S.J.S. Enterprises Limited has informed the Exchange about Investor Presentation
November 10, 2022
To,
National Stock Exchange of India Limited Exchange Plaza, 5th Floor, Plot No. C/1, G Block, Bandra – Kurla Complex, Bandra (E), Mumbai -400 051
BSE Limited Corporate Relationship Department, 2nd Floor, New Trading Wing, Rotunda Building, P.J. Towers, Dalal Street, Mumbai – 400 001
Symbol: SJS
ISIN: INE284S01014
Dear Sir/Madam,
Scrip Code: 543387
Subject: Earnings Call Presentation of the Company pertaining to Q2 of FY 2022-23
In continuation with the Company’s letter dated November 03, 2022, pertaining to Intimation of schedule of Earnings call to be held on Thursday, 10th November 2022 at 03:00 p.m. (IST) and pursuant to Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, please find enclosed herewith the earnings presentation on the unaudited Financial Results of the Company for the quarter and half-year ended September 30, 2022.
Also, this presentation will be uploaded on the website of the Company at https://www.sjsindia.com/
Request you to kindly take the above on record.
Thank you,
Yours faithfully, For S.J.S. Enterprises Limited
_____________________ Thabraz Hushain W. Company Secretary and Compliance Officer Membership No.: A51119
Encl: As mentioned above
S.J.S ENTERPRISES LIMITED
Q2FY23 EARNINGS PRESENTATION
Disclaimer
Certain statements made in this presentation relating to the Company’s objectives, projections, outlook, expectations, estimates, among others may constitute ‘forward- looking statements’ within the meaning of applicable laws and regulations. Actual results may differ from such expectations, projections etc., whether express or implied. These forward-looking statements are based on various assumptions, expectations and other factors which are not limited to, risk and uncertainties regarding fluctuations in earnings, competitive intensity, pricing environment in the market, economic conditions affecting demand and supply, change in input costs, ability to maintain and manage key customer relationships and supply chain sources, new or changed priorities of trade, significant changes in political stability in India and globally, government regulations and taxation, climatic conditions, natural calamity, commodity price fluctuations, currency rate fluctuations, litigation among others over which the Company does not have any direct control. These factors may affect our ability to successfully implement our business strategy. The company cannot, therefore, guarantee that the ‘forward-looking’ statements made herein shall be realized. The Company, may alter, amend, modify or make necessary corrective changes in any manner to any such forward looking statement contained herein or make written or oral forward-looking statements as may be required from time to time on the basis of subsequent developments and events
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Today’s Presenters
K A JOSEPH Managing Director
SANJAY THAPAR CEO & Executive Director
MAHENDRA NAREDI Chief Financial Officer
DEVANSHI DHRUVA Head–Investor Relations
• Founded the company in
1987
• More than 34 years of
experience in aesthetics printing business
• Post graduate diploma in business administration from the St. Joseph’s College of Business Administration, Bangalore; B.Sc from Bangalore University
• Over 30 years of experience in the automotive industry
• Previously worked with
Ashok Minda Group, Minda Valeo Security Systems, Minda HUF Limited, Tata Engineering and Locomotive Company Limited (now known as Tata Motors Limited)
• Bachelor’s degree in science (mechanical engineering) from the Delhi College of Engineering
• 20+ years of experience in financial management, key accounting & financial analysis, FP&A, fundraising, M&As, legal & compliances, and strategy.
• Previously worked in Minda Corporation, Wipro & GE
• Bachelor’s degree in Law & Commerce from Rajasthan University, Chartered Accountant and Company Secretary from ICAI and ICSI
• Previously worked with Westlife Development Limited (McDonald’s India) and Piramal Enterprises Limited managing Investor Relations. Earlier worked as Equity Research Analyst with Dolat Capital Markets Pvt. Ltd.
• PGDM – Finance from K J
Somaiya Institute; M.Com & B.Com (Accounting & Finance) from University of Mumbai
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About SJS Enterprises
S.J.S Enterprises Limited : A Snapshot
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One of the leading players in Indian decorative aesthetics industry which has faster than underlying industry growth (1)
Rs 1,169.4 Mn Q2FY23 Revenue (2)
FY21-FY26 CAGR (1)
20%
10-12%
11-13%
12-14%
11 product categories (3)including chrome plated parts
7 End markets served(4) – 2W, PV, CD, CV, Medical devices, Farm equipment & Sanitary ware
2W
PV
CD
Aesthetics
Widest range of products(5) with presence across traditional and premium products
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3
“”Design” to delivery” aesthetics solution provider
Design
Development
Delivery
15 days to 6 months
~123 Mn Total parts Supplied (FY22)
~6,000 SKUs (FY22)
~2,000 Workforce
Strong manufacturing footprint and global distribution capabilities
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5
Long-standing customer relationships
~175+ Customer Locations (as on 31st Mar 2022)
22 Countries exported to
~15 yrs Average length of relationship with 10 largest customers
Note: (1) as per CRISIL Research ; (2) Consolidated revenue from operations; (3) Decals, 2D/ 3D appliques and dials, 3D lux badges, domes, overlays, aluminium badges, IML/IMDs, lens mask assembly, optical plastics and chrome-plated plastic parts; (4) 2W- Two Wheeler; PV – Passenger Vehicle; CD – Consumer Durables; CV: Commercial Vehicles; (5) As on Mar 31, 2021 as per CRISIL Research
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Q2FY23 Highlights
17.3% YoY growth in revenue in Q2FY23 to Rs 1169.4 Mn; Consolidated PAT at Rs 199.5 Mn, on a margin of 17.1%
+
30.3% YoY growth in Automotive (2W+PV) segment - Outperforming the underlying industry
Strong Cash & Cash Equivalents position with Rs 1,295.1 Mn; Debt free company
Added new customers in 2W, PV and appliance segment as well as gained market share with our key 2W customers
SJS Enterprises adopts 7 villages as part of the Swachh Bharat initiative
SJS won 8 awards for Quality performance
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SJS Outperformed Auto Industry
Q2FY23 - Industry Production Volume1 v/s SJS YoY Sales2
Industry SJS
31.3%
7.7%
38.1%
28.9%
30.3%
12.1%
+
Strong double-digit growth, despite macro economic headwinds
17.3%
H1FY23 - Industry Production Volume1 v/s SJS YoY Sales2
Industry SJS
47.4%
35.5%
38.9%
20.0%
27.2%
22.5%
26.5%
Consistently maintaining ~25% Revenue growth
Note: 1) Industry Production Volumes are production in India; 2) For SJS YoY Sales it is Consolidated numbers
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+
SJS Outperformed Auto Industry on Y-o-Y basis
Industry Scenario
➢ Higher than 2W industry growth in 2W segment on back of new order wins from 2W
customers like TVS, Royal Enfield, Bajaj Auto, HMSI etc
➢ Consumer durables segment performance was impacted on account of slowdown in market and
lower demand
➢ Exports grew 25-30% QoQ. However, YoY exports was impacted by 20-25% in Q2FY23, due to
geo-political turmoil and macro economic headwinds:
(i) Ukraine – Russia war leading to lower demand as well as supply chain constraints of raw
materials for EMEA region manufacturers;
(ii) Inflation, rising fuel prices and interest rate dampened consumer sentiments in Europe
and North America
Excluding Europe and North America region, our exports grew ~5.7% YoY during Q2FY23
Despite global macro economic headwinds, SJS maintained sales momentum in Q2FY23
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Q2FY23 Business & Financial Highlights
Q2FY23 Financial Performance (Consolidated)
Picking up a strong pace…
17.3% YoY growth
24.5% YoY growth
30.7% YoY growth
• Revenue at Rs 1,169.4 Mn on account of 30.3% YoY growth in
automotive (2W+PV) segment - outperforming the underlying industry
• EBITDA at Rs 333.8 Mn, on back of higher sales, softening in commodity
prices and operational efficiencies; Strong margins of 28.0%
• Net Profit at Rs 199.5 Mn, with a margin of 17.1%
• Domestic sales clocked 22.9% YoY growth; on back of 35.4% and
31.1% YoY growth in 2W and PV respectively
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H1FY23 Financial Performance (Consolidated) Consistently delivering robust performance…
26.5% YoY growth
• Revenue at Rs 2,201.1 Mn on back of 37.2% YoY growth in
domestic sales
• Automotive (2W+PV) segment delivered 38.9% YoY growth
34.8% YoY growth
• EBITDA at Rs 612.0 Mn, on back of softening in raw material
prices in Q2 and operational efficiencies
• Strong margins of 27.2%, expanded by 142 bps YoY
46.0% YoY growth
• Net Profit at Rs 361.6 Mn, on a margin of 16.4%,
improvement of 219 bps YoY
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Consolidated P&L Performance
Particulars (INR in Mn)
Q2FY23 Q2FY22
YoY% Q1FY23
QoQ% H1FY23 H1FY22
YoY%
Operating Revenue
1,169.4
996.9
17.3% 1,031.7
13.3% 2,201.1 1,739.6
26.5%
EBITDA*
333.8
268.2
24.5% 278.2
20.0% 612.0
454.0
34.8%
EBITDA Margin %
28.0%
26.6%
26.4%
27.2%
25.8%
Profit After Tax (PAT)
199.5
152.7
30.7% 162.1
23.1% 361.6
247.6
46.0%
PAT Margin %
17.1%
15.3%
15.7%
16.4%
14.2%
• Revenue at Rs 1,169.4 Mn grew 17.3% YoY and 13.3% QoQ on back of strong
growth of 30.3% YoY in both 2W and PV segments
• EBITDA Margin expanded 134 bps YoY to 28.0% on back of higher sales, lower
raw material prices and operational efficiencies
• PAT grew 30.7% YoY on a margin of 17.1% to Rs 199.5 Mn
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Consolidated Balance Sheet Performance
• Strong Cash & cash equivalents position (including Investments) of ~Rs 1,295.1 Mn as on 30th Sep 2022
• Strong Cash Flow generation of ~Rs 322.6 Mn for H1FY23 •
FCFF to EBITDA stood at 52.7% for H1FY23
• Debt free Company on net debt basis •
Long term borrowing rating from ICRA is A+(Stable)
• Robust return ratios with ROCE at 34.8% and ROE at 16.7%
Note: ROCE = EBIT /(Total Assets - Cash, Bank & Investments - Current liabilities)
ROE = PAT /Shareholder’s Funds
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Q2FY23 Business Highlights (1/2)
Strong growth story continues…
Adding new customers & growing mega accounts
Key Customer Addition
Key Business Projects Won
Skoda Auto Volkswagon India – decals & 3D lux parts
Leading manufacturer of premium fans & domestic appliances in Indian market – for IML parts
Entered the FMCG premium segment for speciality decals
Working along with EV manufacturers to fulfil EV companies demands and requirements
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Q2FY23 Business Highlights (2/2)
Strong growth story continues…
Products : Focus on new product development and technologies
• SJS continued to demonstrate strong NPD capabilities:
• Illuminated Logos – in discussions with customers for implementing new
generation technology
• Cover glass technology – engaged in discussions and submitted
prototypes to key OEMs/ Instrument cluster companies for localization of center stack displays in India
• Our customers recognize our support as partners – SJS won award for quality
& delivery from Visteon, Lumax and at Quality Circle Forum of India
Cover Glass
Operational Efficiency
• Launched company wide campaign for shop floor improvement & focused reviews
leading to improvement in Overall Equipment Efficiency, better quality & productivity
• Continuous improvement culture through employee engagement - 337 kaizens implemented in-house, enabling SJS to improve reduction in rejections and achieve almost zero-defect outputs for some of our customers
• Implemented ERP at WOS and integrated with parent company to support growing business needs, real-time decision making, improving efficiency & reducing costs
Illuminated logos
Note: WOS – Wholly Owned Subsidiary
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Awards & Recognition
SJS won 8 awards for Quality and Delivery performance
6 awards at Quality Circle Forum of India, 1 from Visteon and 1 from Lumax
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CSR - Serving the Community
SJS Enterprises adopts 7 villages as part of the Swachh Bharat initiative
• SJS Enterprises along with Bruhat Bengaluru Mahanagara Palike initiated door-to-door
garbage collection in Agara Panchayat Jurisdiction Bengaluru, covering 7 villages
• Seek to solve the problem of waste disposal faced by the households in that area
• Help keep the environment clean and consequently, reduce the health problems for
people in Agara village
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Outlook: FY23–25 (Medium Term) FY23 (Near Term)
SJS – Outlook for FY23 - 25
1
Organic growth expected at ~25% CAGR, maintaining best in class margins
Capacity Expansion: Expand chrome plating capacity to meet higher demand pipeline • Double the chrome plating capacity to support revenues of Rs 300 Crs from the current Rs 130 Crs capacity
• Expect capex of ~Rs 100 Crs (spread over 18-24 months) to be funded largely internally through SJS cash
flows and target ROCE of ~20%
• Higher capacity will also enable entry into global markets
Exports : Increasing global presence •
Increase presence in existing geographies and enter new geographies by leveraging strong customer relationships
• Strengthening our sales force in the international markets of Turkey, Brazil & Argentina and exploring similar
opportunities in other countries
Products : Focus on development of new technologies & advanced products •
Intend to develop and introduce Illuminated logos, In Moulded Electronic (IME) parts and other new gen technologies
• Continue to build capabilities to innovate & develop new products & increase application of products across industries
Key Customers : Growing mega accounts • Strengthen relationships with existing customers by expanding the array of products & building large mega accounts
•
Increase customer base by marketing existing products to new customers
• Cross selling opportunities between SJS and Exotech
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“Creating Possibilities” for Two Wheelers Gearing up for the Future…
Chrome plated parts
Fuel Tank Pads
IML
Wheel Rim Stripes
PU Domes & Aluminum Logos
3D Badges
Body Graphics
Aluminium Badge
Paint Protection Films
Speed o Meter Applique
Lens Mask Assembly
Speed O Meter Touch Panel
Illuminated Logos
IME
*Legacy Products
New Generation Products
Future Products
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“Creating Possibilities” for Four Wheelers Gearing up for the Future…
Car Exterior
Chrome Plating
Roof Graphics
Black Out Tape
Fuel Badge
Illuminated Logos
Air vent
Wheel logo
Body Graphics
Door Edge Guard
Wheel Rim Graphics
Door Projector Lights
Chrome Plating Solutions
Side Cladding
Aluminum badges
*Legacy Products
New Generation Products
Future Products
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“Creating Possibilities” for Four Wheelers Gearing up for the Future…
Car Interior
2D / 3D Appliques
Touch Screen
Illuminated logos
Emblems
HVAC Overlays
Interior Highlighter
IME
IMD / IML
Illuminated Scuff Plates
*Legacy Products
New Generation Products
Future Products
Chrome plating interior
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“Creating Possibilities” for Consumer Appliances Gearing up for the Future…
Pressure Sensitive Conductive Buttons
Touch Screen
Printed Electronics (Heaters)
Chrome Plated
High Performance capacitive Overlays
Decorative Decal
IME (In mold Electronics )
Chrome Plating
Branding/
Logos
IML
*Legacy Products
New Generation Products
Future Products
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SJS – Outlook for FY23 - 25
2
Merger & Acquisitions
SJS successfully integrated Exotech business and demonstrated credible business improvement in Exotech’s FY22 performance:
• ~50% YoY growth in
Revenue, increasing from Rs 685 Mn to Rs 1,020 Mn
• Cost synergies & efficiency resulted in Exotech EBITDA margin expansion by 70 bps YoY from 12.2% in FY211 to 12.8% in FY22
SJS will continue ahead with more business accretive acquisitions & the rationale for it will be:
Build capability in adjacent / new aesthetic product categories Identified key product categories to enter / expand presence which include: • • •
IMD / IML IME (In-Mould Electronics) Plastic injection moulding / painting
Expand presence in consumer related industries Enter new segments and expand presence in other consumer related industries targeting • Appliance manufacturers • Hand held devices
Enter new geographies / OEMs for chrome plating • Expand presence in chrome plating (one of the
largest segment for aesthetics parts) • Reduces logistics costs for bulky parts • Provides direct entry into OEMs to support cross
selling opportunities
SJS Management is actively evaluating opportunities and building an M&A pipeline to give an impetus to revenue growth over and above the organic growth of ~25%
Note: 1) FY21 EBITDA Margins is excluding one time gain on sale of land to the extent of Rs 53.83 Mn
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SJS – FY23 Outlook
End Segments
FY22 Industry Domestic Vol Growth
FY23E Industry Domestic Vol Growth
Contribution to SJS Revenue (FY22)
Two Wheelers
Passenger Vehicle
(10.9%)
13.2%
11.0 – 13.0%
24.0 – 26.0%
43.3%
28.8%
❖ SJS expects ~25% YoY revenue growth on account of expected positive outlook
for 2W, PV and Consumer Durables
o Premiumisation + New Customer Wins + Exports = Higher sales growth for
SJS than industry
❖ Strong moat, strong margin profile and expected operating leverage to drive PAT
growth of ~30% YoY and going ahead
Note: Industry growth is domestic sales volumes; FY23E Industry Domestic Vol growth broker reports & market research
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THANK YOU
IR Contact Ms. Devanshi Dhruva | Head - Investor Relations devanshi@sjsindia.com
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