SJS – Emerging as a strong Auto Ancillary company?


SJS Enterprises Ltd - is India's 3rd leading Decorative Aesthetic Company based on its revenue

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(A) About the company

SJS Enterprises Ltd

“Design-to-delivery” aesthetics solutions provider

SJS Enterprises is amongst India’s leading and globally recognized decorative aesthetics players.

It is an end-to-end ‘design to delivery’ aesthetics solutions provider with the capability to customise, design, develop, and manufacture a wide range of products for the world’s leading automobile companies and consumer appliances companies.

Furthermore, SJS also manufacture products for medical devices, farm equipment, and sanitary ware industries.

(B) Journey Since Inception

  • 1987 - Incorporated as a partnership firm in the name of “SJS Enterprises”

  • 2006 - Joint Venture with Serigraph, a US based commercial printing player

  • 2010- Company Forayed into 3D lux badge segment

  • 2015 - Co Founder "Srinivasan and Shivkumar" exited and their shareholding Acquired by a PE Firm - Evergraph

  • 2016 - SJS Added Aluminum badges to the product folio

  • 2018 - New manufacturing facility commissioned with 235,000 sq. ft. area in Pune. Also Entered into new product lines – IMD/ IML parts

  • 2020 - Forayed into formed appliques segment

  • 2021 - Acquired Exotech Plastics, which helped them to Forayed into chrome plating business for 2W & PV.

(C) Shareholding Pattern

SJS - Shareholding
SJS - Shareholding Pattern
SJS - Shareholding greater than 1%

(D) About the Executive Management

  • SJS Enterprises Ltd - Executive Management 1
  • SJS Enterprises Ltd - Executive Management 2
  • SJS Enterprises Ltd - Executive Management 3
  • SJS Enterprises Ltd - Executive Management 4

(E) Business Classification

SJS Enterprises Ltd - Business Classification

(F) Products Classification

SJS's Product offerings include Mainly 11 products which are decals and body graphics, 2D appliques and dials, 3D appliques and dials and many more. However, It has extent of 6000+ SKUs of different items and parts through they serves to their 15 years of avg of Marquee clients.

Existing Products of Standalone Co : SJS Enterprises Ltd

SJS Enterprises Ltd - Products Classification
SJS Enterprises Ltd - Products Classification
SJS Enterprises Ltd - Products Classification
SJS Enterprises Ltd - Products Classification
SJS Enterprises Ltd - Products Classification
SJS Enterprises Ltd - Products Classification

Newly Added Products Through Acquired Co : Exotech

SJS Enterprises Ltd - Products Classification

(G) Revenue Breakup

(i) Segment Wise

SJS Enterprises Ltd - Revenue Breakup Segments

(ii) Products Wise

SJS Enterprises Ltd - Revenue Breakup Products

As you can see, In FY21, its major part of revenue comes from Decals and 3d lux badges Which is its traditional business. Whereas, IML/IMDs which is part of Advance technology category contributed just 2%

Furthermore, SJS Expanded product portfolio even further by addition of chrome plated parts, painted wheels covers, wheels caps, steering wheel logos and illuminated logos.

Additionally, the co has Appointed sales representative in Brazil, Argentina, and Turkey to strengthen position in Latin America and European markets

(iii) Geography Wise revenue

SJS Enterprises Ltd - Revenue Breakup Geography

Management has stated that, it will increase its Export business from 13% to 25% in upcoming years. However, its newly Subsidiary Exotech was not into Exports, So company will debottleneck for export also.

(H) Operational Parameters

(i) Manufacturing Facilities

SJS Enterprises Ltd - manufacturing facilities Plants and Warehouse

SJS has a strong manufacturing footprint with two facilities in Bengaluru as well as Pune. Despite that, SJS has spare land in (Pune) itself for which it can be used anytime for further expansion.

SJS Enterprises Ltd - Global Footprints and Exotech locations

(ii) Manufacturing Capacity & its Utilization

SJS Enterprises Ltd - manufacturing capacity and utilization

Co. has the capability to manage 6,000 SKUs and supplied 1.23cr parts to 175+ customer locations across 20+ countries during fiscal 2022 in an industry that few can match globally.

Furthermore, in FY22 the utilization of the production recorded at 60% which is expected to reach at 90% levels.

(iii) Market Share

SJS Enterprises Ltd - market share

Despite not being the top board, SJS having a gamut of products under each category within the domestic aesthetics business.

(iv) Peer Comparison with Presence in Segment and Financials

(I) Cost Structure

SJS Enterprises Ltd - Cost Structure as % of sales

Raw material Expense took the major chunk of sales accounting 54%, Whereas Employee Cost accounts another high chunk for the expense.

On the other hand, 6% of expense has been incurred on Selling and admins.

During FY21-22, Company has faced very tough times due to drastic fluctuation in the raw material prices of PVC and polymers.

(J) Financial Parameters

SJS - Financials
  • In last 6 years, Company has able to registered 12.35% of CAGR revenue growth Despite all tough Automobile slowdown.
  • Profit after tax, i.e, PAT has also grew with moderate rate of growth of 5.90% CAGR in past 6 years.
  • Cash Flow has become negative in year 2022 due to investment in "Exotech plastics" and other related Capex.
  • On PBITDM and PAT Margins, SJS reported Lower margins due to Consolidated Figures of SJS+Exotech (Without Exotech SJS Financial are still in healthy)
  • Furthermore, management has stated it will retain the upper range of PBITDM margins because of purely focus on premium products.
SJS enterprises Ltd - Dupont Analysis

(K) Management Key Highlights

Business updates

  • Management is optimistic over its upcoming revenue share and targets of 25% CAGR over FY23-25
  • Because of Exotech Acquisition, SJS is Able to entered into newly segment of Chrome Plating Business which accounts 25-30% share of Cumulative Industry.
  • On the other hand, Capacity expansion at Exotech will add another INR 170cr of peak revenues with existing capacity capable of delivering close to INR 130cr of revenues
  • SJS Enterprises is looking to increase its penetration in the new gen technologies products, However, it will take an advantage of premiumization shifts.
  • Moreover, SJS is under discussion to enable more in-organic expansion by the end of FY23.
  • In addition, Company is going to incur Capex of 100 Cr to Increase the Capacity at Pune Facility in which 40Cr will be funded from Internal Accruals
  • Sanjay Thapar MD & CEO commanding that capacity utilization will increase from 60% to 85-90% in upcoming Years.
  • furthermore, Company has recently Bagged orders from South Korean Car Manufacturers like KIA, MG, Hyundai, SKODA, and from Indian Manufacturer Mahindra for new Scorpio Model.

(L) Opportunities and Risks


  • Decorative aesthetics Industry is expected to grow at 20% CAGR over FY21–26 to reach a mark of ~5000 Cr from Current size of Rs2000 Cr.
  • In 2109, Global Aesthetic Industry size is valued at ~20000 Cr, However, The global decorative aesthetic components industry growth is expected to be driven by growing premiumization and rise in adoption of electric vehicles over the next five years.
  • On the Cyclicity front, a risk of cyclicity of Automotive sector has also become very low due to strong demands from the market.
  • In addition, Many Giant Automobile players also started giving guidance that they will increase the production to all time high figures.

Key Risks

  • The top client contributes ~18% to SJS’ revenue, while top three customers contribute ~38%, indicating significant client concentration.
  • Exit of Everstone from the company will be an overhang, as it completed seven years of investment and still holds close to 34.83% of SJS, although a secondary sale is more likely.
  • The company generates significant FCF. However, Deployment of cash in non-accretive acquisitions may be detrimental to the company.
  • Few segments within the decorative aesthetics industry, particularly decals, graphics and logos, are highly commoditized and have low barriers to entry or exit, it may face a stiff competition anytime

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References:  Annual Reports, News Publications, Investor Presentations, Corporate Announcements, Management Discussions, Analyst Meets & Management Interviews, Industry Publications.

Disclaimer: The report only represents the personal opinions and views of the author. No part of the report should be considered a recommendation for buying/selling any stock. Thus, the report & references mentioned are only for the information of the readers about the industry stated.

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