Multibagger Smallcap Stock Announces Major Capex at Chhatrapati Sambhajinagar; Net Profit More Than Triples, Shares Jump 16% to Hit Fresh 52-Week High

Steel Strips Wheels (SSWL) shares were buzzing on the bourses on Friday, October 23, 2026, rallying nearly 16 per cent after the company announced its Q2 FY27 earnings and granted in-principle approval for a greenfield manufacturing facility. The stock also touched a fresh 52-week high during the trading session. On a year-to-date (YTD) basis, the stock has delivered multibagger returns of 116 per cent.

Steel Strips Wheels Ltd has granted in-principle approval for a greenfield manufacturing facility at Chhatrapati Sambhajinagar, Maharashtra, involving an estimated investment of Rs 1,400 crore across alloy wheels, steel wheels and hot-stamped structural body parts.

Steel Strips Wheels Q2FY27 Profit Jumped Over 3X

The announcement accompanied a sharp improvement in September-quarter earnings. Consolidated revenue from operations rose 27.8 per cent YoY to Rs 1,929.92 crore for the quarter ended September 30, 2026, while profit after Tax more than tripled to Rs 116.95 crore from Rs 35.52 crore. Sequentially, revenue was up 60.8 per cent and profit after tax increased 68.4 per cent from the June quarter.

Details of Rs 1,400 Crore Capex Plan

The proposed Maharashtra complex would add 2.5 million alloy wheels annually at an estimated cost of Rs 815 crore, 1.5 million steel wheels annually for passenger vehicles and off-the-road applications at Rs 410 crore, and a hot-stamping line with a capacity of 1.3 million strokes a year at Rs 175 crore. The company said the projects are expected to be completed within 60 months, subject to required approvals and clearances.

Steel Strips Wheels said the investment is intended to meet business growth and rising customer demand. It does not currently operate a manufacturing facility at Chhatrapati Sambhajinagar. The hot-stamping line also marks an expansion into structural passenger-vehicle body parts, adding a product category beyond the company’s core steel and alloy wheels and aluminium steering knuckles.

The company will fund the proposed projects through debt and internal accruals. That funding decision will be closely watched because consolidated borrowings stood at Rs 825.90 crore as of March 31, 2026, while working-capital requirements had risen during FY2025-26 as inventories and receivables increased.

The expansion adds to the company’s existing capacity programme. Its previously approved Bhuj project includes annual capacity of 1.2 million alloy wheels and 0.6 million aluminium steering knuckles. Management had indicated in earlier disclosures that utilisation across major businesses was high, with demand momentum in alloy wheels, tractor wheels, commercial-vehicle wheels and newer aluminium components.

For the first half of FY2026-27, consolidated revenue reached Rs 3,439.74 crore, up from Rs 2,387.35 crore a year earlier, while profit after tax rose to Rs 186.40 crore from Rs 82.76 crore. The board also declared an interim Dividend of Rs 1.50 per equity share of face value Re 1 and appointed Pranav Jain as Vice-President for Finance and Accounts with effect from October 23, 2026.

What This Means for Investors

The Maharashtra proposal materially broadens Steel Strips Wheels’ expansion agenda. At Rs 1,400 crore, the planned outlay equals about 27 per cent of its FY2025-26 consolidated revenue of Rs 5,182.80 crore, although spending and capacity commissioning will be spread over up to five years.

The alloy and steel-wheel additions fit the company’s established business, where high utilisation and improving demand have supported operating leverage. The hot-stamping line is strategically more significant because it introduces a structural auto-component category and could diversify revenue beyond wheel products. However, the project remains at an in-principle stage, with approvals, final execution schedules, customer programmes and eventual utilisation yet to be disclosed.

The development is potentially supportive for the investment case because it follows a strong earnings quarter and signals management confidence in demand visibility. Yet the near-term benefit to profits is likely limited because commissioning is distant and the company intends to use debt alongside internal accruals.

Investors will need to track the final funding mix, incremental leverage and working-capital discipline, particularly after higher inventories and receivables weighed on FY2025-26 cash conversion. The decisive proof point will be whether new capacity secures profitable customer volumes rather than merely expanding production capability.

Disclaimer: The article is for informational purposes only and not investment advice.