SJS Enterprises gains 12% on healthy business outlook

Shares of SJS Enterprises soared 12 per cent to Rs 421.45 on the BSE in Friday’s trade, after the company announced it plans to grow at a CAGR of around 25 per cent organically for FY23-25 period and inorganic growth would boost the growth further up. The company engaged in auto components & equipment business said it has won several key projects from Continental, MG, Honda, Hyundai.

SJS said this organic growth would be on back of positive outlook of the automobile industry and the company’s strategy of enhancing its chrome plating capacity, increasing presence in exports market and developing new age products and technologies while strengthening relations with existing customers and building mega accounts.

Simultaneously the company said it would also like to explore more business accretive M&A opportunities that would help it grow over and above the organic growth of 25 per cent.

Meanwhile, SJS has delivered a strong and robust performance, outpacing the industry during March 2022 quarter (Q4FY22).

The company’s consolidated revenue stood at Rs 104 crore, a growth of 13.4 per cent quarter on quarter (QoQ), compared to the 2 per cent growth QoQ of the combined production volumes of Passenger Vehicle (PV) and Commercial Vehicle (CV) segments.
Despite rise in raw material cost, earnings before interest, taxes, depreciation, and amortization (Ebitda) downside was limited at Rs 26.69 crore on the back of operational efficiencies. Ebitda stood at Rs 26.43 crore in Q3FY22. Ebitda margin declined to 25.3 per cent from 28.5 per cent in previous quarter.

The company said current order book to be executed in FY23 is around 80-85 per cent of FY23 forecasted revenue. The strong moat, strong margin profile and expected operating leverage to drive PAT growth of around 30 per cent YoY and going ahead.
SJS deals in 11 product categories like decals, logos, aluminium badges, 2D & 3D dials, chrome plated parts, overlays In-moulding Labeling, optical plastics and lens mask assembly. These products primarily serve two wheelers (2W), passenger vehicles (PV) and large consumer durables (CD) industries along with commercial vehicles, medical devices, farm equipment’s and sanitary ware segments.

However, currently, SJS Enterprises trades 22 per cent below its issue price of Rs 542 per share. The company had made stock market debut on November 15, 2021. It had hit a 52-week low of Rs 340 on December 27, 2021.