# 1. Financial Performance ## A. Key Figures * Consolidated Revenue: **₹2,096.6 Mn** (+11.2%) * EBITDA: ₹587.2 Mn (+16.3%) · Margin: 27.6% (+106 bps) * PAT: ₹346.2 Mn (+22.6%) · Margin: 16.5% (+154 bps) * Free Cash Flow: ₹325.6 Mn · Net Cash Position: ₹1,311.4 Mn * **Operating Cash Flow:** **101% of EBITDA** ## B. Revenue Growth * **Outperformance vs. Industry:** Revenue growth matched flat industry production, with **strong double-digit segment growth** in 2-wheelers and passenger vehicles driving outperformance. * **Resilient Model:** Diversified business structure sustained growth and profitability despite headwinds in Walter Pack, underscoring operational resilience. ## C. Margin Expansion * **Profitability Leverage:** Robust margin expansion in both EBITDA and PAT driven by **operating leverage and cost discipline**, with cash conversion reinforcing efficiency. * **Exotech Margin Trajectory:** Acquired business significantly improved to **18–19% margins**, with exports expected to support further gains toward a sustainable 18% target. * **SJS Margin Potential:** Core SJS operations achieving **27% margin**, above long-term 25% target, indicating strong scalability and pricing power. ## D. Cash Flow Strength * **Exceptional Cash Conversion:** Operating cash flows at **101% of EBITDA** reflect high operational efficiency and working capital discipline across the portfolio. * **Self-Funded Growth:** Walter Pack operating below full capacity (70–75%) yet generating strong cash flows, enabling internal funding of expansion initiatives. ## E. Balance Sheet Position * **Capital Efficiency:** Despite low reported ROCE (5%) and ROE (1%), balance sheet remains strong with **net cash position** and **zero debt**, supporting strategic flexibility. * **Growth Enablers:** Advanced engineering capabilities, product innovation, and diversified customer base position company for next-phase scaling. --- # 2. Segment & Product Performance ## A. Key Figures * Automotive Segment Growth: 22.8% Q1 FY26 YoY (+2160 bps vs. industry) * **2-Wheeler Segment Growth:** **32%** YoY (Hero MotoCorp contracts, share gains) * **Stand-alone Business Growth:** **28%** YoY (driven by new and existing OEMs) * **New Technology Products:** **25%** of Q1 FY26 revenue ## B. Automotive Segment Growth * **Sustained Outperformance:** Automotive business delivered 8% growth, marking **23 consecutive quarters** of outpacing the industry, driven by share gains and new wins in 2-wheeler and PV segments. * **Market Share Gains:** Strong double-digit growth in 2-wheeler segment fueled by **new supply contracts with Hero MotoCorp** and expanded content with Bajaj, HMSI, and Yamaha. * **Resilient Portfolio:** SJS Decoplast and Exotech delivered robust performance, offsetting segment weaknesses and enhancing overall business durability. * **Domestic Scaling:** Exotech’s domestic business has tripled over four years, with management confident in sustaining this trajectory. ## C. New Product Contribution * **Innovation-Led Revenue:** Over **one-fourth of revenue** derived from new technology products, reflecting successful premiumization and portfolio diversification. * **EV Platform Expansion:** SJS Decoplast and Walter Pack are key suppliers for Mahindra’s new electric vehicle range, with sales expected to scale alongside model launches. * **Content Per Vehicle Rising:** Cross-selling of chrome parts, decals, IML, lens masks, and displays enables revenue growth to exceed underlying OEM volume trends. * **Display Assembly Roadmap:** Initial focus on **cover glass** for automotive displays, with strategic intent to progress toward **full display assembly** (TFT, backlight unit integration). --- # 3. Capacity & Manufacturing ## A. Key Figures * **SJS Capacity Utilization:** **70–75%** (planned expansion with **₹40–45 Cr** outlay, FY26 completion) * **SJS Decoplast (Exotech) Utilization:** **95%** (₹100 Cr greenfield project, **₹45 Cr spent**) * **Exotech New Plant Revenue Potential:** **₹300–400 Cr** incremental by FY27 * **Asset Turnover (Exotech New Facility):** **3x–4x** projected at full run-rate ## B. Capacity Utilization * **Selective Disclosure:** Company refrained from disclosing utilization for Exotech and Walter Pack, emphasizing group-level strength over individual unit metrics. * **Near-Full Utilization:** SJS Decoplast operating at **95% capacity**, relying on outsourcing to meet current demand. ## C. Expansion Projects * **Multi-Location Scaling:** Expansion underway in **Pune and Bangalore**, including greenfield sites and new plating/painting facilities to support premium aesthetics and high-value tech. * **Exotech Expansion Accelerated:** New plant now expected online **Q3 FY26** (earlier Q4), enabling early RFQ participation due to integrated process design and unlocking **significant export upside**. * **Self-Funded Growth:** All major expansions financed via **internal accruals**, underpinned by strong cash flows and asset efficiency. * **Future-Ready Investments:** **Cover glass facility** planned later this year, signaling intent to capture additional value-added opportunities. --- # 4. Customer & Order Book ## A. Key Figures * Exports: ₹140.9 Mn (6.7% of consolidated revenue) * **New Export Order Value:** **₹5 Cr/year** from Autoliv * **Stellantis Contract Value:** **₹300 Cr** over 8 years * **Hero MotoCorp Spend:** **~₹250 Cr** in relevant product category * **Yazaki Domestic Business:** **>₹10 Cr** existing revenue ## B. Key Customer Additions * **Marquee Win with Hero MotoCorp:** Addition of the world’s largest 2-wheeler manufacturer provides **sustained growth runway**, with supplies already initiated and ambitions to become a preferred supplier across multiple models. * **Strategic Expansion in Automotive Tier-I Base:** New wins with **Autoliv, FCA, and Yazaki** strengthen global footprint, with product scope spanning illuminated logos, dials, and aesthetic components under **confidential agreements**. * **Yazaki Elevated to Mega Account:** Existing relationship scaled to strategic tier, with cross-selling and international expansion expected to drive **multi-year revenue ramp**. ## C. Export Order Ramp-Up * **Export Growth Inflection Underway:** Supply ramp with **Stellantis and Whirlpool** has commenced in Q2, aligned with global platform rollouts, with **no disruption from tariff concerns** reported. * **Phased Revenue Realization:** Export contracts will scale gradually—**Autoliv contributing ₹5 Cr annually**, while the **₹300 Cr Stellantis program** unfolds over eight years through staged implementation. * **Product Diversification in Exports:** Components include **logos, inlays, and instrument cluster dials**, targeting both safety and aesthetic segments in international markets. --- # 5. Strategic Initiatives ## A. Key Figures * **Revenue Mix Post-Acquisition:** **1%** 2-wheeler · **2%** passenger vehicle · **6%** consumer & others (Q1 FY) ## B. Product Diversification * **Strategic Expansion into Displays:** SJS is entering display technology—an adjacent high-growth field—leveraging core competencies in **aesthetics, surface finishing**, and OEM relationships to move beyond cover glass toward **complete display assembly**. * **Technology-Led Differentiation:** Advanced in-house R&D enables **future-ready solutions** and higher kit value, supported by process synergies using raw glass in machining, coating, and strengthening similar to existing plastic workflows. * **Disciplined Growth Approach:** The company is intentionally slowing expansion to assess strategic fit, with new plant investments requiring a **minimum 20% ROCE** threshold for approval. * **Diversification Mitigates Risk:** Walter Pack’s underperformance underscores the value of broad diversification across products and segments, while its **business model reset**—with new models in development—positions for recovery within a year. ## C. Global Expansion * **Export Momentum Building:** Recent wins with Stellantis, Whirlpool, Autoliv, and FCA validate global strategy; **Exotech plant upgrades** are export-focused, particularly in chrome plating (largely secured) and painting (under discussion with major global customer). * **India’s Rising Export Role:** Declining overseas investments in chrome plating create a strategic window for India—and SJS—to capture share, with exports expected to be **more value accretive** than domestic sales. ## D. M&A & Partnerships * **Inorganic Growth on Hold, Not Off Track:** While acquisition plans are paused for cash accumulation this year, **M&A remains a core strategic pillar**, with deals targeted for next fiscal. * **JV Talks Progressing:** A **joint venture with Cover Glass** is under active discussion, with a formal announcement expected upon conclusion. --- # 6. Risks & Customer Concentration ## A. Legacy Business Challenges * **Concentration Risk Exposed:** Revenue declines in consumer durables and exports stem from high customer and product concentration in **Walter Pack**, particularly due to low offtake from a key automotive OEM and a model change in consumer durables. * **Diverging Performance in Acquired Units:** While Exotech delivered growth, Walter Pack faced sales decline, underscoring persistent product concentration risk in the legacy portfolio. * **Sectoral Slowdown Impacting Key Customer:** WPI revenue pressured by reduced consumption in consumer durables, affecting one large customer, amid broader sectoral weakness and product lifecycle shifts. * **Strategic Opportunity in Display Assembly:** SJS is positioned to capture a unique market gap, as few Indian companies—and only Visteon in automotive—can assemble complete displays. ## B. Long Lead Time Risk * **Extended Cycles Define Entry Timing:** 2-wheeler model refreshes occur every ~5 years, creating periodic but predictable opportunities for new design wins. * **WPI Revival Hinges on Early Customer Engagement:** Recovery requires customer diversification and cross-selling, constrained by long lead times (7–9 months) for engineering and integration of high-value engineered products. * **Significant Tooling Investment and Delays:** Walter Pack’s complexity entails **INR 8–10 Cr** per tooling project and development cycles of **7 to 9 months**, contributing to flat revenues over five quarters despite active pipeline. * **No Near-Term Supply Disruption:** Rare earth magnet supply chain concerns have not caused OEM production delays, supported by government incentives and international dialogue. ## C. Model Change Impact * **Market Expansion Over Competition:** SJS sees complementary opportunity rather than direct competition with Visteon, as growing demand will necessitate multiple suppliers across Tier 2 and direct assembly roles. --- # 7. Guidance & Outlook ## A. Key Figures * **Export Revenue Target:** **14%–15%** of consolidated revenue by FY28 (from **7%**) * **Growth Track Record:** **3x growth** achieved over last four years ## B. Growth Rate Target * **Outperformance Mandate:** Aiming to grow at approximately **2x the underlying industry rate** for full-year FY26, supported by diversified end-markets and global customer relationships. * **Sustained Momentum:** Management expects current strong performance to continue, extending a track record of **23 consecutive quarters** of outperformance. ## C. Export Revenue Goal * **Export Inflection Ahead:** Revenue contribution set to accelerate from Q2 FY26 with ramp-up of Whirlpool and Stellantis orders. * **Margin Upside from Global Mix:** Rising export share to target **14%–15% by FY28** will be accretive to margins, as export business carries **higher margins than domestic**. ## D. Display Assembly Ambition * **New Revenue Stream Launching FY27:** Cover glass revenues expected to commence next fiscal, pending finalization of product mix and capex; commercial orders not yet confirmed. * **Structural Market Expansion:** Large-screen display adoption moving into mainstream vehicles, creating significant incremental demand beyond current supplier capacity.