Detailed narrative
Record-Breaking Q2 FY26 Performance
SJS Enterprises reported its highest ever quarterly revenue in Q2 FY26, reaching INR 2,417.6 million, a 25.4% year-on-year increase and 15.3% sequentially. This significantly outpaced the combined 2-wheeler and passenger vehicle industry growth of 9.5% Y-o-Y, marking the 24th consecutive quarter of industry outperformance. The automotive segment, including 2-wheelers and passenger vehicles, grew 29.5% Y-o-Y, with 2-wheelers alone growing 44.3% and passenger vehicles 16.5%.
Strong Profitability and Cash Generation
The company achieved its highest ever consolidated profitability margins, with EBITDA at 29.6% (up 300 bps Y-o-Y) and PAT at 17.9% (up 278 bps Y-o-Y). EBITDA for Q2 FY26 stood at INR 728.4 million, a 40.9% Y-o-Y increase, and PAT was INR 432.7 million, up 48.4% Y-o-Y. For H1 FY26, consolidated revenue was INR 4,514.1 million (up 18.4% Y-o-Y), with EBITDA at INR 1,315.7 million (28.7% margin) and PAT at INR 778.9 million (17.3% margin). SJS remains debt-free with a net cash position of INR 1,588.8 million as of September 30, 2025, and H1 FY26 cash from operations of INR 1,077 million.
Strategic Expansion into Advanced Display Technologies
SJS has signed an MOU with BOE Varitronix, a Hong Kong-based company, to collaborate on manufacturing automotive display solutions for the 4-wheeler industry. This marks SJS's entry into advanced display technologies, leveraging BOE's expertise and SJS's manufacturing strength to create localized solutions for OEMs. Management expects to see volumes from this new plant by FY28, with a clearer market outlook anticipated in the next 6 months as OEMs finalize display configurations.
Growing Export Footprint and Diversification
Exports revenue reached a record INR 231.9 million in Q2 FY26, growing 40.9% Y-o-Y and contributing 9.6% to total revenue. The company aims to increase its export revenue share to 14-15% by FY28, driven by new customer acquisitions like Nissan and expanding business with existing clients such as Stellantis and Whirlpool. Management emphasized the strategy of entering new global OEMs with one product and then cross-selling its diverse portfolio of 14 technologies across multiple plants worldwide.
Capacity Expansion and Capex Plans
SJS is undertaking significant capacity expansion projects. The SJS Decoplast plant is operating at over 90-95% utilization, prompting a greenfield expansion with an allocated capex of INR 100 crores, of which INR 50 crores has already been incurred. This new facility is expected to be operational by Q3 FY26 and achieve decent utilization within approximately one year from the end of the current fiscal year, targeting an asset turn of 3x. Additionally, INR 40-45 crores are earmarked for SJS Bangalore expansion by year-end, and INR 40 crores for cover glass manufacturing (split evenly between current and next fiscal years). Total capex over the next three years is projected to be INR 220-230 crores.
Revised Guidance and Margin Outlook
Given the strong H1 FY26 performance, SJS has revised its FY26 guidance upwards, now expecting to outperform the industry growth rate by over 2.5x. The company anticipates sustaining EBITDA margins around 27% for FY25-26, an increase from the historical 25-26% range, driven by a richer product mix, improved operating leverage, and ongoing cost optimization initiatives across all plants. New generation products contributed 23% to H1 FY26 consolidated revenue, further supporting margin expansion.
ESG Initiatives and Workplace Culture
SJS continues to make progress on its ESG commitments, with solar power usage commencing at both Pune plants. In Bangalore, approximately 83% of the energy already comes from renewable sources. The company targets to source approximately 60% of its consolidated energy requirements from non-fossil fuel sources by the end of FY26. SJS also received "Great Place to Work" certification for the sixth consecutive year, underscoring its commitment to a positive workplace culture and employee empowerment.