SJS Enterprises Q4 FY26 Earnings Analysis

- SJS Enterprises expects strong growth driven by premiumization and expanding customer base. - Automotive business grew 46% YoY vs. 15.7% industry growth, indicating ~3x outperformance. - Company aims to continue outperforming the industry, targeting 2.5x industry growth in FY27. - Focus on ramp-up of underutilized capacities (70-75% utilization currently), which will boost volumes and fixed cost absorption. - New generation products contribute about 23% of revenues, supporting higher margins and growth. - Expansion into large display markets (10-14 inch panels) with a potential market size of Rs. 3,000-4,000 crores by FY30. - Export revenues targeted at 14-15% of overall revenue by FY28, backed by growing presence in North America and Europe. - Capex on cover glass and display systems to start contributing sales from FY28 onwards. - Strategic inorganic growth through acquisitions planned to propel business further.

- SJS expects to maintain EBITDA margins in the range of 28%-29%, aiming for a conservative and sustainable growth path. - The company is witnessing operating leverage benefits as capacity utilization (70%-75%) ramps up, enhancing fixed cost absorption. - New generation products contribute around 23% of revenue, driving higher margins and supporting continued EBITDA growth. - EBITDA margins have improved from 24% historically to about 30% recently, with a clear plan to sustain margin expansion. - Revenue growth is driven by strong demand in 2-wheeler and passenger vehicle segments, with a focus on premium products and export markets. - SJS targets increasing exports to 14%-15% of total revenue by FY28, aiding top-line growth. - Capital investments are funded internally, supporting growth without excessive leverage. - The company aims to outperform industry growth by over 2.5x, with disciplined cost management and inorganic growth via acquisitions also part of the strategy.

- Capacity expansion at Bangalore facility progressing; Rs. 45 crores earmarked, expected completion by Q4 FY26. - Greenfield chrome plating plant at Pune set up and under commissioning. - Cover glass and display unit development at Hosur with Rs. 40 crores invested plus an additional Rs. 20-25 crores planned for related display capex. - Plant for cover glass and display to be ready in FY27 with sales expected to start in FY28. - Technology partnership with BOE Varitronix to manufacture cover glass, perform optical bonding and assemble automotive displays. - Capex funded entirely through internal accruals maintaining strong balance sheet flexibility. - Inorganic growth via M&A targeted, focusing on faster market access rather than filling product gaps; active evaluation of acquisition targets ongoing with cash reserves earmarked for deployment.

- The company maintains a very conservative approach towards debt, showing shyness in taking loans. - Focus is on generating free cash flow internally to fund investments and expansions. - All ongoing and planned capacity expansions are being funded entirely through internal accruals. - As of December 31, 2025, the company had a strong cash position with Rs. 2,098.8 million in cash and cash equivalents and a net cash position of Rs. 2,030.1 million. - There is no mention of any upcoming fundraising through debt or equity in the call. - The company prefers to honor commitments and deliver as promised without relying on external borrowings. - The management is focusing on disciplined capital allocation and generating free cash flow for growth.

- The company continues to win significant new business across segments and geographies, including global OEMs like Whirlpool, Stellantis, and Nissan. - Whirlpool and Stellantis orders are part of the core export portfolio, with multiple plants globally sourcing from SJS. - They are expanding presence in Western European OEMs and are confident about the growing acceptance of their products worldwide. - Recent wins include advanced and premium products, especially in 2-wheelers and passenger vehicles. - Discussions and consolidations are ongoing with customers like Hero MotoCorp for expanded product offerings. - Management aims to leverage inorganic growth through acquisitions to access new markets and accelerate orderbook expansion. - The company expects steady order inflows as new product launches and premiumization trends continue driving demand. - No specific quantitative value of the current or expected orderbook was disclosed.