SJS Enterprises: Q2-25 Earnings Call Highlights
Record revenue, strong margin performance, & robust growth in exports. Focus on exports, innovation & organic and inorganic growth. Optimistic to strengthen its market position & financial performance
sjsindia.com | NSE: SJS
1. Key Takeaways
1.1 TLDR
SJS Enterprises delivered strong Q2 and H1 FY25 results, driven by record revenue, strong margin performance, and robust growth in exports.
The company is strategically positioned for sustained growth with its focus on expanding its export footprint, driving innovation, and pursuing both organic and inorganic growth opportunities.
The company is optimistic about its long-term prospects and is actively pursuing initiatives to further strengthen its market position and financial performance.
1.2 Operational Highlights:
Financial Performance:
Consolidated Revenue: INR 1,927.9 million (18.1% YoY growth)
EBITDA: INR 517.0 million (37.1% YoY growth)
EBITDA Margin: 26.6% (370 bps YoY improvement)
PAT: INR 291.5 million (50.9% YoY growth)
PAT Margin: 15.1% (328 bps YoY improvement)
Net Cash Balance: INR 388.8 million
Business Highlights:
Secured a large long-term export order from a global OEM for supplies to North America, Latin America, and Europe.
Won new businesses with major clients including Stellantis, Mahindra & Mahindra, TVS, HMSI, Yamaha, Hyundai, and more.
Exports grew 54.7% YoY, contributing 8.5% to total revenue.
Added Fiat Chrysler, Stellantis (Detroit and Brazil) as new customers.
Exotech facility expansion finalized, commissioning expected by Q1 FY26.
Secured 3-megawatt solar power supply, furthering their ESG commitments.
Future Outlook:
Focus on increasing export share to 14-15% of consolidated revenue in the next three years.
Continued investment in innovation and new product development, particularly in the passenger vehicle segment.
Commitment to organic and inorganic growth strategies, including operational efficiency improvements and market expansion.
Exploring opportunities in the medical devices market.
1.3 Key Themes:
Record-breaking Performance: SJS Enterprises reported its highest-ever quarterly revenue, surpassing industry benchmarks. This was driven by robust growth in auto, consumer, and export segments.
"In the second quarter of FY 2025, SJS continued its growth momentum and delivered the highest-ever quarterly revenue of INR 1,927.9 million in Q2 of FY 2025, again, surpassing industry benchmarks."
Strong Margin Performance: Consolidated EBITDA margin for the quarter improved by 370 bps YoY to 26.6%, driven by operational efficiencies and strategic focus on high-margin products.
"On back of robust margin performance delivery by all businesses, I'm delighted to share that the consolidated EBITDA margin for the quarter improved by 370 bps Y-o-Y to 26.6%."
Debt-free Status: SJS successfully repaid a term loan of INR 300.0 million, achieving a debt-free status and enhancing its capacity for future growth opportunities and strategic investments.
Export Growth: Export business witnessed a remarkable 54.7% YoY growth, contributing 8.5% to the total consolidated revenue, highlighting successful expansion strategies and penetration in key markets.
"Export growth was another key highlight during the quarter with a 54.7% Y-o-Y growth increase, contributing almost 8.5% to our total consolidated revenue. This achievement is testament to our successful strategies amidst new business acquisitions and improving market landscape. We are focused on deepening our penetration in the existing geographies while strategically expanding into new markets."
New Global OEM Partnership: SJS secured a large long-term export business from a global OEM to supply to their plants in North America, Latin America, and Europe, solidifying its global presence and securing a significant revenue stream over the next 4-5 years.
"I'm also thrilled to share that we won a large long-term export business from a global OEM to supply to their plants in North America, Latin America, and Europe."
Walter Pack Integration: The integration of Walter Pack India products contributed 25.0% to the consolidated revenue in Q2 FY25, effectively balancing the portfolio across 2-wheelers, passenger vehicles, and the consumer segment.
Capacity Expansion: Capacity expansion plans for the Exotech facility have been finalized, with the new plant expected to be commissioned by Q1 FY26, aimed at scaling production capabilities to meet rising demand and doubling revenue in the next three years.
1.4 Growth Strategies
Expand Export Footprint: SJS aims to significantly increase the share of exports in its consolidated revenue, targeting 14.0% to 15.0% contribution over the next three years. This will involve expanding presence in existing markets, entering new geographies, and optimizing product offerings to cater to global demand.
"As we look ahead, a key strategic focus for our company is the expansion of our export footprint. As we mentioned earlier, our ambition is to significantly increase the share of exports of our consolidated revenue, and we are actively working towards receiving a target of 14.0% to 15.0% export contribution to our consolidated sales over the next three years."
Innovation & Premiumization: The company focuses on developing innovative products for passenger vehicles and expanding its addressable market by positioning itself as a one-stop solution provider for future customer demands.
Organic & Inorganic Growth: SJS is committed to both organic and inorganic growth strategies, including optimizing operational efficiencies, expanding market presence, and pursuing strategic acquisitions.
SJS Enterprises Limited Q2 & H1 FY 2025 Conference Call FAQ
1. What were the key highlights of SJS Enterprises' Q2 FY 2025 performance?
SJS Enterprises achieved its highest-ever quarterly revenue of INR 1,927.9 million, marking an 18.1% year-over-year growth, surpassing industry benchmarks. This growth was propelled by robust performance in the passenger vehicle, consumer, and export businesses. Notably, the consolidated EBITDA margin improved by 370 bps year-over-year to 26.6%, while PAT grew by 50.9% year-over-year, reaching INR 291.5 million with a 15.1% margin.
2. How did the Walter Pack India (WPI) acquisition contribute to SJS's performance in this quarter?
The WPI acquisition enabled SJS to broaden its product portfolio with new-generation products, contributing to 25% of consolidated revenue in Q2 FY 2025. While WPI's revenue slightly dipped quarter-over-quarter due to softer sales to Tata Motors, demand is expected to rebound with new models picking up. SJS remains positive on WPI's long-term growth prospects, particularly in IML content for global markets and new business wins with domestic giants like Mahindra & Mahindra and Maruti Suzuki.
3. What factors drove the significant growth in SJS's export business during the quarter?
SJS secured a significant long-term export business from a global OEM to supply badges to their plants in North America, Latin America, and Europe. The company's export success is attributed to its design-to-delivery capabilities, strategic focus on global markets, and cost competitiveness. Increased volumes from existing clients like Visteon and new partnerships with companies like Continental also contributed to the 54.7% year-over-year growth in exports.
4. What is SJS Enterprises' outlook on future growth and profitability?
SJS aims to significantly increase the share of exports in its consolidated revenue, targeting 14% to 15% contribution over the next three years. The company plans to achieve this by expanding its presence in existing markets, entering new geographies, and tailoring its offerings to global demands. SJS is confident that this strategic focus on exports will diversify revenue streams and enhance its market position.
5. What are SJS Enterprises' capital expenditure plans for the next three years?
SJS has allocated around INR 80 crores for Exotech expansion and INR 40 crores for the optical glass factory. Including maintenance capex, the total capex plan for the next three years is estimated to be between INR 170 crores to INR 190 crores. The Exotech expansion is expected to be commissioned by Q1 of FY 2026, enabling the company to double its revenue in the next three years.
6. What is SJS's strategy for the optical cover glass business, and when can we expect revenue generation?
The optical cover glass plant will be located in Hosur, Tamil Nadu, to supply Visteon's glass display manufacturing facility. Revenue generation from this business is anticipated to commence in Q2 or Q3 of FY 2026, following a period of rigorous validation and testing.
7. Is SJS Enterprises considering any inorganic growth opportunities?
SJS is actively pursuing inorganic growth opportunities, particularly in North America and Southeast Asia. The company is looking to acquire companies in sectors like medical devices, where it can leverage its existing capabilities to scale up the acquired business and expand into new markets.
8. What are SJS Enterprises' plans for the vacant plant in Bangalore?
The Board has decided to monetize the vacant plant in Bangalore. This strategic move aims to strengthen the company's financial position, support organic and inorganic growth initiatives, and improve asset turnover ratios. The cash inflow from this monetization is expected within a period of 12 months.
Source: Link to Earning Call Transcript
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