Steel Strips Wheels wants to increase the Ebitda margin to 15%, says Md
Steel Strips Wheels, a leading wheel manufacturer, is aiming for an EBITDA margin of over 15 percent and sales of up to 3,000 billion rupees for the next year.
Dheeraj Garg, MD of Steel Strips Wheels, said Tuesday the company expects 19 percent of alloy wheel sales this year, with a goal of increasing that number to 26 percent next year.
“For this year we will have the highest EBITDA margins at the end of March 2021 of around 13 percent. Next year we are aiming for an EBITDA margin of almost 15 percent. Next year we are aiming for a sales target of 2,600 to 3,000 billion said in an interview with CNBC-TV18.
He also said they will increase the capacity of 5 million bikes over the next year. “The capacity utilization in the factories is currently almost 100% in most of our verticals without CV and that will also come back. So in the future, we should expect close to 20 million bikes by the next year, and that is almost the current capacity of the plant. But in the next financial year we will add around 5 million more wheels in the light alloy wheel sector, in the steel wheel sector, especially for the export markets. So, the export drivers, the growth of light alloy wheels will determine our increase in capacity utilization over the next year, ”he said.
Garg said loan debt is currently around Rs 500 billion and around Rs 275 in working capital. However, he expects that an EBITDA of more than Rs 400 billion in the next year would pay off the debt and also help with the expansion of capacities.
He said the company will be able to reduce the commitment to 16 percent by the end of this calendar year. “The commitment is slowly decreasing every month. Every month we try to reduce shipments by at least 300,000 shares. I think by the end of this calendar year we should be reduced to less than 16 percent of today’s level, ”he said.
He also said they want to develop a very robust dividend policy and will pay a dividend next year as most of the investments are in.
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(Edited by : Yashi Gupta)