Event Participants
Executives
4 K.A. Joseph (Managing Director), Sanjay Thapar (Group CEO & Executive Director), Mahendra Naredi (Group CFO), Devanshi Dhruva (Head of Investor Relations)
Analysts
13 Aakash (Ashika Investment Managers), Aditya Dayal (Zeva Consultants), Amit Jain (Monarch Network Capital), Chandramouli (Goldman Sachs), Darshan Shah (Multi-Act Equity), Ganeshram Rajagopalan (Unifi Capital), Khush Nahar (Electrum PMS), Munindra Upadhyay (Elara Securities), Nalin Shah (NVS Brokerage), Nitin Agarwal (JM Financial), Pooja Sheth (YES Securities), Pranay Roop Chatterjee (Burman Capital), Unidentified Speaker (Unifi Capital)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Consolidated Revenue | ₹261.0 crores | +24.5% YoY; highest-ever quarterly revenue; driven by PV growth of 45.4%, strong exports |
| Automotive Revenue Growth | +32.4% YoY | Outperformed combined PV+2W industry (21.7% YoY) by ~1.5x; 27th consecutive quarter of industry outperformance |
| EBITDA | ₹80.0 crores | +36.2% YoY; margin expanded 239 bps to 30.0% on favorable product mix, higher export contribution, operational efficiencies |
| PAT (Reported) | ₹74.4 crores | +115.0% YoY; includes one-time gain of ₹24.2 crores from sale of Bangalore old facility (unused since 2019) |
| Adjusted PAT | ₹50.3 crores | +45.2% YoY; adjusted PAT margin 19.3% — highest since IPO; excludes one-time gain |
| Segment Mix – PV | 44.6% of revenue | Grew 45.4% YoY to ₹116.4 crores; premium content expansion and new model wins |
| Segment Mix – Two-wheeler | 36.6% of revenue | Grew 19.5% YoY; sustained momentum with Hero MotoCorp order flowing in |
| Segment Mix – Consumer & Others | 18.8% of revenue | Deliberately rebalanced; exited low-margin business at Walter Pack in favor of higher-value products |
| Exports | ₹25.6 crores | +83.2% YoY; 9.8% of consolidated revenue; driven by increased adoption of differentiated products by global OEMs |
| New Generation Products | ~24% of revenue | Higher-value, technology-driven products; reflects continued portfolio premiumization |
| Operating Cash Flow | ₹80.9 crores | 101.2% of EBITDA; free cash flow ₹83.8 crores |
| ROCE / ROE | 37.2% / 20.3% | Annualized; robust return ratios maintained despite ongoing capex |
| Net Cash Position | ₹328.8 crores | Cash & equivalents ₹338.1 crores; provides flexibility for capacity expansion and inorganic opportunities |
Geographic & Segment Commentary
Passenger Vehicles: Record growth of 45.4% YoY, significant outperformance vs industry. The combined PV+2W industry grew 21.7% YoY; Q1 PV industry declined ~7.5% QoQ on seasonal softness before festive season. Content per vehicle and premiumization continuing to drive growth.
Two-wheelers: Grew 19.5% YoY with Hero MotoCorp's new business now reflected in numbers. Cross-selling opportunity identified in chrome plating for two-wheelers — historically no capacity available to offer new customers, now freed up with new Pune plant. New facility has ₹200–250 crores additional revenue capacity.
Exports: Strong momentum with 83.2% YoY growth, contributing 9.8% of consolidated revenue. Management remains committed to 14–15% of revenue by FY28. Walter Pack Spain non-compete restricts supply to BMW/Mercedes-Benz until January 2027; cooperative route preferred post-expiry.
Walter Pack India: Currently at ~75% utilization; new business under development with customers for both India and global supply. Focus on premium interior and technology-led decorative solutions; 100% wholly owned subsidiary strengthens operational alignment.
SJS Decoplast: New Pune facility commissioned in August 2026 with ~₹200–250 crores incremental revenue potential at full utilization. Sales at Decoplast quadrupled since Exotech acquisition with EBITDA improving from 12% to 22%. Targeting 85–90% utilization within 3 years, asset turn of 2–2.5x.
Company-Specific & Strategic Commentary
Cover Glass & Display Business: Board approved setting up a wholly owned subsidiary; equipment on order, sales expected from Q2 FY28. India display market estimated at ₹500–1,000 crores currently, growing to ₹5,000–7,000 crores by 2030; SJS aspiration is 10% market share by 2030. BOE leads technical development; SJS will localize ~50% of display value (cover glass, specialty coatings) with TFT screens imported. Exclusivity with BOE for four-wheeler displays.
R&D & Innovation: In-house R&D center recognized by Department of Scientific and Industrial Research (DSIR), Government of India. Continued investment in optical cover glass, automotive display systems, illuminated logos, and in-mold electronics.
DSIR Recognition & ESG: R&D center recognized by Department of Scientific and Industrial Research (DSIR); CareEdge ESG rating of 75.6. Employees planted 3,850+ tree saplings; recognized by Ather, Royal Enfield, Mothersons.
New Orders: Secured new orders from Mahindra & Mahindra, Tata Motors, TVS, Autoliv, Royal Enfield, Skoda, John Deere, Hero MotoCorp. SDPL won Tata Motors business; Walter Pack won Mahindra business, expanding cross-selling opportunities.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| FY27 Revenue Growth | Outperform underlying auto industry by 1.5x–2x | Based on current business visibility, healthy order pipeline, and execution capabilities |
| EBITDA Margin (FY27) | 27%–28% range | Earlier guidance maintained; Q1 came in at 30.0% despite input cost headwinds; new products/technologies coming on stream |
| Export Contribution (FY28) | 14%–15% of consolidated revenue | Driven by deeper engagement with existing global customers, new market expansion, product portfolio enhancement; multiple projects in advanced discussions |
| Decoplast Revenue | Double sales in 3–4 years | New Pune facility adds ₹200–250 crores incremental capacity; target 85–90% utilization within 3 years |
| Cover Glass & Display | Sales start Q2 FY28 | Equipment on order; plant installation and customer PPAP validation expected; target 10% of Indian display market by 2030 |
Risks & Constraints
| Risk | Context |
|---|---|
| Input Cost Inflation | Gross margin pressure from rising commodity prices; estimated 50–60 bps profitability impact in Q1 with pass-through expected over 1–2 quarters. Management has robust supply chain and contractual recovery terms with customers. |
| Walter Pack Non-Compete Restriction | Agreement with Walter Pack Spain restricts competition in global markets (including BMW and Mercedes-Benz) until January 2027. SJS prefers cooperative route with Walter Pack Spain thereafter, but export growth could be limited until restriction resolves. |
| Consumer & Other Segment Lag | Consumer/appliances segment currently lagging on growth after deliberate exit of low-margin business at Walter Pack. Ramp-up of higher-profit replacement business is in progress but creates near-term growth drag. |
| Seasonal Q1 PV Softness | Auto industry Q1 typically soft pre-festive; PV industry declined ~7.5% QoQ. Management views as seasonal phenomenon with festive demand expected in Q2/Q3. |
| New Facility Ramp-Up Risk | Decoplast Pune plant and cover glass subsidiary face execution risk — customer PPAPs, qualification runs, and utilization build-up are progressive; break-even expected at 1–1.25 asset turns (approximately year 2). |
Q&A Highlights
Margin Management & Input Costs
- Question: With gross margin flat QoQ and input costs rising, what is the timeframe to pass through the higher costs? (Chandramouli)
- Answer: Gross margin improved slightly QoQ (56.6% → 56.7%). Raw material recovery from customers is contractual, with 1–2 quarter lag; Q1 profitability impact is ~50–60 bps to be offset. EBITDA margin expanded 239 bps YoY to 30.0% despite global commodity headwinds. Management guided FY27 EBITDA margin at 27–28% with new products coming on stream. (Sanjay Thapar, Mahendra Naredi)
Decoplast Capacity & Asset Turns
- Question: How much additional capacity does the new Pune facility add, and what utilization and asset turns can be expected? (Chandramouli)
- Answer: New facility adds ₹200–250 crores of revenue capacity over 3 years; Decoplast sales have grown 4x since Exotech acquisition with EBITDA improving from 12% to 22%. Asset turns expected at 2–2.5x on the new facility; target is to double Decoplast sales in 3–4 years. (Sanjay Thapar, Mahendra Naredi)
Cover Glass Subsidiary Rationale
- Question: Any material update on the cover glass business — timelines, equipment, and why a separate subsidiary? (Pranay Roop Chatterjee)
- Answer: Equipment is on order; sales from the new facility expected Q2 FY28. The WOS structure keeps doors open for potential future JV or investment — easier to invite investment in a new entity than in the parent. BOE is the technical partner leading development; SJS will handle local assembly in India. Customer awards happen globally; PPAP runs will trigger formal purchase orders. (Sanjay Thapar)
Dark Glass Customer Interaction Model
- Question: Will customers like Mahindra speak to SJS or BOE directly? Won't BOE's reputation make ramp-up faster? (Pranay Roop Chatterjee)
- Answer: MD — Correct understanding. BOE leads all technical development and customer discussions. SJS localization follows as a tripartite process (customer, BOE, SJS). SJS holds exclusivity with BOE for four-wheeler displays (Pricol's tie-up is two-wheelers). Displays will be supplied to Tier 1s — Harman, Visteon, Continental, Marelli, Pricol — who assemble instrument clusters. TFT screens imported; ~50% of display value localized (cover glass, specialty coatings). (Sanjay Thapar)
Exports & Walter Pack Ramp-Up
- Question: Exports and Walter Pack have been range-bound for 4 quarters — when does ramp-up start? (Pranay Roop Chatterjee)
- Answer: Multiple projects in advanced discussions across SJS, Decoplast, and Walter Pack; timeline for fructification is during the current year. Export target of 14–15% of revenue by FY28 maintained. Walter Pack new business depends on customer launch decisions — products for both India supply and global locations out of India are under development. (Sanjay Thapar)
Consumer Segment Strategy
- Question: Consumer and others segment has been lagging; what's the growth outlook? (Ganeshram Rajagopalan)
- Answer: SJS takes conscious calls on product profitability — deliberately traded low-margin consumer business at Walter Pack for higher-profit business now in ramp-up. Strategy focuses on overall portfolio profitability rather than individual segment performance; unwilling to chase growth at the cost of margins. (Sanjay Thapar)
Two-Wheeler Growth Triggers
- Question: After Hero order flows in, will two-wheeler growth converge to industry or are there further triggers? (Ganeshram Rajagopalan)
- Answer: Cross-selling is a major trigger — chrome plating is a big untapped opportunity for two-wheelers (not currently supplied to many customers). Historically no capacity available for new customers; new plant frees capacity. Capacity intended to be filled with high-margin exports first. (Sanjay Thapar)
Display Market Size & Margins
- Question: What is the India cover glass TAM and expected margin profile? (Nitin Agarwal)
- Answer: Display market in India is ₹500–1,000 crores today, growing to ₹5,000–7,000 crores by 2030; aspiration is 10% share by 2030. Margins will be higher than assembly margins — localized value includes cover glass and specialty coatings (anti-glare, anti-reflection, anti-fingerprint). Specific margin guidance will come once manufacturing starts (Q2 FY28). (Sanjay Thapar)
PV Segment QoQ Decline
- Question: Why did PV segment revenue decline QoQ — demand softness or destocking? (Pooja Sheth)
- Answer: The PV industry declined ~7.5% QoQ in absolute terms from Q4 to Q1 — seasonal softness before festive season. YoY SJS PV growth is robust at 45.4%. Not a demand issue but industry seasonality. (Sanjay Thapar, Mahendra Naredi)
Walter Pack Non-Compete & Global OEMs
- Question: When does the non-compete with Walter Pack Spain expire, and can domestic success be replicated in exports? (Aditya Dayal)
- Answer: Non-compete runs until January 2027 — restricts supply to BMW and Mercedes-Benz. After expiry, SJS prefers a cooperative relationship with Walter Pack Spain — leveraging partnership to increase Walter Pack India sales, including potential capacity overflow from Spain. Know-how and capability to support overseas requirements are in place. (Sanjay Thapar)
Decoplast Capex Break-Even
- Question: What is the break-even utilization level for the new Decoplast capacity? (Darshan Shah)
- Answer: Break-even at 1–1.25 asset turns (EBITDA level); ramp-up is progressive — facility ready, customer PPAPs ongoing. Full utilization (85–90%) expected within 3 years. (Mahendra Naredi, Sanjay Thapar)
Key Takeaway
SJS Enterprises delivered a record Q1 FY27 with revenue of ₹261.0 crores (+24.5% YoY), EBITDA margin at 30.0% (+239 bps YoY), and adjusted PAT of ₹50.3 crores (+45.2% YoY, 19.3% margin), marking the 27th consecutive quarter of outperforming the underlying auto industry (automotive +32.4% vs industry +21.7%). Reported PAT of ₹74.4 crores included a ₹24.2 crore one-time gain from selling the idle Bangalore facility. Growth was led by passenger vehicles (+45.4% YoY), exports (+83.2% YoY, 9.8% of revenue), and continued two-wheeler momentum (+19.5%). Strategy centers on the newly commissioned Decoplast Pune facility adding ₹200–250 crores capacity, a new wholly owned subsidiary for cover glass and displays (with BOE technical partnership and four-wheeler exclusivity, targeting Q2 FY28 sales start and 10% of India's display market by 2030), and an export target of 14–15% of revenue by FY28. Management reaffirmed FY27 guidance of outperforming the industry by 1.5x–2x. Watch points include 50–60 bps input-cost margin pressure pending pass-through, Walter Pack's non-compete until January 2027, and execution ramp-up of new capacity.