According to reports from Value Research Stock Advisor, Wheels India and Steel Strips Wheels (SSWL) generated remarkably similar revenues of over ₹5,100 crore in FY26. However, their profitability tells a different story - SSWL earned a net profit of ₹202 crore while Wheels India managed only ₹139 crore. Despite SSWL's higher absolute profit, Wheels India demonstrated superior growth momentum with 17.2% annual profit growth over four years compared to SSWL's nearly flat performance.
As reported by Value Research Stock Advisor, the companies followed distinct investment strategies that explain their contrasting performance. SSWL maintained focus on wheels while gradually shifting towards higher-value products like alloy wheels and aluminium knuckles, with EBITDA per wheel rising from ₹262 in June 2025 to ₹314 a year later, representing a 20% improvement. Wheels India diversified into hydraulic cylinders, windmill components, and air suspension systems, transforming into a diversified engineering company rather than a pure wheel maker.
According to Value Research Stock Advisor, the companies' operational margins reflect their strategic choices. SSWL maintained a 10.1% operating margin in FY26 compared to Wheels India's 7.9% margin. However, Wheels India's incremental profitability proved superior - every additional ₹100 of revenue generated approximately ₹10 of extra operating profit between FY22 and FY26, while SSWL achieved only about ₹3.50 per ₹100 of additional revenue. This difference explains why Wheels India's profit growth outpaced SSWL despite lower margins.
As reported by Value Research Stock Advisor, Wheels India's diversification strategy has shown mixed results. The automotive wheels division grew operating profit by 23% in FY26, while newer industrial businesses contributed only 15% of growth. The newer ventures consume significant resources - they contributed just 17% of segment revenue but absorbed 58% of capital spending and tied up 38% of capital employed. These newer businesses achieved a 6.2% return on capital compared to nearly 26% for the automotive business.
According to Value Research Stock Advisor, both companies face significant capital expenditure commitments. SSWL plans to invest approximately ₹600 crore in FY27, primarily for a new alloy-wheel and knuckle plant at Bhuj, against FY26 operating profit of ₹523 crore. Wheels India plans ₹400-450 crore in investments, with the company left with only ₹83 crore of spare cash after funding existing investments last year. Both companies' debt positions appear more challenging than reported figures suggest, with Wheels India's debt rising from 1.68 times operating profit to 2.89 times when including short-term borrowing for operations.
