Sellowrap Industries Limited recently engaged with investors and analysts through a virtual interaction titled the Valueportal Event, organised by Finportal Investments Private Limited. The transcript of this interaction, disclosed to the National Stock Exchange under Regulation 30 of SEBI Listing Regulations, provides detailed insights into the company’s business model, growth strategy, financial performance, and long-term outlook. This Sellowrap Industries investor meet has drawn attention from market participants seeking a deeper understanding of the company’s positioning in the evolving automotive components landscape.

During the Valueportal event, the management of Sellowrap Industries Limited outlined the company’s journey spanning over four decades of manufacturing experience. Operating under the SK Group platform, Sellowrap Industries and its joint venture entity Sellowrap EPP together represent a diversified automotive components business with a strong footprint across India. The company caters to both internal combustion engine (ICE) and electric vehicle (EV) platforms, supplying a wide range of customised components to leading automotive original equipment manufacturers.

Sellowrap Industries’ product portfolio includes plastic injection moulded parts, PU foam components, sealing solutions, labels and stickers, and expanded polypropylene (EPP) moulded products. This diversified offering allows the company to participate across multiple vehicle categories and applications. The management emphasised that the product mix includes both commoditised and value-added components, enabling the company to balance volumes with margins.

A key highlight of the Sellowrap Industries latest news from the Valueportal event was the company’s extensive manufacturing presence. The company operates five manufacturing plants across India, strategically located near major automotive hubs such as Gurgaon, Pune, Chennai region, Chakan, and Gujarat. These facilities together cover more than 150,000 square feet of manufacturing area and are supported by an in-house research and development centre at Ranipet, near Chennai. The R&D centre plays a crucial role in product development, innovation, and adaptation to evolving customer requirements.

The management shared that Sellowrap Industries serves a strong and diversified customer base comprising leading OEMs such as Maruti Suzuki, Mahindra, Tata Motors, Hyundai, Kia, Renault, Nissan, Stellantis, Jaguar Land Rover, Volkswagen, Daimler, Isuzu, and Swaraj Tractors. The company primarily focuses on the passenger vehicle segment, which accounts for nearly 90 percent of revenue, with the balance coming from tractors, commercial vehicles, and select non-automotive applications. Two-wheelers currently form a very small part of the overall business.

From a financial perspective, the Sellowrap Industries analyst meet transcript highlighted steady revenue growth, improving profitability, and enhanced operational efficiency. Management indicated that the company has been growing at a compound annual growth rate higher than the industry average, with an ambition to continue outperforming the sector. The Indian auto component industry is expected to grow at around 11 percent CAGR, while Sellowrap aims to exceed this benchmark through capacity utilisation, new product additions, and deeper customer engagement.

Capacity utilisation currently stands in the range of 77 to 80 percent, suggesting room for incremental growth without immediate large-scale capital expenditure. The management estimated that the existing asset base has the potential to support revenues of around ₹250 to ₹300 crore at optimal utilisation levels. The company has already invested a portion of its IPO proceeds into plant and machinery, with further investments planned in a calibrated manner as demand increases.

Margin performance was another key topic discussed during the Valueportal event. The management noted a visible improvement in EBITDA margins, which increased from around 12 percent to approximately 14 percent. This improvement was attributed to multiple internal initiatives, including automation, cost optimisation, inventory management, and lean organisational practices. The company expects EBITDA margins to improve further as revenues scale up and fixed costs are absorbed over a larger base.

On the profitability front, Sellowrap Industries expects PAT margins to remain stable with a gradual upward bias, supported by operating leverage and disciplined cost control. The management clarified that while raw material price fluctuations do impact margins, these are managed through a combination of customer negotiations, quarterly or annual price revisions, and formula-based pricing mechanisms. Similar arrangements are in place to manage foreign exchange fluctuations.

Customer concentration was also addressed during the interaction. The top five customers contribute approximately 60 percent of total revenue, which management believes is a healthy mix given the structure of the automotive industry. Each major customer typically contributes around 10 to 15 percent of revenue, reducing dependency risk while maintaining strong relationships with large OEMs. In select product categories, Sellowrap enjoys single-source supplier status with market shares of up to 60 to 70 percent, particularly in niche foam and water shield products.

Exports form an important part of the company’s growth strategy. While direct exports are limited, around 20 to 25 percent of revenue comes from deemed exports, supplying components to OEMs that serve global markets. The management highlighted strong opportunities arising from global OEMs increasingly sourcing components from India as part of supply chain diversification and de-risking strategies. The Sellowrap Industries growth outlook includes leveraging these trends to expand export-linked revenues, particularly in EV-related components.

The discussion on electric vehicles was particularly relevant, given the rapid growth of EV adoption in India and globally. Management noted that the global EV industry is growing at a significantly higher CAGR compared to traditional automotive segments, and India is witnessing even faster growth. Sellowrap Industries is actively developing components suitable for EV platforms, many of which are adaptable from ICE applications. While specific product details were not disclosed due to confidentiality, the company confirmed ongoing innovation efforts at its Ranipet R&D centre.

Environmental, social, and governance considerations form an integral part of Sellowrap’s long-term vision. The management shared that ESG initiatives, including carbon neutrality efforts, energy-efficient manufacturing practices, and cybersecurity compliance, are being actively pursued. The company uses all-electric injection moulding machines, avoids conventional servo machines, and is working towards Industry 4.0 integration for better monitoring, reporting, and efficiency.

Sellowrap Industries has also received multiple recognitions, including Great Place to Work certification for the past three years and safety awards from NSCI in the MSME category. These accolades reflect the company’s focus on employee well-being, workplace safety, and organisational culture. Customer awards and recognitions further underline the company’s reputation for quality and reliability.

The management also discussed the company’s order book position, which currently stands at approximately ₹275 crore, providing strong revenue visibility for the next two years. This order book is expected to be executed over a period of around 24 months, supporting steady topline growth. The increasing kit value per vehicle, driven by additional components and higher value-added content, further enhances revenue potential per customer.

On capital allocation, the company clarified that cash flow fluctuations in recent periods were largely due to investments in plant and machinery rather than operational stress. Short-term loans and advances were linked to tooling advances, imported machinery financing, and plant setup costs. Management reiterated its commitment to maintaining a prudent balance sheet while investing in growth opportunities.

The broader industry outlook shared during the Sellowrap Industries Valueportal event was positive. India is currently one of the largest automotive markets globally, with strong domestic demand, cost advantages, and supportive government policies. Initiatives such as the vehicle scrappage policy, PLI schemes, 100 percent FDI allowance, and safety regulations like BNCAP are expected to further strengthen the automotive and auto component ecosystem. Exports from the Indian auto component sector are projected to grow significantly over the coming decade, offering substantial opportunities for established suppliers.

In terms of competitive positioning, Sellowrap Industries operates in a fragmented market with both large and mid-sized competitors. The company competes with players such as Lumax, PPAP, and Radiant in plastics, and with specialised firms in the foam segment. Management believes that its long-standing customer relationships, diversified product portfolio, cost efficiency, and ability to meet evolving compliance requirements provide a sustainable competitive advantage.

In conclusion, the disclosure of the Sellowrap Industries analyst meet transcript offers valuable insights into the company’s strategy, performance, and future direction. The Valueportal investor interaction highlighted management’s confidence in long-term growth, driven by industry tailwinds, EV adoption, export opportunities, and operational excellence. With improving margins, a healthy order book, strong customer relationships, and a clear focus on innovation and ESG, Sellowrap Industries Limited appears well-positioned to capitalise on the next phase of growth in the Indian automotive components sector.

Join our Telegram Channel for Latest News and Regular Updates.

Start your Mutual Fund Journey  by Opening Free Account in Asset Plus.

Start your Stock Market Journey and Apply in IPO by Opening Free Demat Account in Choice Broking FinX.