Steel Strip Wheels slips after weak sales in June

Steel Strip Wheels (SSWL) fell 1.01% to Rs 434.15 after the company's total wheel rim sales tumbled 43% to 6.46 lakh units in June 2020 over June 2019.

SSWL has achieved gross turnover of Rs 97.59 crore in June 2020 compared with 168.34 crore in June 2019, there by recording a de-growth of 42%. It achieved net turnover of Rs 82.76 crore in June 2020 compared with Rs 139.54 crore in June 2019, recording a de-growth of 41%.

Tractor volumes rose by 45% in June 2020 YoY. Tractor segment is operating at 100% utilization for June 2020 and is expected to run at 100% plus capacity utilization for coming 4 months.

Exports segment volume fell by 1% YoY in June 2020. Export segment has reached to pre-COVID levels and the firm expects to see sustained improvement in this segment of business.

Passenger car segment volumes fell 38% in June 2020 YoY. Two & three wheelers segment slumped 91%. Commercial vehicles (Truck) segment volumes fell by 78% YoY in June 2020.

The passenger car segment is expected to improve substantially in July and will see sustained improvement going into Q2 September 2020. The 2-3 wheeler segment fell sharply on the back of clearance of old inventory and this will start reflecting in volume improvement from August onwards. The truck segment continued with pre-Covid levels of production cuts and faced COVID-related disruption in June. July onwards the rate of decline will improve with production forecast improving going ahead.

SSWL's standalone net profit slumped 68% to Rs 6.29 crore on a 28.8% decline in net sales to Rs 343.60 crore in Q3 December 2019 over Q3 December 2018. The company is yet to announce its Q4 March 2020 results.

SSWL is engaged in the manufacturing of steel wheel rims catering to different segments of automobile industry. The firm operates in automotive wheels segment. Its geographical segments include India and overseas.

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