SJS Enterprises Q1 FY26 Earnings Analysis

- SJS targets to double sales in the next three years, building on a 2.5x increase over the last three years (Page 13). - The company expects to outperform industry growth by about 2x in the current year (Pages 7, 10). - Premiumization is a key growth driver with expanding product portfolios and new generation products now contributing ~28% of revenues (Page 7). - Two-wheeler volumes expected to grow in high single-digits, passenger vehicle volumes in mid single-digits (Page 10). - Growth in EV-related products is forecasted as EV market share in two-wheelers in India is expected to rise to 25-40% by 2030; current sales from EV are about 3-5% but are positioned to grow with product readiness (Page 20). - Expansions in cover glass, IML/IMD, and other higher value-added products are expected to contribute to sustained growth (Pages 9-11, 16). - Export share targeted to increase to 14-15% of consolidated revenues by FY28 (Page 7).

- SJS expects to achieve sustained growth driven by strong financial performance and clear future vision (Page 6). - Focus on premiumization and new product launches supports growth; new generation products now contribute ~28% of total revenue, up from 13% in FY21 (Page 7). - The company targets to outperform industry volume growth by about 2x in the current year (Page 10). - Expansion plans include increased capacity with Rs. 40-45 crores capex for FY26, supporting higher sales and margins (Pages 5, 16). - SJS Decoplast (formerly Exotech) aims to double sales in the next three years, with targeted turnover of Rs. 320 crores by FY27 (Pages 7, 13). - Strong PAT growth: FY25 PAT increased 39.2% YoY with margin improvements; amortization impact expected to reduce post FY27, improving profitability (Pages 6, 13). - ROCE currently at 25.7%; free cash flow generation will support continued investment and margin expansion (Page 6).

- **Exotech (SJS Decoplast) Expansion:** Rs. 100 crores allocated; Rs. 30 crores spent so far; remaining Rs. 70 crores to be utilized in FY26. Expected commissioning by H1 FY26. - **Cover Glass Business:** Rs. 40-45 crores capex planned over FY26 and FY27 for leased building modifications and capacity setup. Commissioning expected by end of FY26; strategy being optimized for broader display market opportunities. - **Ongoing Capacity Expansion:** Rs. 15-20 crores annual maintenance capex; total capex guidance around Rs. 150 crores for FY26 and approximately Rs. 220 crores over three years. - **Strategic Acquisitions:** Actively evaluating acquisition opportunities, especially targeting the U.S. market; plans to pursue acquisitions are likely post FY26 when additional clarity emerges. - **Capex Focus:** All capital investments are aligned towards capacity expansion, new product development, and leveraging global market opportunities.

- There is no explicit mention of any immediate or planned fundraising through debt or equity in the provided content. - The company is generating strong free cash flow (around 80% of EBITDA converted to cash flow) and expects to maintain a good financial position by the end of FY26 despite ongoing capex. - They are currently conserving cash by leasing facilities instead of building new ones. - The management is actively looking at acquisition opportunities once market conditions stabilize, likely targeting the U.S. market by next year, but no fundraising plans are detailed for this purpose. - Overall, the emphasis is on strong internal cash flow generation to support growth and strategic investments without indicating a need for debt or equity fundraising at present.

- Current order book stands at around 85% of the forecasted FY26 revenues. - The company has a robust order book supporting ongoing capacity expansion plans. - There are promising ongoing negotiations with customers influencing investment plans, particularly for the new shed of about 97,000 sq. ft. - New orders from mega accounts like Hero MotoCorp and other marquee names have been secured and are ramping up. - The addition of Walter Pack and expansion at Exotech targets doubling turnover to around Rs. 320 crores. - Growth drivers are expected from both domestic and export markets with exports projected to increase to 14-15% of consolidated revenues by FY28. - Overall, the company is confident in continued strong order inflows aligned with its strategic growth and premiumization plans.