Steel Strips: Mehsana plant order book gives five year visibility

Automotive wheel rim manufacturer Steel Strips Wheels Limited (SSWL) released a press note focussing on its strengthened fundamentals and outlook estimates on long-term prospects for its Mehsana plant.

The company has a total of four plants situated in Punjab, Chennai, Jamshedpur and Mehsana which is in Gujarat. It entered into an agreement with Kalink Co. Limited, a South Korea based company, for its entry into the alloy wheel manufacturing augment in Mehsana. The stated plant was estimated to have a production capacity ranging from 1.5 million (painting capacity 2.5 million). An approximately Rs 380 crore investment was estimated for the project.

The company informed that it has now secured orders worth Rs 4,000 crore for this Mehsana project alone. Based on its four-year life since the agreement, the size of the order book makes it a significant value-addition to the company. Further, this order book gives visibility of years spanning to FY24-25. With a total capacity of nearly 3 million wheels, the company looks at the volume growth as its way ahead to meet the plant's commitment in FY21.

The stock was trading at Rs 435 on BSE on Friday, nearly 47 per cent down from its 52-week high exactly one year ago.