Steel Strips Wheels Ltd. (NSE: SSWL) Q3 2025 Earnings Call dated Jan. 20, 2025
Corporate Participants:
Mohan Joshi — Deputy Managing Director
Naveen Sorot — Chief Financial Officer
Pranav Jain — Deputy General Manager, Finance
Analysts:
Mumuksh Mandlesha — Analyst
Aditya Khetan — Analyst
Amit Hiranandani — Analyst
Yash Nerurkar — Analyst
Sarvesh Gupta — Analyst
Chirag Shah — Analyst
Abhishek — Analyst
Presentation:
Operator
[Starts Abruptly] Eshare and Stockbrokers Ltd. As a reminder, all participant lines will remain in the listen only mode. And there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal the operator by pressing Star then zero on your touchstone telephone. Please note that this conference is being recorded.
I now hand the conference over to Mr. Mumkesh Mangesha from Anandrati Share and Stock Brokers Limited. Thank you. And over to you, sir.
Mumuksh Mandlesha — Analyst
Thank you, Ryan. Good afternoon to everyone on this call. On behalf of Anandrati shares and stockbrokers, I welcome you all to the Q3FY25 earnings conference. Call of Sales Trip Wills Limited. We are pleased to host the senior management of the company. Today we have with us Mr. Mohan Joshi, Deputy Managing Director. Mr. Naveen Sorat, Chief Financial Officer and Mr. Pranav Jain, Deputy General Manager, Finance. We’ll start the call with the initial commentary from the management. And then we’ll open the floor for the Q and A.
Now I hand over the call to Mohan sir. Over to you, sir. Thank you.
Mohan Joshi — Deputy Managing Director
Thank you. Good evening everyone. Hope everyone is doing well. I hope everyone everyone had an opportunity to go through the financial results and investor presentation which we have uploaded on the stock exchange and on our company website. Over the past nine months, our revenue reached Rupees 3195 crores compared to 3 to double 8 crores during the same period last year.
EBITDA for nine months FY25 stood at 352 crores. Slightly lower than Rupees 354 crores in the previous year. EBITDA margin for the quarter improved to 11% up from 10.5% last year driven by the company’s cost optimization effort. Profit after tax to Rs.148 crores down from rupees159 crores in the corresponding period last year. The primary reason for this variance is the full favorable impact of the transition to the new tax regime which was realized in Q3 of the previous year.
The depreciation for 9 months FY25 increased from 67.4 crores to 75.4 crores on a standalone basis. Primarily due to higher capital expenditures for the extension of capacity in alloy wheels over the past few years. For the full year, FY25 deprecation cost would be around rupees 100cr in nine months FY25, the alloy wheel segment in passenger car has performed strongly compared to the relatively flat. Performance of the steel wheels but two and the three wheeler industry has also shown positive results during this period with growth observed both in volume and value. We anticipate further growth in this segment in the next quarter.
On the other hand, the CV segment experienced a decline this quarter compared to the same period last year primarily due to lower demand. However, we remain optimistic about its recovery. Driven by increased government spending on infrastructure and mining projects, our tractor business has achieved high sales growth during the first nine months of the year with substantial increase in both domestic sales and export. This success is reflected in strong performance across both volume and value metrics.
Looking ahead, we anticipate continued growth in our tractor segment with significant potential to further expand our market share in this category over time. Export volumes have gradually begun to recover since December. However, performance for the quarter was impacted by supply chain disruptions, ongoing conflicts in the Middle east and Europe and election in the U.S. which is our largest export market. Despite these challenges, we remain optimistic about the demand revival in the coming quarter.
For this financial year, we project export revenue to reach approximately rupees 550 to 600cr driven by pickup in demand in the fourth quarter. As of nine months, FY25 revenue from exports stands at rupees 404 crores with an expected increase in the next quarter. Due to improving geopolitical conditions, Our new aluminum nickel segment commenced commercial commercialization this quarter with an initial capacity of 2.5 lakh units per annum. This capacity is set to increase to 5 lakh unit in the fourth quarter, enabling us to cater to our existing customers including the two OEMs with whom we have established agreements as well as attract new customers.
Looking ahead, our global Our goal is to fully launch this business line FY26 and expand our customer base by bringing major OEM into this segment. We at SSWL remain fully focused on the journey ahead, dedicated to seizing opportunities to foster innovation, enhance customer relationships and strengthen our market leadership. With the industry ongoing advancement, we anticipate our performance will continue to align and grow in the step in step with these developments.
With this, we now open the floor for question and answers. Thank you,
Questions and Answers:
Operator
Thank you ladies and gentlemen. We will now begin the question and answer session. Anyone who wishes to ask a question may press STAR and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press STAR and two participants are requested to use Their handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Aditya Ketan from Smith Institutional Equities. Please go ahead.
Aditya Khetan
Yeah, thank you sir for the opportunity. So my first question is onto the export target which we have Revised downwards to 550 to 600 crores. So this 550 crore at the lower band of our guidance is that achievable? Because I think for nine months we have done around 400 crore. So adding another 120, 130 crore would still be lower than our estimated guidance. So just wanted to know how things will be there for Q4.
Mohan Joshi
We guided for around 600 crores on the raw material base of the last year. I think on the steel side close to 15, 17% of the correction of steel has already happened. And in the balance three months we are anticipating 150, 160 crores kind of export order which is visible right now. The order book is close to 170, 580 crores. But because of the model mix that we are trying to see I think 155 to 160 crores will be doable. 660, 560 crores is going to be on the reduced raw material which is where we are at this pace.
I think the Q4 is going to be the strongest quarter for exports. Given that there is a transformation thing which is happening in the U.S. i think today is the ceremony and we believe that very harsh measures on taxation can come on to various countries where they are trying to import material and India can skip a lot of this salvage. And I believe that going into the last next year it is going to be favorable from an export point of view and from a product as well as a customer point of view
And alloy wheel. I think we are going to be sporting the highest number in this financial year and that is going to be the north star for us where OEM businesses are going to be starting for alloy in the next financial year. And we have a hope of, you know, improving that number of current year performance of alloy volumes by 35 to 40% in exponential year.
Aditya Khetan
Okay sir, into our exports mix when we look. So the EU exports have gone up much so that have like. So that has fared better as compared to us in terms of the total exports mix that is around 32% versus the last four year average of 20, 25%. Anything sir, which has changed into the European market as compared to the US markets.
Mohan Joshi
The US market was acceptable during the election period. As stated that while the discussions of elections are going on, people were of the opinion that you do not know what kind of margin and who will win and what kind of margin it will win. So a lot of People kept their purchases on hold and reduce their inventories as soon as the results started coming in and the Trump started happening. A lot of lobbying factors that people are aware about, the actions started their act in terms of procurement.
And that is why I believe that the Q4 is very strong. Given that there are hints maybe in the American side of the business that yes, there is going to be very strong actions that are going to be done towards China and the relative related countries where they have the FTA and India is out of that. So a lot of people will shift their purchases from China to India to the extent that they can change to avoid those taxes. And going forward US is going to be a strong partner in terms of exports. I believe that larger share of the exports will come, continue to come from US And Europe will improve from an alloy wheel point of view and some of the PV point of view, but US is going to be larger in terms of the overall context.
Aditya Khetan
Okay, so there is no particular reason why the EU mix has gone up like
Mohan Joshi
So, you know these are things which is the US fell down because the inventory correction started happening because of Trump. So maybe this is the reason that US Europe remains there and US fell down and that’s why European share has gone up. Right. I believe that for the full year when we see the situation, I think US will catch up.
Aditya Khetan
Got it, sorry. Into our new alloy wheel expansion. So what is the internal ROC target and at what utilization level the facility will become the breakeven?
Mohan Joshi
See the expansion of loyal is already going on and I believe that by this financial end we are going to be finishing at close to 4.2 million where capacity utilization is going to be around a 3.6 to 3.7 to 3.8 million run rate. And we believe that this expansion is going to be finishing up to reach 4.85 million in another five, six, seven months in the next financial year. And that capacity also has a potential to be utilized to the tune of one second.
Aditya Khetan
And so what will be our internal
Mohan Joshi
Rough 90% utilization will be done in next financial year also on the expanded capacity.
Aditya Khetan
Okay, and sir, what would be our internal IRR target for this?
Mohan Joshi
See these are all brownfield projects. Obviously these are going to be very aggressive in terms of the ROCs. And I believe that 25% for the brownfields. So from, for the brownfield project, I think 25% is where we are trying to buy and it is, it is fairly possible.
Aditya Khetan
So my next question is on to the aluminium.
Mohan Joshi
And the good thing is that as soon as this capacity comes in, it is going to start earning and break evening breakeven will start achieving with a very, very good margins.
Aditya Khetan
Got it, sir. Good. So my next question is on to the so knuckles business. So what is the estimated margin? Bucket size we are catering into this segment and onto our plan of 10 lakh units which we are targeting how much top line we can achieve at peak utilization levels and what, and what sort of margins we are targeting on that.
Mohan Joshi
I think I have reiterated earlier also that the margin profile will be visible in terms of actual utilization of 65% plus which is visible in the month of January onwards and the first capacity which we are trying to put up in two phases is close to 0.5 million so 0.4 5.46 million to be precise and that will be doubled up given that the signal from the customer is going to be getting it in the month of January or February.
So first phase I think ROC is going to be more than 20, 22 23% and the breakeven level is at close to 55 60% and the margin profile as I said we’ll be able to give you a clearer picture in Q4 and capacity is completely sold out by the month of May, June and Capex actions on this net project will start in maybe one or two months based on indication from the customer.
As you asked the first question we believe that over next five years this industry has a potential to grow to a size of thousand crore plus based on relative importance of 15% kind of a penetration. This is just like alloy wheel where we were at 5% maybe 15 years back, 10 years back and today we are at 40% with a larger base of production so European side is close to 75 to 80% on the knuckles, aluminum knuckles and we are anticipating this industry moving which is moving into towards EV to be at 15 to 20% bananas of filtration.
Aditya Khetan
So my last question is onto the alloy wheel side so last two years like we had witnessed that the volumes has been almost so stagnated at round in terms of volumes it is at around 1617% so just sir, I was, I wanted to know what was the industry growth of alloy wheels for the last two years so versus the steel wheels growth.
Mohan Joshi
So looking at a percentage of the total sales is not a right approach because you know steel growers that are partial pace has to be taken very separately from what alloy is doing right? So from an alloy industry point of view I’ll try to give you a figure just a minute please. So for financial year 20 to 23 the industry volumes were Per act close to 8.4 million. Okay, it was at 8.4 million. In 2324 we were at close to 9.26 million. So it was 10% kind of a growth
In 2324, sorry, 2425 till November, which is maybe eight months. We have already reached a number of close to 6.2 million and we’re running at a rate of 800,000 numbers. So 9.6, 9.7 million that we are going to be anticipating with a 5%, 6% kind of a growth on alloy side. And this is happening because of the product mix which is changing
And the alloy side. I fairly believe that with the change of vehicle configuration and the choice of people, this can attain a 8 to 10% kind of a growth in terms of volumes based on the volume growth of 5%, 6% kind of a number which is there for the industry and export anyways is an endless kind of a support which, I mean you can grow anything which, which is, which is there opportunities for everyone.
Aditya Khetan
Got it, sir. Thank you sir. That’s it for.
Operator
Thank you. The next question comes from the line of Amit from Philip Capital India Private Limited. Please go ahead.
Amit Hiranandani
Good evening and congratulations for the decent set of numbers. Sir, am I audible? Yeah. Amit, please go ahead. Yes sir. How do you see the impact on margins due to emergence of styled wheels going forward? And if you can highlight the penetration of style wheels last year versus currently.
Mohan Joshi
So I’ll answer the second part which is the penetration from the industry point of view. I think the steel wheel on the side wheel kind of a concept is better in margin but also better expand in terms of the process. And this industry is right now at 4% penetration, 3 to 4% kind of a penetration. And every customer is trying to get into this. So Maruti is the last one where we have been selected for the program as a single source. And Maruti was the last one which is large volume and was not into it and is trying his feet.
But can you say that this market can go to 25% immediately? Maybe not, because obviously the price is little expensive. The car wheel weight is also little heavier than the normal steel wheel because of the very high yield on the disc side. So this is 4% and maybe it can continue to grow little bit towards better single digitization Kind of a number in terms of its contribution and our margin profile, I think Marine can answer that question for the company’s margin profile going ahead.
Naveen Sorot
So Amit, if you look at we have already done I guess one of the best EBITDA per week number last quarter, I guess the number was more than 262 rupees per wheel. And as the mix is tilting more towards alloy because you know what is happening, the alloy wheel contribution, the overall mix is increasing. I guess last year we were hampered by the capacity that we are carrying on the loyalty side. But from this year onward even that constraint will no longer be there with us
And even these expanded capacities will be utilized quite fast. So the number will definitely now stabilize around 260 and probably move upwards. And if even if you look at in terms of percentages, EBITDA margins have improved corresponding to last year, I guess the overall number now is hovering at around 11.3% for nine nine months.
Amit Hiranandani
Understood. And because of this gradual increase in the style wheel and looking at the competition in the alloy side and pause in the passenger vehicle industry, how do you see domestic alloy wheels volume growth and realizations for this and next fiscal.
Naveen Sorot
So if you look at in terms of the numbers I guess we have done almost 24 lakhs alloy wheel till nine months. The number based on the kind of order book that we have for this Q4, I guess this will be one of the best quarters that we have in terms of the alloy wheel sales. And overall this number should be should be around 3.4 million which we are anticipating. And then based on the run rate that we see in Q4 I guess the next year even the extended capacity will be almost 75 to 80% utilized.
Amit Hiranandani
No, I’m just understanding from the industry prospects. So how do you see domestic alloy volume growth for the industry?
Mohan Joshi
I am anticipating low single digit growth in terms of the volumes for the passenger vehicle in this coming calendar year because of the inventory issues and because of various demand issues. From the liquidity point of view, I think what I am trying to anticipate is that alloy penetration will still continue to grow at 7 to 8%. We can outpace that kind of a growth given that there are seven new projects which are launching in this calendar year starting January where we are in close to five of them
And all are popular products in terms of BEVs to VW, Kylac to Mahindra platforms which are coming in and industry growth Moving towards a 50% kind of a number is what we are anticipating. We’re already at close to 37, 38% some of the months we have moved to 41 42% also in this financial year but this trajectory will continue to move towards 50%.
Amit Hiranandani
Yeah this is helpful sir. And sir, what would be the likely triggers for the you know improvement of EBITDA per unit in the next fiscal or we can say for the next two fiscal because presently CV industry is also soft and exports is little bit gradually is improving. So how do you see sir, what are the triggers for the EBITDA per unit improvement?
Naveen Sorot
So in our case Amit, if you look at yes CV has been down but based on the kind of order book that we have for Q4 I guess we may not see the kind of dip that we were expecting at the start of the year. I guess at the start we have given a number of almost 10 to 12% of downtick on our TV number but I guess we’ll be somewhere around half of that looking at the kind of numbers that we have.
Secondly I guess we have highlighted for sector growth to outpace the industry. That is what is happening and for the entire year we expect that number to be at least 20% higher than what we did last year and this year probably be the best year that we ever had in terms of texture wheel sales. Then we have CV volumes which are the alloy wheel volumes which are picking up for us and again as I mentioned that this quarter probably will be the best quarter that we had until now for the alloy wheel sales
And all these factors cumulatively will contribute towards improvement in the EBITDA per wheel number. So as I mentioned the 262 rupees that what we did in last quarter and we believe that 260 totally the new normal for us going forward.
Amit Hiranandani
Understood. And sir can you update on the knuckle casting business? Presently this has been started now so outlook on the revenues and on the broad margin for the next two fiscals and any new customer addition apart from the two we have.
Mohan Joshi
So what I feel is that 14 to 15 crores worth of revenue is going to be coming in because commercial production has started from November this slide and this month I think 60% of the volumes uptake is happening and the phase two will come into action for mass production by June, July 2025 where capacity will move from 30 from 17,000 to 40,000amonth which is also sold out by the time September is coming
And next financial year the run rate could be between 25 to 27,000 for the full year. In terms of the numbers into say 2,500 numbers is 80 crores is what we are trying to anticipate next year. The expansion of the capacity is fairly visible where customer insight is coming For the next plant to be in the vicinity of 2 million knuckles where the directions will come from customers from January end to maybe February mid.
So by the end will be clear in terms of what is the Capex side which is going to be dedicated for some of the customers that we have as said in the call earlier margin profile I’ll be in a better position to give you once this plant runs at 65 70% utilization to give you the fair idea. Is it okay?
Amit Hiranandani
Yeah, just. I’m just understanding that the revenue for November to March period would be around 15 crores you said is it correct?
Mohan Joshi
14 crore. 15 crores around about there
Amit Hiranandani
And for FY26 you’re estimating 80 crores revenue. Yeah, this is largely from the two customers we haven’t
Mohan Joshi
Next year which is 2627 I believe that that number is going to be minimum minimum close to 105 to 115 crores and capex cycle for this project is close to 9 to 11 months minimum and indications will be from February and maybe in February and we’ll try to get the indication.
Amit Hiranandani
So sir, for FY27 105 to 115 crore dividend do we have the efficient capacity or we need to increase it later on?
Mohan Joshi
So I think for that you have sufficient capacity that is not a problem. A problem is going to be more than that is just in case something goes right because what is happening right now that these models which we are trying to I are bev models which are born electric the problem which is coming in that customer are now asking some ice engine changeover from cast knuckle to aluminum knuckle
And that direction has already come to us during auto Expo in terms of capex the certification and the clarification of that will take maybe one month and once that in that is in place we are going to be aggressively moving towards the second phase of metals given the direction of the volume and 2 million workers of plant will come into action.
Amit Hiranandani
The last two question 1:1 is on the CAPEX if you can you know guide us for this and the next fiscal and where are we planning to spend if you can give a breakup on the same and my second question would be on the current long term and short term debt as of you know quarter to weekend and what is the repayment and prepayment schedule for the same
Mohan Joshi
I’ll talk about the Capex side in terms of the indicative numbers given that we have knuckles which is visible to us we have a loyal deal which is visible to US in terms of expansion of export as well as domestic capacities. So 150 to 160 crores will come into this financial year, which is 2526 and 2627 fourth year. 150 crores will be spent. All will be spent from internal accruals. No borrowings will be needed. I think Naveen can answer in terms of the debt trajectory as well as the interest rate trajectory, which Has further reduced in this quarter how it goes forward.
Naveen Sorot
So Amit, you’ll recall that we have been I guess consistently paying back our debts. In fact as and when we got opportunity we tried to prepay as well for this year as Mohan pointed out that we’ll be probably underspending. So I guess earlier at the start of the year we have quoted a figure of almost 200 crore plus in terms of capex. I guess the overall debt number looks on a softer side and fully can be mitigated from the accrual.
So there will be no newer additions on the debt side either on the working capital or term loan. And based on what kind of pillar that we receive from customer for the capex for next year I guess we’ll determine what kind of additional cash flows that we’ll have to look at any prepayment opportunities. But as and when we left those opportunities we will move ahead in terms of regular repayments. In any case the schedule is almost 100 to 110 odd crores within any cases schedule. So what we are looking for is any opportunity to pay anything over and above this 110 odd crores on a yearly basis.
Amit Hiranandani
Right. But with the current long term and short term debt that we can break up. Please.
Pranav Jain
The total Debt is around 962 cr out of which around 406.406cr is of the long term and balance is the short term debt.
Amit Hiranandani
Great, this is helpful. Thank you so much and all the best.
Operator
Thank you. The next question comes from the line of Yash Nerokar from Ionic Wealth. Please go ahead.
Yash Nerurkar
Yeah, hi, thanks for taking my question. So I mean I’m new to the company so you could just help me explain, you know what is the value proposition the company is getting into. Like what would be the key value triggers from a growth perspective And I mean if you could just help me understand the difference in the realization between the steel versus the alloy wheels.
Mohan Joshi
Value proposition is that it’s a company which is EV agnostic and I think we are present into the last end of the product without which the product cannot move out. We are also in multiple industry of the segment segment of the industry which is from PVs to two wheelers to CVs to tractors to OTRs to steel to alloy. So risk to the business is fairly very low in terms of the growth. These businesses are also in India as well as exports.
The biggest value proposition which I feel is going to be the underlying issue which are now coming into the European side to match the competitiveness of the Asian region. And I believe that there are multiple accidents which are waiting for happening in Europe in Manufacturing capability going bankrupt where three of the facilities are already in discussion with us to sell them out where we are not interested in them. Because I believe that running a plant in Europe is fairly not possible and these facilities will have a lot of trouble going forward. And these volumes are going to be coming towards the country where we believe that it is going to be EBITDA created for the organization.
In the other side, the migration from steel wheel which is legacy business to green side of the business which is loyal side has endless potential for the organization where global demand is at close to 350 million wheels. And we feel that over next five years we are going to be putting up this facility of 5 million to double the capacity to 10 million. In terms of loyals and Indian context as well as export context will help us filling up this capacity with EBITDA vision into the
The third side is the sunrise industry which is we are trying to talk about the steering knuckles where penetration is very low right now. But given that what is happening in US and Europe, these penetrations are fairly at a very elevated level in those countries and continents and we are at a nascent state where we have a very clear edge in terms of first mover advantage in terms of technically as well as commercially. And this has a potential to build a business of thousand crore plus over next three, four years.
And then obviously domestic side it’s a safety product so you need to prove yourself for 2, 3, 4 years so that it becomes a testimonial for exports and then export is fairly very, very large kind of an opportunity where we feel there is a large anticipation of futuristic volume. And then there are multiple other businesses that we keep on discussing with strategic partners and time to time those will be disclosed based on our success to convert them into a strategic partnership and deploying those revenues for the organization.
Yash Nerurkar
That’s very helpful, thank you so much. So I mean if I wanted to understand right now almost major part of their revenues are driven through the steel wheel. So if I take a say six to seven year view, I mean where exactly do you think this segment will be more margin accretive and how would your total, you know, volumes be shifted towards more of alloy or it would be more of steel that you’ll be doing.
And just a context, I mean another question in addition to that. So I mean if I typically look at all the vehicles and all the partners that you are aligned with, is it that the lower end vehicles have more of steering wheels and the more higher end vehicles have more of alloy beams? Is my understanding semi correct.
Mohan Joshi
Currently alloy contribution is around 32% right? And it will shift to around 40% in Coming four to five years. Right. And balance is from the steel wheel.
Yash Nerurkar
Right. So in just in terms of which vehicles use which fields and how that preference changes are and what sort of contribution do you have from the aftermarket? If you can just help me with that number.
Pranav Jain
We don’t have any aftermarket right now. All the domestic sale is to the OEM sale.
Yash Nerurkar
Okay. Okay. That’s helpful. Thank you. Thank you so much.
Operator
Thank you. Ladies and gentlemen, if you wish to ask a question, please press star and 1. The next question comes from the line of service. Gupta from Maximal Capital, please go ahead.
Sarvesh Gupta
Just to finish on aluminum nickel. So what is the realization per unit?
Mohan Joshi
Can you. Can you please.
Sarvesh Gupta
Yeah. The realization per unit of aluminum nickel, how much is that? Approximately
Pranav Jain
Around 2500 to 2600 per knuckle.
Sarvesh Gupta
Okay. So it’s not very different from the current. It’s higher than steel but lower than alloys.
Mohan Joshi
Yes, because it’s. It’s rate is lower than the aloe
Sarvesh Gupta
Under. And the other thing is, you know when I’m looking at your export realizations, they are not very different from your domestic realizations. So how come their margins are much superior?
Mohan Joshi
They are definitely better than the domestic realization. No doubt about it. I think you are talking about the wheel numbers. I think wheel size is also very important. So wheels are lighter and better in price. Right?
Sarvesh Gupta
Okay. Okay, understood. And now coming to this the way I understand. So you are guiding for. So do you have any growth target in mind as far as loyal yields are concerned? For FY26
Mohan Joshi
I think what they want to do. 3.3 million this year. 3.4. 3.4 million this year. I think Naveen is riding. I think last year. This year Naveen will try to answer that question.
Naveen Sorot
So if you look at the number that we did in nine months, I guess we are already at 2.4 million sales. And this number was holding it around 3 million last year. And for the entire year we are expecting this number to be closer to 3.3 to 3.4 million mill rups. And as we speak, we already are on our way to expand our capacities. 4.2 million which is already in place. This capacity will get further enhanced to 4.8 million sometime around September, October.
There is some debottle exercise that we are also doing which probably will raise it further to 5.3 million. So that probably will give us an opportunity to cater to a booming export market as well. And as you’ll recall, I guess we are just doing entry with Maruti. There is a transition which is happening within Maruti as well where there is a shift movement from steel wheel to alloy wheel. And we have just given the entry with Maruti and that further opens up the market for us.
Sarvesh Gupta
Okay, and this NCLT capacity of 7 million, that is mostly steel.
Pranav Jain
Yes, yes, that is mostly steel. Totally steel capacity.
Sarvesh Gupta
So how PV and tractor, but how quickly can we sell that capacity?
Mohan Joshi
So I think that is not the intent of selling the capacity. I think I have clarified that the capacity expansion in our Jamishedpur plant is going on from 150, 160,000 numbers to close to 200,000 numbers. They’re going to be adding close to 40,000 of capacity. And this will add close to 100 basis point to the margin profile of that plant towards the company in terms of economies of scale. And that is already underway right now.
And by March 2025 that exercise is going to be over where entire equipment, less maybe 25% of the equipment will come new and 75% of the equipment will be moved from this plant to that plant. The other capacity that we are trying to move is on the tractor side where we are moving our capacities from 70,000amonth tractor to 100,000amonth. So that also is happening. Close to 90% of the equipment are moving from this facility to that facility.
And all these investments are happening at a turn of close to 10x to 15x. And they will try to give a margin flip for each of the plant to the tune of 100 basis point going into next financial year. And once we are done with that, the expansion on the steel side, either it is an A W or either it is in any of the plant will be done by the equipment that are already in hand.
Sarvesh Gupta
Understood? Understood. Finally, on the data per wheel, now we have been hovering down that 250 mark for a very long time. And the reason is primarily if I look at your export data over the last three, four years, checkered at best. So there is no trend or strong trend of growth that we can see in your exports. So it seems that unless we fix that trajectory and get into a, you know, compounding sort of a growth year on year, every year. So what is missing there and how can we fix that?
Is it because we have not yet established our value proposition fully with the export market till now or is it like, I mean what is the reason why the performance on the exports market is very checkered and that is why our EBITDA per deal also has been sort of stayed where it has after a good growth in the previous years.
Pranav Jain
Yeah, EBITDA per wheel in the current quarter has increased. If you see the EBITDA per wheel is around 262 per wheel and this will be increasing going forward in the coming quarter as well as our exports and alloy wheel business is doing well.
Mohan Joshi
The trajectory of this 240 to 250 was quite stable and now it has come to a different level of 260 plus which Pranav is trying to indicate. And trajectory that we are trying to elaborate going forward into the next financial year is towards 27075 with the improving product range from knuckles to aluminum wheels to exports. So I believe that next financial year if everything goes right and Trump does not cause large dislocation of the things I believe export is going to be doing very, very good given the history of Trump with India and alloy is going to hit the highest number in next financial year as well.
Nakar is going to hit financial year end and some bit of disturbance of EBITDA in this financial year because of the CV segment and the pv total volumes on the field side being lower will also try to improve its next financial year. So next year also I think required amount of EBITDA accretion will happen and we are fairly confident that as Naveen stated of 260 as a base we are trying to work towards a higher number in next financial year.
Sarvesh Gupta
So that is well understood. But just on the export side since we have been having pluses and minuses. So my question was that our value proposition towards our export customer is that do we have a strong sort of an edge over other players when we do exports or not? Tariff is one thing. Of course tariffs can play positively for us. But exop tariffs, do we have some competitive edge which will you know because as you said export is a massive market but you know, how can we consistently sort of grow that business? What are the competitive edge that we have versus our other countries or other competition?
Mohan Joshi
I think competitive edge is engineering that is first and second is the landed price to the customer at the same quality. I think Europeans and American manufacturing cannot compete with us at all. There is zero chance that they can compete irrespective. Of the tariffs. The tariff does not give you an advantage to a country like India that the customer will pay you 20% extra. No, that is not the truth. The truth is that the other customer will be barred into country. But you are not in a position to increase your prices by 20% because then you are going to be opening the gate for European manufacturers for entry into the business.
So when we are at 600 crores obviously we have sort of stabilized with our plants, stabilized with our quality and stabilized with the deliveries. I think the European side and the American side is clearly going through a turmoil in terms of their automotive. I think that continents are down anywhere between 13 to 25% based on country to country and there are certain countries which are down 25 to 30% because of inflation because of various factors that we have spoken.
And I am certainly very optimistic in terms of volumetric growth because raw material prices keep on changing and this trajectory has no way to go down irrespective of the situation which are facing. And it is going towards that thousand crore mark over next 34 years that I’m fairly very very confident about. By the way of existing customers, existing product lines and expansion into aluminum wheels and other OTR and AG segment wheels where we have already made the development and mark production to start in exponential years.
Sarvesh Gupta
Understood sir. Thank you and all the best.
Operator
Thank you. The next question comes from the line of Chirag Shah from White Pine Investment Management Private Limited. Please go ahead.
Chirag Shah
Yeah, hi. Thanks for the opportunity. My first question is with respect to the delays that if you can just give us a summary of delays in terms of execution of some of the export orders because in the by this time the export revenue should have been started taking an alive investment given some of the orders that were announced earlier. So what has happened?
Mohan Joshi
Please start a little bit in the question. I think we skipped you out.
Chirag Shah
Hello. I hope I’m audible. So I wanted to understand the delays in export business or because we had at the end of Q4F24 or end we were expecting a significant ramp up in exports. Q In fact even earlier because of the export order wins that we had. But it appears they are not really materialized the way you are hoping it to materialize. So just a rewind of what are the delays that have happened in the export orders for us in terms of OEM or the end customer not picking up their commitment in that sense
Mohan Joshi
I think last year starting itself we started this number of 600 crores in terms of the top line that we anticipate given the global scenario which is there in terms of the recessionary fear In Europe and US we are going to be ending up at 550 560, 570. Somewhere there, in terms of the numbers, which is at our raw material Which is close to 17, 18% lower than last year which is where the steel prices have dropped by close to 1015 rupees across the board. And we are at the lowest point in past four years of steel.
So that impact has also come in in terms of the eventual price. I think on the volume side we are certainly doing good. As I said there are segments where we are going to report record numbers which is like alloy wheels. We are going to have the highest exports and the trajectory has the potential to grow 40 to 50% next year. Also with the order book which is already formed this year, I believe that we are going to be. How much we did last year? 200,000 numbers last year. I think 40% kind of a number can be coming in this financial year also in terms of the growth
And there is a little bit of slowdown which happened because of the Trump tantrum where people were not clear what to do. And now Trump is in action in terms of the bidding margin and they are fairly clear in terms of the status quo that he’s going to write today. 20 executive orders are expected as shared by the customer with us. So I believe that everybody is very clear that India is going to be slipping out of it and China is definitely going to be coming into it. And the actions will pronounce very large shift once these orders are clear tonight
And maybe over one month clearer picture will come in. Given that what happened in Trump 1 era with our business. I am certainly very confident that India as a country will grow very, very aggressively in exports towards America. Even the tariffs are visible coming towards India, towards China and all.
Chirag Shah
Okay, second is on the OTR yield. You were saving US and EU and you any clarity on that? Because you are expecting that there will be some clarity on how you want to look at this part of the business. This was also you set up a separate line for that. You know that was what did indicated the end F24. Just taking an update. Is there anything happening on OTR?
Mohan Joshi
So OTR and AG both segments on the export side we are I think this year the AG segment of domestic side will again report a record revenue. Not revenue record volume revenue cannot come because the raw metal prices changes here and there. But volumes are going to record in terms of the company’s history. I think export side there are 17 SKUs where we have been selected and development is underway where mass production of some of them have started in this year. Next year more products are going to be coming on export side.
Recently we have been nominated by some of the Korean as Well as European OEMs for supplies in terms of the design as well as development as well as supply for agriculture deal which is going to be coming in phases from next 19 year onwards. So this is a focus area where volumes are not very large in terms of the way that it happens in pv, but they are fairly Large in terms of value as well as EBITDA position and this is a focus area which going to be adding relatively good value in financial 2526 and onwards going ahead
Chirag Shah
And on the knuckle side S26 what kind of visibility we have on revenue as of date.
Mohan Joshi
So as I said in the financial year this is the mark question that started from November and in this current year I believe I mean I shared 14 to 15 crores worth of revenue Next year it is going to be 180 crores for financial at 2526 next to next year on the same capacity without expansion if expansion happens obviously the turnover will change but without expansion 105 to 115 crores is visible with double digit margin Margin clarity will be coming in Q4 when the capacities are running at close to 65% utilization
And the CAPEX guidance is expected from the customer for a 2 million plant by February mid let’s say anticipate February end and 2 million work of StateX will trigger which will take 11 months to 12 months in terms of execution and then mass applies. There are seven RFQs which are getting discussed which are electric platform as well as ICE platform where steel knuckle to aluminum nickel migration is happening and we are going to be the highest gainer from this
Chirag Shah
S26 you are looking at 100 to 115 crore of revenue
Mohan Joshi
FY26 27 is 7100 okay 80. 80 cross
Chirag Shah
7080 cross F20 okay okay and last thing is this per wheel big the number because we somebody asked a question earlier also this 260 plus minus range is what we have. We are there since last quite a few quarters. Is it right that unless alloy wheel ramp up happens this EBITDA for yields will stay in this range and incrementally alloy yield or maybe OTR will ramp up.
Mohan Joshi
Can you please put up the question once again
Chirag Shah
I am saying the EBITDA for wheel number is around 250,260 rupees on quarterly basis. If I look at we had touched this number even earlier to 60 then we went down to 240. Now we are going back to 260 okay increment further increase from this 260 range will be driven only by alloy deals and maybe a higher value.
Mohan Joshi
One of your contributor export is another contributor and overall better pricing and various initiatives that we have already discussed in previous calls are underway as Naveen has said that 260 is a base case that we are trying to go forward with and trajectory looks like that over next Two years we are going to be at 275 to 280 is what the intent is. With all exports, all alloy, all knuckles coming into action in 26, 27. We believe that this EBITDA per wheel can and has definite potential to grow by 10%. And volume growth is obviously additional.
Chirag Shah
Yeah, but this assumed a 5, 6% kind of a volume growth. Because also has to clear out for you, right? If there cannot be an opportunity
Mohan Joshi
You know, ex Trump factor. We do not know what is the impact because it is going to be disastrous. In terms of the upside. We have seen that in past that suddenly the Korean businesses and the Chinese business and the Thailand business all good or shut down and everything gets dumped to India. But given that what is visible in front of us, I think 5 to 7% volume growth is steadily.
Chirag Shah
And lastly, there was some pressure coming from Thailand, Vietnam in the export market. Via Chinese guy. They were kind of dumping over there. So is the pressure have the pressure reduced, which was also affecting your export business. In that
Mohan Joshi
I think Williams have also become smarter and they are taking corrective actions. Because I believe that Europe side there are no pressure. But from America there’s clearly very aggressive pressure of behaving and making rules of not taking uptake from people who are breaking rules. Else all these guys who are importing from them will have serious consequences which we are hearing from all our customers.
Chirag Shah
Okay, okay, great. Thank you very much.
Operator
Thank you. The next question comes from the line of Abhishek, an individual investor. Please go ahead.
Abhishek
Hi sir. Thank you for the opportunity. I had a simple question about who is like real competition in this space in India. Because I see Your slide number 17 where you are giving where there are 100% contribution in certain cars at certain point in time, it is contribution. So who is filling that 50% contribution according to you?
Mohan Joshi
Can you for this is for which segment you are trying for.
Abhishek
So for example, Tata Motors, Your share is 50% for Tiger, 50% share in Ultros
Mohan Joshi
Depends on steering alloy. So in Alloy we have Maxion, which is there, which is the second best. We are number one. And in Hyundai we are close to 75, 80% and balances sometimes Rockman, sometimes Maxion, sometimes mind. In Maruti we are not there. And that offering is going to be the durability testing. And everything is already done. We are anticipating the mass production starting from this financial year end or maybe in the month of April or so. Given that, what is the process of Japan At Maruti, in Mahindra, we are at close to 75 odd percent, I think. 75. Up to 80% balance. Little bit is with Minda and little bit is with the masculine.
Abhishek
Okay
Mohan Joshi
So at an industry level we are at close to 34 to 35%. Minda is another 34 to 35% and balance every four or five players are 30% and there is, there is a financial risk, there is a, you know, business risk to two of the players in the country where they are, the customers are making arrangements to ship their share of business to us where discussions are already on and those consequences will be seen in financial year 2526 to trigger extra volumes for us. [Ends Abruptly]