Steel Strips Wheels Limited has received rating affirmation from India Ratings and Research (Ind-Ra) for its bank loan facilities, with the rating agency maintaining its IND AA-/Stable outlook while assigning ratings to additional credit limits. The development reflects the company's strong operational performance and market positioning in the automotive components sector.

Rating Details and Actions

India Ratings has taken the following rating actions on Steel Strips Wheels' bank loan facilities:

The rating agency noted that the affirmation reflects SSWL's strong market position as an alloy and steel wheel rim manufacturer, sustained improvement in revenue, and resilient operating profitability with rangebound EBITDA margins. Additionally, there is an increased share of higher-margin business from alloy wheels in the overall revenue mix.

Financial Performance and Growth Trajectory

Steel Strips Wheels demonstrated robust financial performance with revenue growing 16.1% year-on-year to INR 37,082 million in 9MFY26, compared to INR 44,290 million in FY25 and INR 43,571 million in FY24. The growth was driven by increased alloy wheel sales, recovery in demand across domestic auto segments following the implementation of Goods and Services Tax 2.0 in September 2025, and the company's ability to add new customers while increasing business share with existing clients.

India Ratings expects revenue to increase 5%-7% year-on-year in FY26 due to the ramping up of alloy wheel segment capacity to 5 million units in FY26 from 4.2 million units in FY25, and knuckle capacity expansion to 0.5 million from 0.25 million units.

Market Position and Operational Strengths

Steel Strips Wheels maintains a strong market position across multiple automotive segments. The company holds significant market shares including 34% in passenger vehicles, 52% in medium and heavy commercial vehicles, 42% in tractors, 35% in off-the-road segment, and 39% in two- and three-wheelers for steel wheel rims.

The company operates with a total installed capacity of 5 million units as of 1HFY26, up from 4.2 million units in FY25, and operated at approximately 80% capacity utilization in FY25. The revenue contribution from higher-margin alloy wheel rims increased to 36% in 1HFY26 from 32% in FY25 and 28% in FY24.

Credit Metrics and Financial Position

Despite stable EBITDA levels at INR 3,604 million in 9MFY26 compared to INR 4,843 million in FY25, the company's adjusted net leverage deteriorated to 3.2x as of 9MFY26 from 2.8x in FY25, primarily due to increased debt for capacity expansion in alloy wheels and aluminum knuckles. The rating agency noted that credit metrics remained elevated with net adjusted leverage exceeding 2.5x over FY24-FY25 amid ongoing capital expenditure, and this is likely to remain above the same level over FY26-FY27.

Expansion Plans and Future Outlook

The company has ambitious expansion plans with incremental capacity additions planned at its Bhuj plant in Gujarat. The alloy capacity is expected to grow by 1.2 million units to be executed in two phases over FY27-FY28. Steel Strips Wheels plans to undertake incremental capital expenditure of approximately INR 4,300 million for alloy wheels and INR 1,400 million for knuckles at the Bhuj plant over FY26-FY27.

India Ratings expects FY27 revenue to exceed INR 50,000 million, supported by capacity expansions and the company's strong customer relationships with major automotive manufacturers including Hyundai Motor India, Mahindra & Mahindra, Tata Motors, and KIA Motors India.

Steel strips wheels Limited has announced a significant expansion move by entering into a tripartite agreement with Chinese technology partners for establishing a new alloy wheels manufacturing facility in Gujarat. The agreement was signed on February 13, 2026, marking a strategic step in the company's capacity expansion plans.

Agreement Partners and Structure

The tripartite agreement involves two Chinese entities registered under the laws of the People's Republic of China. The partnership brings together specialized expertise in alloy wheel manufacturing technology and equipment supply.

Facility Specifications and Investment

The new manufacturing facility will be established at Bhuj, Gujarat, focusing on alloy wheels production for the automotive sector. The project represents a substantial investment in modern manufacturing capabilities.

Scope of Collaboration

The agreement encompasses comprehensive support for establishing the manufacturing facility, including technology transfer and technical expertise. The Chinese partners will provide end-to-end solutions for the project implementation.

Key components of the collaboration include:

• Selection, supply, installation and commissioning of machinery and equipment
• Transfer of technical know-how and latest technologies
• Technical guidance for alloy wheel manufacturing processes
• Equipment procurement support from global manufacturers

Strategic Rationale

Arays brings significant expertise to the partnership as a well-established manufacturer in the alloy wheel manufacturing sector. The company operates complete facilities for alloy wheel production in China and maintains service relationships with global automobile factories and aftermarket segments. The partnership leverages Arays' cooperative relationships with equipment manufacturers worldwide and their experience in providing technical guidance and equipment procurement services.

This collaboration aligns with Steel Strips Wheels Limited's current capacity expansion strategy, enabling the company to enhance its manufacturing capabilities in the competitive automotive components market. The facility will contribute to meeting growing demand for alloy wheels in both domestic and international markets.