SJS Enterprises Reports Strong Q2 Growth, Eyes High-Margin Display Business Expansion

SJS Enterprises, a key player in decorative aesthetics for automobiles and white goods, posted strong financial results for the second quarter of FY26. Consolidated revenue grew by 25.4% year-on-year to Rs 241.8 crore, fueled by robust performance in the two-wheeler and passenger vehicle segments. Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) surged approximately 40% year-on-year, with operating margins improving by 300 basis points to 29.6%. Net profit saw a significant increase of about 49% year-on-year, reaching Rs 43 crore. This performance was attributed to an improved product mix, operational leverage, and effective cost optimization.

The company maintains a strong financial position with a net cash balance of Rs 159 crore and a high Return on Capital Employed (ROCE) of 34% as of H1FY26. Its cash flow generation remains healthy, evidenced by a Cash Flow from Operations to EBITDA ratio of 82% in H1FY26.

SJS Enterprises is actively pursuing global market expansion, with exports growing 40.9% year-on-year to Rs 23.2 crore, representing 9.6% of total sales. The company aims to increase this share to 14-15% by FY28.

In terms of capacity building, a new chrome plating and painting facility in Pune is set to be commissioned in Q3 FY26, expected to generate Rs 150 crore in peak annual revenue. Following the acquisition of Walter Pack India, SJS is investing in high-growth segments like Optical Plastics/Cover Glass and In-Mold Decoration (IMD), tripling the kit value per passenger vehicle. A greenfield plant for Optical Cover Glass and display solutions is also under development in Hosur.

A major strategic move is the Memorandum of Understanding signed in September 2025 with Hong Kong-based BOE Varitronix Limited to jointly manufacture automotive displays in India. This collaboration signals SJS's evolution into advanced digital display assembly.

The company is also broadening its customer base, recently onboarding clients like Hero MotoCorp and Stellantis, while continuing its strong relationships in the consumer durables market.

Looking ahead, SJS Enterprises plans a capital expenditure of Rs 220 crore over the next 2-3 years for capacity expansion and technological upgrades, targeting EV segments and premium auto components. Management projects growth at over 2.5 times the industry rate and aims to maintain EBITDA margins around 26%.

The stock currently trades at approximately 29 times its estimated FY27 earnings per share, which is above its 5-year historical average. Analysts suggest it remains a good buying opportunity on market dips.

Impact: This news has a positive impact on SJS Enterprises and the Indian automotive ancillary sector, signaling growth, technological advancement, and increased market share potential. The expansion into display manufacturing is a significant diversification. Rating: 8/10.

Difficult Terms:

Year-on-year (YoY): A comparison of financial or business metrics between a period and the same period in the previous year. EBITDA: Earnings Before Interest, Taxes, Depreciation, and Amortization. It's a measure of a company's operating performance. Basis Points (bps): A unit of measure equal to 1/100th of a percent. 300 basis points is equal to 3%. Return on Capital Employed (ROCE): A profitability ratio that measures how efficiently a company is using its capital to generate profits. Cash Flow from Operations (CFO) / EBITDA ratio: A financial metric indicating how well a company is covering its debt obligations from its operating cash flow. Greenfield Plant: A new facility built from scratch on undeveloped land. Memorandum of Understanding (MoU): A preliminary agreement between two or more parties outlining the basic terms and understanding of a proposed deal. FY27e EPS: Earnings Per Share estimated for the fiscal year 2027. CMP: Current Market Price, the current trading price of a stock. Market Cap: Market Capitalization, the total market value of a company's outstanding shares. OEM: Original Equipment Manufacturer, a company that manufactures products under its own brand name using parts from other companies.