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    SJS Enterprises

    SJSGood
    Automobile and Auto Components·30 Jul 2025
    Management Summary

    SJS Enterprises reported a robust Q1 FY26, driven by strong performance in its automotive segments, particularly 2-wheelers and passenger vehicles, significantly outpacing industry growth. Profitability remained healthy with expanded EBITDA and PAT margins. The company is actively pursuing capacity expansion projects and strategic customer additions, while addressing temporary softness in the Walter Pack segment due to product concentration and model changes.

    Highlights

    7
    • Consolidated revenue reached ₹209.66 crores, marking an 11.2% Y-o-Y growth.

    • Automotive business (2W & 4W) delivered a strong 22.8% Y-o-Y growth, significantly outperforming the industry's 1.2% growth.

    • EBITDA stood at ₹58.72 crores, growing 16.3% Y-o-Y, with EBITDA margins expanding to 27.6%.

    • PAT increased by 22.6% Y-o-Y to ₹34.62 crores, achieving a PAT margin of 16.5%.

    • The company generated strong free cash flows of ₹32.56 crores, resulting in a net cash position of ₹131.14 crores.

    • Annualized ROCE was 29.5% and ROE was 19.1%, reflecting strong financial performance.

    • Exports contributed 6.7% (₹14.09 crores) to consolidated revenue, with expectations to bounce back from Q2 FY26 onwards.

    What Changed1

    vs Q2 FY26

    Guidance items18 → 13 (-5)

    Key financials

    Single quarter

    11 metrics
    1. 01Consolidated Revenue₹209.66 Cr+11.2%YoY
    2. 02EBITDA₹58.72 Cr+16.3%YoY
    3. 03EBITDA Margin27.6%
    4. 04PAT₹34.62 Cr+22.6%YoY
    5. 05PAT Margin16.5%

    Segment breakdown

    Y-o-Y GrowthRevenue Share
    Automotive Business (2W & 4W)22.8%
    2-Wheeler Segment32.7%39.1%
    Passenger Vehicle Segment13.8%37.2%
    Consumer and Others Segment23.6%
    New Technology Products
    Heatmap· 2 shared metrics

    Guidance & targets

    13
    CategoryTargetPriority
    Volume
    Overall Industry Growth Outperformance
    over 2x
    High
    Export Revenue
    Exports Contribution to Consolidated Revenue
    14% - 15%
    High
    Capacity
    SJS Decoplast Plant Operational
    end of Q3
    Medium
    Revenue
    Exotech Incremental Revenue
    INR 300 crores to INR400 crores
    Medium
    Revenue
    Walter Pack Business Revival
    2-3 quarters / roughly a year
    Medium
    Revenue
    Hero MotoCorp Business Potential
    INR 250 crores
    Medium
    Margin
    Exotech Margin
    18%
    Medium
    Margin
    EBITDA Margin
    25%
    Medium
    Asset Turnover
    Exotech Asset Turnover
    3 to 4x
    Medium
    Profitability
    ROCE
    above 20%
    High
    Capex
    Expansion Capex (FY26)
    INR 40 crores to INR 45 crores
    High
    Capex
    Greenfield Project in Pune (SJS Decoplast)
    INR 100 crores
    High
    Product Launch
    Cover Glass Revenue Start
    FY27
    High

    Risks & concerns

    4
    RiskSeverity

    Product concentration risk and model changes in Walter Pack

    Walter Pack's sales were impacted in Q1 FY26 due to dependence on a few customers/models and a model change in the consumer electrical business, leading to a decline in volumes.Management acknowledged

    medium

    Global magnet supply chain issues impacting OEM production

    Management stated they have not seen any decline in volumes due to magnet issues, despite press coverage, and are optimistic about solutions.Analyst downplayed

    low

    Tariff issues impacting export orders (Stellantis, Whirlpool)

    Management stated they have started supplies and have not had any issues with them so far, without directly addressing the tariff impact.Analyst not addressed

    low

    Areas of Evasion(1)

    • Specific revenue contribution from Hero MotoCorp (management stated they are a supplier, not buyer, and cannot disclose)

    Q&A highlights

    3

    “The challenge really has been Walter Pack, where we have a legacy set of customers, and there's a large dependence on a few customers and a few models. So those models have not performed well in this quarter, and that has accounted for some decline in revenues in that part of the business.”

    Reveals specific reasons for weakness in a segment and provides current capacity utilization across different business units.

    asked by Pradyumna Choudhary

    3 min read6 chapters

    Detailed Narrative

    01

    Strong Q1 FY26 Performance Driven by Automotive Growth

    SJS Enterprises commenced FY26 on a positive note, delivering its 23rd consecutive quarter of outperformance. The company achieved a consolidated revenue of ₹209.66 crores, marking an 11.2% Y-o-Y growth. This was primarily fueled by the automotive business (2-wheeler and 4-wheeler), which grew by a phenomenal 22.8% Y-o-Y, significantly surpassing the overall industry growth of 1.2%. The 2-wheeler segment saw a 32.7% Y-o-Y growth, while passenger vehicles grew by 13.8% Y-o-Y.

    02

    Robust Profitability and Cash Generation

    The company demonstrated robust profitability with EBITDA growing 16.3% Y-o-Y to ₹58.72 crores, and EBITDA margins expanding to 27.6%. PAT increased by 22.6% Y-o-Y to ₹34.62 crores, achieving a PAT margin of 16.5%. SJS generated strong free cash flows of ₹32.56 crores during the quarter, leading to a net cash position of ₹131.14 crores. The company's focus on operational efficiencies and working capital management resulted in operating cash flows amounting to 101% of EBITDA, with annualized ROCE at 29.5% and ROE at 19.1%.

    03

    Strategic Capacity Expansion and New Customer Acquisitions

    Aligned with its growth strategy, SJS is undertaking infrastructure development for capacity expansion at Pune and Bangalore. The greenfield project at SJS Decoplast in Pune, involving an investment of ₹100 crores, is expected to be operational by the end of Q3 FY26, with ₹45 crores already incurred. The company also allocated ₹40-45 crores for other expansions in FY26. SJS successfully added Hero MotoCorp as a marquee customer, with supplies commencing in Q1 FY26, and secured export wins from Autoliv and Fiat Chrysler Automobiles in the U.S. market, as well as Yazaki for domestic automotive business.

    04

    Walter Pack Challenges and Diversification Efforts

    The Walter Pack segment experienced some softness in Q1 FY26, primarily due to product concentration risk, dependence on a few customers/models, and a model change in the consumer electrical business. Management indicated that exports were largely flat but are expected to bounce back from Q2 FY26 with deliveries for Whirlpool and Stellantis orders. The company is actively working to diversify Walter Pack's customer base and product portfolio, expecting a revival in 2-3 quarters or roughly a year.

    05

    Expanding Global Footprint and Export Targets

    SJS is focused on accelerating organic growth through continuous innovation, capacity expansion, and deepening global engagement. Exports contributed 6.7% (₹14.09 crores) to consolidated revenue in Q1 FY26. The company has a clear goal of increasing exports to 14-15% of consolidated revenue by FY28, actively entering new international markets and penetrating existing ones with differentiated products tailored to global customer needs. New export wins from Stellantis, Whirlpool, Autoliv, and FCA are expected to contribute to this growth.

    06

    Advanced Display Solutions and Cover Glass Ambition

    SJS is expanding its ambition in the cover glass segment beyond just cover glass to encompass the overall display screen, seeing it as a huge potential. The company is firming up its entry strategy, including evaluating technology partnerships, and expects supplies for cover glass to commence in FY27. This product-led approach focuses on enhancing aesthetics with added features, allowing SJS to deliver differentiated value and stay ahead of industry trends.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.