SSWL surges on reporting 20% growth in total wheel rim sales in May

Steel Strips Wheels (SSWL) is currently trading at Rs. 167.95, up by 3.25 points or 1.97% from its previous closing of Rs. 164.70 on the BSE.

The scrip opened at Rs. 164.00 and has touched a high and low of Rs. 171.00 and Rs. 162.00 respectively. So far 5613 shares were traded on the counter.

The BSE group 'B' stock of face value Rs. 10 has touched a 52 week high of Rs. 196.00 on 23-May-2014 and a 52 week low of Rs. 111.50 on 20-Aug-2013.

Last one week high and low of the scrip stood at Rs. 189.00 and Rs. 161.60 respectively. The current market cap of the company is Rs. 255.42 crore.

The promoters holding in the company stood at 56.61% while Institutions and Non-Institutions held 0.63% and 42.77% respectively.

SSWL has reported 20% growth in its total wheel rim sales to Rs 9.88 lakh as compared to 8.23 lakh in May 2013. The month showed encouraging sign to follow from across the board sectors. In terms of Value, the company has achieved gross turnover of Rs 104.53 crore in May 2014 as compared to Rs 100.52 crore in May 2013, recorded a growth of 4% and achieved a Net turnover of Rs 94.93 crore in May 2014 as against Rs 90.72 crore in May 2013, recorded a growth of 5%.

Passenger car segment grew 24% in May 2014 Y-o-Y and the new businesses attained by the company is showing results as it gains market share across the board customers. The company will steadily gain market share in the PV segment over the coming FY as the presence in majority of the new launches will make its presence felt. Few of the new businesses are starting in June & July to further push up the volumes for this segment.

Meanwhile, the export volumes have dropped by 10% to 0.95 lakh in May 2014 as against 1.06 lakh in May 2013. The export volumes dropped on account of season factor like maintenance shutdowns and holiday season in European region. The export segment is robust and the order book is looking healthy going forward.

Moreover, 2 & 3 Wheeler segment volumes grew by 71% in May 2014 Y-o-Y, after the new businesses are now ramping up gradually and picking up pace. This segment is gaining a lot of momentum with rural income picking pace and confidence also growing among the bottom of the pyramid. This segment will report healthy growth in this year with leading player running at full capacity and still demand is very strong. Volumes are expected to further move higher with ramp up expected from the southern side and early indications have come up from customer for a 10% further ramp up.

Tractor segment volumes dropped by 21% in May 2014 Y-o-Y in May 2014 on the back of some unseasonal rainfall across the country, while LCV & MHCV segment volumes dropped by 5% Y-o-Y in May 2014 but were considerable better than the segment reporting from all across OEMs.

SSWL is expecting to outperform the sector as product portfolio broadening exercise will result is better days to come despite sluggish growth in CV segment. The New govt. will fasten the infrastructure development to boost domestic growth and that will further improve the CV segment resulting in better sales for SSWL.