SJS Enterprises Boosts Growth and Margin by Focusing on High-Margin Display Business

SJS Enterprises showcased robust financial performance in the second quarter of fiscal year 2026, with consolidated revenue rising by 25.4 percent year-on-year to Rs 241.8 crore. This growth was primarily fueled by strong momentum in the two-wheeler and passenger vehicle segments. The company's operational efficiency led to a significant EBITDA increase of approximately 40 percent year-on-year, with its operating margin improving to 29.6 percent, a jump of 300 basis points compared to the previous year. Net profit also saw a substantial rise of nearly 49 percent year-on-year, reaching Rs 43 crore. These improvements are attributed to a better product mix, operational leverage, and effective cost-saving initiatives.

The company maintains a strong financial position, holding a net cash balance of Rs 159 crore and demonstrating a healthy return on capital employed (ROCE) of 34 percent as of the first half of FY26. Furthermore, SJS Enterprises consistently generates robust cash flows, evidenced by a CFO/EBITDA ratio of 82 percent in H1FY26, indicating its capacity to fund strategic expansion.

SJS Enterprises is actively pursuing growth by focusing on high-margin product segments. It has integrated its acquired businesses, like SJS Decoplast, and is investing in expanding its capabilities in areas such as Optical Plastics/Cover Glass, In-Mold Labeling (IML), and In-Molded Electronics (IME). A new chrome plating and painting facility in Pune is set to commence operations in Q3 FY26, with projections to add Rs 150 crore in peak annual revenue. Additionally, a new plant for Optical Cover Glass and display solutions is under development in Hosur.

A key strategic move is the Memorandum of Understanding signed in September 2025 with Hong Kong-based BOE Varitronix Limited. This collaboration aims to jointly manufacture automotive displays in India, transitioning SJS Enterprises from its traditional role in automotive aesthetics to a player in advanced digital display assembly for the growing automotive electronics market.

The company is also widening its customer base, onboarding major clients like Hero MotoCorp and Stellantis, while continuing its supply to established brands in consumer durables. Exports are a growing focus, with a target to increase their share from 9.6% to 14-15% of consolidated revenue by FY28.

SJS Enterprises has outlined an ambitious capital expenditure plan of Rs 220 crore over the next two to three years for capacity expansion and technological upgrades, especially targeting the EV segment and premium auto components. Management aims for growth exceeding the industry rate by over 2.5 times.

Impact This strategic shift towards high-margin display technologies and capacity expansion positions SJS Enterprises for accelerated growth and improved profitability. The collaboration with BOE Varitronix is particularly significant, opening up a new high-growth vertical. The company's robust financial health provides a solid foundation for these expansion plans. The focus on premium segments and technological advancements is expected to enhance its competitive standing and shareholder value. Impact Rating: 8/10

Explanation of Terms: Year-on-Year (YoY): A comparison of financial metrics between the current period and the same period in the previous year. Basis Points: A unit equal to one-hundredth of one percent (0.01%). 300 basis points is equivalent to 3%. EBITDA: Earnings Before Interest, Taxes, Depreciation, and Amortization. It's a measure of a company's operating performance. Return on Capital Employed (ROCE): A profitability ratio that measures how efficiently a company is using its capital to generate profits. CFO/EBITDA: Cash Flow from Operations to EBITDA ratio. It indicates the company's ability to generate cash from its operations relative to its earnings. Capital Expenditure (CAPEX): Funds used by a company to acquire, upgrade, and maintain physical assets like property, buildings, or equipment. OEM: Original Equipment Manufacturer. Refers to a company that manufactures products based on designs supplied by another company.