1. At a Glance
The wheel of fortune seems to have rolled a little smoother for Enkei Wheels India Ltd (EWIL) this quarter. After a bumpy FY25 that left investors wobbling, the company has finally managed to tighten the nuts in Q2FY26, posting a sharp rebound in profits.
At a market cap of ₹917 crore, the stock trades at ₹510 – a price that says, “I’m back in the game,” but not quite ready for a burnout. Quarterly sales stood at ₹265 crore, up 11.1% YoY, while PAT zoomed 274% to ₹7.94 crore. For a company that recently had more red ink than a schoolteacher’s notebook, that’s an impressive pit stop.
But don’t get carried away – this alloy wheelmaker still carries a debt of ₹250 crore, a low ROCE of 3.94%, and a ROE of 1.06%, which means the returns are thinner than a tyre at a drag race. Still, with a MAP 2 facility upgrade in Pune and a new Managing Director from Japan (Mr. Kenjiro Hama) taking charge, the wheels might finally be aligning.
So, is Enkei back on track, or just spinning in circles? Buckle up, because we’re about to find out.
2. Introduction
If you’ve ever wondered what it takes to survive in India’s hyper-competitive auto components industry, Enkei Wheels’ story is a masterclass in persistence and polishing. Born in 2009 as the Indian arm of Japan’s mighty Enkei Corporation, the company set out to give local car and bike makers a taste of Japanese alloy precision.
But while competitors like Uno Minda, Endurance, and Schaeffler raced ahead with roaring engines, Enkei often found itself idling in the pit lane – producing good products, but not enough good profits.
FY25 was a particularly tricky year: raw material costs inflated like a bad tyre, interest coverage barely made it past 0.89x, and PAT slipped into negative territory at ₹-2 crore. Investors started wondering whether Enkei Wheels would end up like that spare tyre everyone forgets about until it’s too late.
Yet, the latest Q2FY26 results suggest the alloy artisan is rolling back with a vengeance. Sales are rising, margins are inching up, and profits have returned – not blazing, but at least glowing. The MAP 2 line upgrade and MAT facility expansion in March 2025 have started contributing, adding 20,000 pieces per month to production capacity.
So the comeback is here – modest, measured, and most importantly, metallic.
3. Business Model – WTF Do They Even Do?
Enkei Wheels India’s business is quite simple to describe but difficult to execute: they make aluminium alloy wheels for two-wheelers and four-wheelers. These wheels are the silent heroes of your vehicle — strong enough to hold your entire car, yet stylish enough to make you feel you overpaid for them.
The company’s Pune facility is its manufacturing fortress, producing around 1.20 lakh two-wheeler wheels and 1.10 lakh four-wheeler wheels per month, backed by a new painting line capable of 1.70 lakh wheels monthly. That’s a serious output for what many think of as a ‘smallcap auto parts company.’
Its customer list reads like a who’s who of Indian automotive royalty:
- Two-wheelers: Honda, Suzuki, Kawasaki
- Four-wheelers: Honda, Maruti Suzuki, Toyota
Essentially, if you’ve ever ridden
or driven a Japanese machine in India, there’s a decent chance Enkei has helped it roll.
Revenue mix? 67% from four-wheeler wheels, 31% from two-wheelers, and 2% from scrap sales – proving even their waste has a resale value.
But here’s the kicker: despite operating in a high-demand, high-visibility industry, Enkei’s return ratios are flatter than a deflated tyre. Maybe too much Japanese precision, too little Indian aggression?
4. Financials Overview
Let’s hit the numbers.
| Metric | Latest Qtr (Sep’25) | YoY Qtr (Sep’24) | Prev Qtr (Jun’25) | YoY % | QoQ % |
|---|---|---|---|---|---|
| Revenue (₹ Cr) | 265.11 | 238.62 | 233.16 | 11.1% | 13.7% |
| EBITDA (₹ Cr) | 29.99 | 22.47 | 16.85 | 33.4% | 78.0% |
| PAT (₹ Cr) | 7.94 | -4.56 | -1.71 | NA | NA |
| EPS (₹) | 4.42 | -2.54 | -0.95 | NA | NA |
Commentary:
After two quarters of negative profits, Enkei finally hit the accelerator. EBITDA margin expanded to 11.31%, its best since FY23, thanks to higher volumes and better cost absorption from the MAT facility. PAT flipped from a loss to a decent ₹7.94 crore profit — a 274% YoY swing. It’s like watching a Maruti 800 suddenly pull off a Formula 1 overtake.
5. Valuation Discussion – Fair Value Range Only
Let’s get nerdy for a bit.
a) P/E Method:
Annualised EPS = 4.42 × 4 = ₹17.68
Industry P/E = 31.2
So, Fair Value Range (P/E × EPS):
→ Lower (20×) = ₹354
→ Upper (35×) = ₹619
b) EV/EBITDA Method:
EV = ₹1,159 Cr; EBITDA (TTM) = ₹66 Cr
EV/EBITDA = 17.6×
If re-rated to peer median (12×–18×), fair equity range implies:
→ ₹450 – ₹620 per share
c) DCF Method (simplified):
Assuming cash flow growth of 8%, WACC 11%, terminal 4% → Fair Value ~₹470–₹590
Fair Value Range: ₹450 – ₹620 per share
📝 This fair value range is for educational purposes only and is not investment advice.
6. What’s Cooking – News, Triggers, Drama
Ah, Enkei’s news feed reads like a corporate soap opera.
- February 2025: Company upgrades its MAP 2 line and commissions the MAT facility. Trial runs began in February; full-scale production from March 2025. This adds 20,000 extra wheels per month – finally, capacity meets demand.
- February 2025: Longtime MD Mr. Kazuo Suzuki quits; replaced by Mr. Kenjiro Hama – fresh Japanese leadership steering the ship.
- October 2024: CFO Mr. Kunal Dhoke joins, replacing Mr. Jitendra Parmar.
