Shares of SJS Enterprises hit a record high of Rs 571.80, as they rallied 6 per cent on the BSE in Monday’s intra-day trade on strong business outlook. In past three trading days, the stock has surged 19 per cent. The stock of auto ancillary company surpassed its previous high of Rs 550, touched on September 5, 2022.
Today, the market price of the company for the first time crossed its listing day high of Rs 551. The company made its stock market debut on November 15, 2021. It had hit a record low of Rs 340 in December 2021. Investor, Ashish Kacholia, holds 1.35 million shares or 4.43 per cent stake in SJS.
SJS is one of the leading players in Indian decorative aesthetics industry, which has one of the widest range of products with presence across traditional and premium products.
The company deals in 11 product categories like decals, logos – domes & 3D lux, aluminium badges, 2D & 3D appliques, chrome plated parts, overlays, In-moulding Decoratives/ Labeling, optical plastics, and lens mask assembly. These products primarily serve two wheelers (2W), passenger vehicles (PV) and large consumer durables (CD) industries along with commercial vehicles, medical devices, farm equipment’s and sanitary ware segment.
In April 2023, SJS announced acquisition of 90.1 per cent stake in Walter Pack India (WPI) for a consideration of Rs 239 crore. WPI, a subsidiary of Walter Pack Spain, is a leader in the design and development of high value-added functional decorative parts in the Indian market. WPI is one of the very few companies in India that is proficient in advanced IMD, IMF, IML and IME technologies, providing a strong technological advantage for SJS.
Post acquisition and expansion of Exotech business, the management of SJS are confident that with the addition of WPI, SJS will witness multi-fold growth opportunities with a wider product portfolio base and increase in cross selling opportunities.
Looking forward, SJS has raised its FY24 guidance, projecting 50 per cent revenue growth and a 40 per cent rise in profit after tax (PAT). This optimistic outlook is driven by a combination of organic and inorganic growth strategies.
Despite a challenging near-term external environment, the management remained steadfast in its commitment to delivering 20-25 per cent CAGR organic revenue growth over FY23-26, along with maintaining healthy EBITDA margin.
Analyst at Nuvama Wealth and Investment expect a sales/EBITDA/PAT CAGR of 21 per cent/22 per cent/21 per cent over FY23–25 while generating an adjusted RoE (excluding cash and investments)/RoCE of nearly 26 per cent/24 per cent in FY25. “We expect a considerable upside in estimates, with the announced acquisition of WPI,” the brokerage firm said with a ‘Buy’ rating on the stock and target price of Rs 594 per share.
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