity. Risk Assessment is a continuous process followed by measures to effectively control them to ensure safety and good health of our employees at work.	To mitigate the risk, we strictly follow the rules and procedures laid down by our stringent health and safety management systems. We regularly conduct trainings to create awareness of safe working conditions and building confidence of the employees. Further, the Company, conducts routine health check-ups and maintains internal health centers to monitor the well-being of our employees.
Information/ Cyber security	Information/Cyber security	The fast pace at which auto sector is growing at present, it is bound to face concerns relating to IP, data privacy and risk-shifting for warranty issues that would need to be addressed to settle uncertainties amongst stakeholders. Further, threats to external cyber- attacks/ hacking and internal leakage/ modification of information/ failure to protect information are other concern issues.	Continuous protection of confidential information across the IT landscape to prevent loss of confidential data through installation of various antivirus and malware protection softwares, etc. Periodic audits are conducted to ensure adherence to the processes. Additionally, the company has obtained ISO- 27001 certification to comply best in class IT norms.

INTERNAL CONTROLS AND THEIR ADEQUACY

The Company has adequate internal control procedures commensurate with size, nature of its business and complexity of its operations. These internal policies ensure efficient use and protection of the assets and resources, compliances with policies and statutes and ensure reliability as well as promptness of financial and operational reports. The Internal auditor of the Company makes continuous assessment of the adequacy and effectiveness of the internal controls and systems across the Company.

DEVELOPMENT IN HUMAN RESOURCES

Growth without human capital development will be in-complete growth. Your Company is attempting to match the human capital growth improvement amid intense competition. Talent retention has become an increasingly vital tool for matching customer expectations and will drive future growth of the Company. SSWL is extremely proud of its workforce for all the resilience shown throughout the period under review. The motivation of leading from the front from the top leaders of the Company exemplified the efforts towards this journey of this recovery.

SSWL is increasing sensitivity towards the EHS factor of human capital and is working extensively towards worker safety and happy mind. Various initiatives towards improving the health quotient and health awareness amongst workers are being taken up. The Company works towards inclusive growth which comes with healthy mind at work. All the plants of SSWL are aggressively working towards improving well-being and health score of the employees.

The Company firmly believes the culture of meritocracy and working extensively towards employee trainings for enhancing their job skills. Firm targets for On-Job training along with class room trainings are being taken up by each unit to ensure improvement in the learning curve of the employees. Various internal job rotations are deployed for enhancing the work culture and promoting the meritocracy. As on March 31,2026, the Company had 3063 permanent employees on the rolls of the Company.

DISCLAIMER

This report contains certain statements that the Company believes and may be considered as forward looking statements. These forward looking statements may be identified by their use of words like ‘ plan, ‘hope, ‘will, ‘expect, ‘aim or such similar words or phrases. All such statements are subject to risks and uncertainties which could cause actual results to vary materially from those contemplated by the relevant forward looking statements.