Steel Strips Wheels Poised For Rerating: SEBI RA Front Wave Research Sees Over 40% Upside By Year End

Steel Strips Wheels is trading at a low valuation compared to its growth potential.

According to SEBI-registered research firm Front Wave Research, there is room for re-rating as the company ramps up capacity and transitions toward high-margin products.

Front Wave said it values Steel Strips Wheels at 10x FY27E EV/EBITDA, implying a target price of ₹396 to be achieved by December end. 

Growth will be led by increased production of alloy wheels and aluminium knuckles, which are components offering higher margins than traditional steel wheels. 

Knuckle capacity begins in FY25, following organic expansion and the AMW Autocomponent acquisition. As alloy and knuckle mix rises, Front Wave projects core profit margins to climb from 10.94% in FY25 to 12.26% in FY27E. 

Segment dominance remains strong, with the company holding 54% market share in MHCVs and over 35% in other categories.

Export revenues are also expected to triple by FY27 to ₹1,000 crore, aided by U.S. tariffs on rivals in Vietnam and Thailand, as well as market openings from troubled European peers. 

Steel Strips Wheels’ U.S. export share has stayed strong, averaging over 64% since FY22.

Front Wave noted that aluminium knuckles, with weight savings of up to 25 kg, are gaining traction due to India’s stricter corporate average fuel economy (CAFE fuel efficiency norms. 

While penetration is only 15% in India compared to 70–80% globally, Front Wave expects accelerated adoption as OEMs move toward lighter materials.

The stock has risen 32.5% so far in 2025.

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