SJS Enterprises Ltd

Stock Opportunities Not-so-Hidden Gems
177

Plant Visit Notes

Date: 20-Mar-2026

Location: Bangalore Plant

  • Design:

    • Design is done probono to encourage business, charge it someplace else

    • BMW 440 ultraviolet design was created by SJS; large OEM design their own thing

    • 60-70 ppl design team

  • Clients discussions:

    • Rivian EV under testing, signal indicator product was seen being developed

    • Already doing KIA logo; not doing Hyundai logo; dials business for Hyundai is new driven by Hyundai’s upcoming Talegaon plant; Hyundai okay to give across models and plant; will have to evolve

      • Kia logo is al based → higher realizations

    • Yamaha logo supplied across globe; Honda also across globe multi color (was earlier client, just noted the observation)

    • Hero 100% migration done

    • M&M → SJS SA and WPI business just started + IML in EV also being done by SJS

    • Maruti big client to crack this year

      • IMD to Maruti (in Maruti Victoris supply IMD, winning business in hybrid; but given Japanese parentage new business wins is a slow process)

    • IMD also being supplied to VW, Tata

    • Tata doing well for them (Harrier: tata +antolin [acq. By Shriram Pistons] design freedom on touch based hazard lights)

    • Top 10 cust 70% revenue

  • Customer retention:

    • Tooling for chrome takes 3-6 months

    • Molds are owned by OEM but partial funding , which also helps in retention

  • Overall plating wastage - 2-15% rejection

  • Dial analogue to TFT dial realisations is twice; some Europe to bring back analogue so there is scope for both the parts (question was that does digital speedometer parts dents the traditional standalone entity’s revenues)

  • BOE gives TFT screen and bonding (can it be made by Pricol and given to SJS → afterthought wasn’t discussed); TFT can’t be sourced as it’s patented; no restrictions to sell outside; BOE has 27% global market share

  • Cover glass ATO understanding:

    • Cover glass China is 10-15 cheaper but duties cover up

    • 40 capex (earlier) x3 (ATO) + 25 capex due to BOE x5 (include trading) 2.5 ex trading

    • 20% margin over 2-3 year is the target

    • ROCE should cover up

    • First year single digit ebitda margin

  • Exotech similar margins; expansion in margins are productivity

  • Margin pressure from crude is there, 3month cost pass

  • ChromeX is 2.5x realization to chrome and faster turnaround 3week to 6months (players are adopting it as an alternative to Chrome products where there are ESG concerns)

  • EV CPV currently higher coz of more premium products

  • Is there any new tech scope in aesthetics: Tech wise no more white spaces; PVD only one, but looking to do it inhouse

  • Exotech 40% land available post this expansion

  • Dixon no movement (Dixon is looking for cheapest provider, SJS not in that game)

  • CD revenue is low due to low realisations, while volumes are high, nature of product (question was if SJS lags in CD business as revenues were low)

  • New Products:

    • Hot foil new product client moved due to Europe cost increase (for “JEEP” name logo)

    • 3D decals new product being experimented

  • Exports tailwind → Chrome capacity not coming up + dying driving euro+1 business shift to India/SJS

  • Q&As:

  • Car interior products revenue mix: CPV → 5k going to 11k, 70% would be approx interiors revenue

  • Qualifications cycle in iml/imd:

    • Tool validation time consuming

    • 7-8 months

  • IME adoption

    • One contact vendor/module is the advantage

    • Needs to be designed ground up by oem

    • ORVM or sunroof can be done thru IEM as IEM can reduce weight as well as reduce the parts

    • Reason for clients in not going ahead is the investments done already on say molds; but new generation of products can use

  • Impact of war: RM and demand:

    • Demand not seen any concern given local nature ; some small exposure to me

    • Transport cost going up

    • 30 days inventory; refresh happen 1-1.5 year which allows RM pass thru

    • Chrome business-> pass thru agreement exist within a Quarter

  • Printing is difficult to decipher margins due to batch, inks consumption, density

  • Differentiation vs competition:

    • Design studio, gives 4-5 different tech for solution at varying price

    • Capability to manufacture complex mix and volume

    • Mgmt structure: factory within a factory;14 tech

    • Quality cost arb

  • Pricing pressure is lesser due to: low ticket size , ability to dissect cost not possible

  • Export business

    • Germany based hire: increase FaceTime with OEM so that new business can be targetted with the bigger OEMs (VW, MB etc)

    • Stellantis owning the whole badging is for one model (350cr business from them)

    • Exports are more light weight items(logo and chrome not iml), refresh cycle is not fast, oems seem to have taken India sourcing call

  • New generation product’s revenue contribution to be 30-35% next year or so

  • Cover glass can be 500-600cr revenue by FY30

  • Will do some work on aftermarket, close to heart but not worked on it yet

Disclosure: Invested in personal and client accounts, views may be biased, nothing should be taken as an investment recommendation

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178

thanks for sharing these notes, looks like a 300cr PAT in making company with cover class

179

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  • FY27 growth expectation: with order book “over 85% of the FY27 forecasted revenue”, management expects to outperform industry by “1.5x to 2x in FY27.” They clarified this is consistent with historical messaging and that the prior 2.5x comment was situation-specific (large wins like Hero and exports).

  • Management stated explicitly: “inorganic growth is a very strong pillar of our strategy moving forward.”

  • Cash available was cited as ~INR 243cr; pipeline exists with “a few [targets] in mind… in discussions.”

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180

a good video on sjs to understand better abt co

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181

Overall, Q1 FY27 was a good quarter. Earnings quality still looks strong , margins are improving, CFO is healthy, and the 28.6% growth was comfortably within management’s 27–28% guidance.

The sequential slowdown also looks more like normal industry seasonality rather than any deterioration in the business.The interesting part is Decoplast. It looks like a genuine near-term growth driver, with good margins and additional chrome-plating capacity finally coming online.

My only concern is the export story, which has been flat for several quarters despite the strong YoY numbers. Would be interested to hear the views of the seniors here, especially if you see anything I might be missing.

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182

Growth was driven by Decoplast, but Decoplast has a high base in Q2. Meanwhile, the standalone entity has been stagnating for four quarters in a row. It needs to pick up the growth burden now. Moreover, H2 will have the post-GST high base kick in so YoY growth will anyway come down. The Pune plant costs will come in from August onwards, while the ramp up may take its own time. So margins may be under some pressure. Also, everybody was expecting cost pressures to ease but that has not happened as oil prices / freight etc. continues to be high.

Long term story is intact however, and market is looking beyond all these.

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