Steel Strips Wheels is up 14% at Rs. 145 per share, after cooling from day’s high of Rs. 152.50 on BSE. Share price has surged on September wheel sales crossing the psychological mark for the first time in its history to reach 1 million units - 10.05 lakh to be precise. While this is not only 8.6% higher YoY from 9.25 lakh wheels last September, the better news is 3.5% MoM increase from 9.71 lakh wheels in August 2013, which was the company’s highest monthly sales so far.

While the tractor and 2 and 3 wheeler sales along with exports surged, the passenger car wheels declined 14% YoY, albeit growing 8% MoM to 4.18 lakh wheels, main contributors being Honda Amaze, Renault Duster and Hyundai i10 Grande – to which company enjoys 100% supply.

Going ahead, there are two things to watch out for in this steel wheel rims maker for cars, MUVs tractors, trucks, OTRs, 2/3 wheelers for key OEMs – tractor sales likely to continue strong momentum in H1FY14 and so it the case with 2/3 wheelers. From December 2013, a new passenger car business will commence to which company has 100% supply.

Having clocked sales of 28.54 lakh wheels in Q2FY13, it has guided sales of 30 lakh wheels for Q3FY14 i.e. 5% QoQ growth, lead by an expected 24% growth in tractor sales. At current share price of 145, share is ruling at PE multiple of about 7 times, based on expected FY14 earnings.