SJS Enterprises Ltd - In-line Performance | Q1FY27 Company Update

SJS’ 1QFY27 performance was in line with our estimates, maintaining its legacy of outperformance to the underlying auto industry growth. SJS maintained its leading profitability with margins > 28% due to ramp up in exports, premiumization and operating leverage. The only laggard was growth in the consumer segment, which is expected to iron out in medium term. SJS secured multiple new business wins from leading OEMs, including Mahindra & Mahindra, Tata Motors, TVS Motors, Autoliv, Royal Enfield, Skoda, John Deere and Hero MotoCorp, further strengthening the order book. The collaboration with BOE Varitronix is progressing well, with orders placed for the equipment and commercial production expected to start in 4QFY28E. We expect the outperformance to continue due to various drivers like rising content per vehicle, increasing wallet share, addition of customers in domestic & export markets and entry into new business having much larger addressable market. We have upward revised our earnings for FY27E/28E by 3.2%/3.3% resp. to account for higher growth from 2W business and higher other income. This along with valuation roll forward has led to upward revision in TP at Rs 2,525 (previously Rs 2,320). However, we move to Accumulate rating due to steep rally in the share price. Accumulate on dips.

SJS Enterprises Ltd. Stock Price Chart

Delivers robust growth on revenue:

Legacy business revenues (decals, logos, dials, etc) surged 16% yoy to Rs 1.4bn, driven by ramp up of dispatches to Hero and exports. Amongst subsidiaries, SJS Decoplast reported strong 38% yoy increase in revenue to Rs 731mn, while WPI delivered revenue of Rs 462mn (+33% yoy). On a consol. basis, revenue grew by 24% yoy to Rs 2.6bn (MNCL estimates of Rs 2.6bn). The automotive segment of SJS delivered 32% yoy growth, sharply outperforming the 22% yoy growth in the base industry (2W + PV) production volumes, while the consumer segment declined 1% yoy.

Margins strength persists:

SJS reported consol. margins at 28.6%; +194bps yoy, primarily attributable to better product mix, operational efficiencies and increasing share of exports. This translated into consol. EBITDA of Rs 747mn; +34% yoy. Adj. PAT grew by 34% yoy to Rs 462mn, aided by higher other income, adjusted for gain in sale of land.

Outperformance outlook constructive:

We expect SJS’s outperformance to industry growth to continue, supported by premiumization trend, increasing wallet share among existing customers, and progressive scale-up with new domestic and overseas clients, targeting ~14–15% export contribution by FY28E. SJS secured multiple new business wins from leading OEMs, including Mahindra & Mahindra, Tata Motors, TVS Motors, Autoliv, Royal Enfield, Skoda, John Deere and Hero MotoCorp, further strengthening the order book. The signing of a Technology License and Supply Agreement with BOE Varitronix for automotive display assembly and optical bonding strengthens SJS’s position in higher-value aesthetic and electronics-adjacent components, providing medium-term optionality to further increase kit value and enter a high TAM (total addressable market). Commercial production is expected to start in 2HFY28E. Capacity expansion is on track, as the Pune chrome plating facility has started commercial production and business wins already secured for FY27. The capacity expansion at Bangalore plant (running at more than 95% utilisation) is expected to be commissioned in 1HFY27E. We have upward revised our earnings estimates for FY27/28E by 3.2%/ 3.3% resp. to account for higher growth from 2W and higher other income. Potential acquisition to further penetrate overseas markets, remains an optionality to our estimates. Remain positive on SJS. Accumulate on dips.

Valuation and risks:

With visibility on outperformance, we factor in Revenue/EBITDA/PAT CAGR of 18%/18%/21% respectively over FY26-28E. We value SJS at 30x (unchanged) Jun’28E earnings to arrive at TP of Rs 2,525 (vs. Rs 2,320 earlier). However, we move to Accumulate rating due to rich valuation. The increase in TP is due to upward revision in earnings and valuation rollover. Risks: Poor recovery in consumer segment, slowdown in exports.

Company website: https://www.sjsindia.com/

*CMP is as per report published date

Click to download the full SJS Enterprises Ltd. Q1FY27 Company Update

Analyst:

• Sahil Sanghvi - Research Analyst, Institutional Equities (NISM-201900004744)
• Uvais Khatri - Research Associate, Institutional Equities (NISM-202300049054)

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FAQs on SJS Enterprises Ltd. Q1FY27 Company Update

How did SJS Enterprises perform in Q1FY27?

SJS Enterprises reported 24% YoY consolidated revenue growth to ₹2.6 billion. EBITDA increased 34% YoY to ₹747 million, while adjusted PAT rose 34% to ₹462 million.

What supported SJS Enterprises' margin growth?

Consolidated EBITDA margin improved 194 bps YoY to 28.6%, supported by a favourable product mix, operating efficiencies and a higher contribution from exports.

What are the key growth drivers for SJS Enterprises?

Key drivers include premiumisation, higher content per vehicle, increasing wallet share, new domestic and overseas customers, export growth and expansion into higher-value automotive technologies.

What is the outlook for SJS Enterprises?

The outlook remains supported by new OEM business wins, capacity expansion, increasing export contribution and the potential commercialisation of automotive display solutions through its BOE Varitronix collaboration.

What is the analyst target price for SJS Enterprises?

The supplied research report assigns a target price of ₹2,525 versus a CMP of ₹2,374 and an Accumulate rating. This is an analyst estimate and does not guarantee future returns.

What are the key risks for SJS Enterprises?

Key risks include a slower recovery in the consumer segment, weaker export growth, slower customer ramp-ups and potential delays in new business or capacity expansion.

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