Steel Strips Wheels, a leading wheel manufacturing company, is targeting an EBITDA margin of over 15 percent and revenue up to Rs 3,000 crore next year.

Dheeraj Garg, MD of Steel Strips Wheels on Tuesday said this year the company expects to make 19 percent of sales for alloy wheels, aiming to increase the number to 26 percent next year.

"For this year we will have the highest EBITDA margins ending in March 2021 around 13 percent. Next year we are targeting close to 15 percent EBITDA margins. Next year we are targeting Rs 2,600-3,000 crore revenue target on a net basis,” he said in an interview with CNBC-TV18.

He also said that they will be adding 5 million wheels capacity next year. “The utilization in the plants right now is almost 100% in most of our verticals baring CV and that too is again coming up. So, going forward, in the next year, we should be looking at doing close to 20 million wheels and this is almost the current capacity of the plant. But going forward in the next financial year, we will be adding about 5 million more wheels in the alloy wheels space, in the steel wheel car space mainly for the export markets. So, the export drivers, the alloy wheel growth will determine our increase in the capacity utilization next year,” he said.

Garg said that currently, term loan debt is at about Rs 500 crore and about Rs 275 in working capital. However, he expects that EBITDA of more than Rs 400 crore next year will be taking care of debt and also would help in the expansion of capacities.

He said the company will be able to reduce the pledge to 16 percent by end of this calendar year. “The pledge is slowly coming down every month. Every month we look to reduce supplies by close to 300,000 shares at least. I think by the end of this calendar year we should have pledge down to less than 16 percent of what it is today,” he said.

He also said that they would like to come up with a very robust dividend policy and will look at paying out a dividend in next to next year as most of the investments are done.

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(Edited by : Yashi Gupta)