SJS - SJS Enterprises

📊 NSE: SJS 🏢 Plastics Products 📅 Last Updated: 12/14/2025 13:28

💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue grew 25.4% YoY in Q2 FY26 to INR 2,417.6 million. The Automotive segment (2W + PV) grew 29.5% YoY, with 2-wheelers (2W) surging 44.3% YoY and Passenger Vehicles (PV) growing 16.5% YoY. H1 FY26 consolidated revenue rose 18.4% YoY to INR 4,514.1 million.

Geographic Revenue Split

Exports reached a record INR 231.9 million in Q2 FY26, representing 9.6% of total revenue and growing 40.9% YoY. The remaining ~90.4% of revenue is derived from the domestic Indian market, with a strategic focus on strengthening the North American footprint.

Profitability Margins

Profitability reached record levels in Q2 FY26 with an EBITDA margin of 29.6% (up 300 bps YoY) and a PAT margin of 17.9% (up 278 bps YoY). H1 FY26 PAT margin stood at 17.3%, a 220 bps improvement YoY, driven by a richer product mix and cost optimization.

EBITDA Margin

EBITDA margin was 29.6% in Q2 FY26 (INR 728.4 million) and 28.7% for H1 FY26 (INR 1,315.7 million). This represents a 210 bps YoY increase for the half-year, attributed to improved operating leverage and the integration of higher-margin premium products.

Capital Expenditure

The company is investing approximately INR 100 crore in a greenfield expansion for a new chrome plating plant in Pune to drive the next phase of growth. Historical annual capex was noted at INR 50-60 crore in previous cycles.

Credit Rating & Borrowing

ICRA upgraded the long-term rating to [ICRA]AA- (Stable) from [ICRA]A+ (Positive) in January 2025. The company remains debt-free with a strong net cash position of INR 1,588.8 million as of September 30, 2025.

⚙️ Operational Drivers

Raw Materials

Key materials include plastics for molding and chemicals for chrome plating. Standalone gross margins saw a 200 bps compression recently, attributed to shifts in the product mix and potential raw material price fluctuations.

Import Sources

Not explicitly disclosed in the provided documents, though the company mentions a global footprint and 'deemed exports' involving global OEM purchasing offices.

Key Suppliers

Not specifically named in the documents; however, the company focuses on internal cost reduction initiatives and waste elimination across its plants to manage supplier costs.

Capacity Expansion

Current expansion includes a greenfield chrome plating facility in Pune (INR 100 crore investment). SJS Decoplast has already expanded sales 3x over the last 4 years, indicating significant historical capacity ramp-up.

Raw Material Costs

Raw material costs are managed through a 'DNA of waste elimination' and cost reduction science. Standalone gross margins fluctuated by 2% recently due to product mix changes rather than just base commodity inflation.

Manufacturing Efficiency

Manufacturing efficiency is high, evidenced by a 33.6% ROCE and 20.4% ROE in H1 FY26. Cash flow from operations (CFO) is robust at 82% of EBITDA.

Logistics & Distribution

Not disclosed as a specific percentage of revenue.

📈 Strategic Growth

Expected Growth Rate

250%

Growth Strategy

SJS plans to outperform the industry by 2.5x through a three-pillar strategy: Premiumization (increasing content per vehicle), building 'Mega OEM Accounts,' and aggressive Export expansion (targeting 40%+ growth). Inorganic growth via acquisitions like SJS Decoplast and Walter Pack India (WPI) provides technological advantages in IMD/IML/IME.

Products & Services

Decorative aesthetic solutions including In-Mold Decoration (IMD), In-Mold Labelling (IML), In-Mold Electronics (IME), In-Mold Forming (IMF), and chrome-plated parts for automotive and consumer appliance sectors.

Brand Portfolio

SJS Enterprises, SJS Decoplast (formerly Exotech Plastics), and Walter Pack Automotive Products India (WPI).

New Products/Services

New generation products (IME, IMF, etc.) contributed 23% of consolidated revenue in H1 FY26, reflecting rapid adoption of premium solutions by OEMs.

Market Expansion

Focusing on North America for exports and entering new geographies to mitigate domestic cyclicality. The Pune plant expansion targets increased market share in premium chrome-plated aesthetics.

Market Share & Ranking

SJS has outperformed industry growth for 24 consecutive quarters, growing at 3x to 4x the rate of the underlying Indian automotive production volumes.

Strategic Alliances

Acquired Exotech (now SJS Decoplast) and Walter Pack India (WPI) to integrate advanced technologies and cross-sell across a diversified customer base.

🌍 External Factors

Industry Trends

The industry is shifting toward 'premium aesthetics' and digital cockpits. SJS is positioning itself through In-Mold Electronics (IME) to capture the trend of touch-sensitive, decorative surfaces in modern vehicles.

Competitive Landscape

SJS competes with both domestic and international decorative part makers, but maintains an edge through its integrated technology suite (3 companies specializing in different aesthetic tech).

Competitive Moat

The moat is built on long-standing OEM relationships, high technical complexity of 'niche' products (IME/IMD), and a debt-free balance sheet that allows for aggressive R&D and capacity expansion.

Macro Economic Sensitivity

Highly sensitive to automotive production volumes in India; however, the 'premiumization' trend allows SJS to grow even when industry volumes are flat by increasing value per vehicle.

Consumer Behavior

Increasing consumer preference for premium, high-tech vehicle interiors and exteriors is driving the 29.5% growth in SJS's automotive business.

Geopolitical Risks

Trade barriers could affect the 9.6% export segment, particularly in the target North American market.

⚖️ Regulatory & Governance

Industry Regulations

Subject to automotive manufacturing standards and quality controls required by major OEMs like Tata and Maruti Suzuki.

Environmental Compliance

Received ESG ratings of 70.4 (SES) and 74 (CFC Finlease). Investing in renewable energy to reach 60% usage by end of FY26.

Taxation Policy Impact

Not specifically disclosed, but the company maintains a professional management structure and follows SEBI Listing Regulations.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the inherent cyclicality of the 2W and PV industries, which account for the majority of revenue. A slowdown in these sectors could impact the 2.5x outperformance target.