Key highlights of the 3QFY24 Result
Margin improves sequentially; Long term growth remains intact
The company during the quarter has reported 51.0%/45.2%/32.7% YoY increase in Net sales/EBITDA/PAT to Rs 160.9 cr/Rs 41.2 cr/Rs 20.9 cr respectively. The company’s domestic sales clocked 51.9% YoY growth on back of 54.4% YoY growth in PV business and 217.4% YoY growth in consumer business. The exports sales are recovering and delivered 39.7% YoY growth.
FY24 and FY25 Outlook:
For FY24, the company has reiterated to achieve revenue growth of ~45% YoY and PAT growth of ~ 30% YoY. It expects organic revenue growth of ~20% YoY. For FY25, the company expects to outperform the market by 1.5x – 2.0x on back of cross selling opportunities, acquisitions (WPI & Exotech) and increase in kit value.
Walter Pack Automotive India (WPI): WPI witnessed steady recovery in sales on back of gradual volume growth of new models from key OEM account. This led to margin improvement in WPI EBITDA from 12.8% in 2QFY24 to 20.4% in 3QFY24. The business is slowly coming back to normalcy and the company expects further improvement in sales and profitability in 4QFY24. It expects further improvement in FY25 on back of robust order book.
Exports:
The company aims to increase its export share from current 7% to 10%- 11% of its consolidated revenues over the next 2-3 years.
Reiterate BUY with Price Target Rs 825/-
We believe, SJS to deliver robust earnings growth led by (a) Healthy sales traction for WPI aided by cross-selling opportunity and robust order inflow, (b) Expand wallet share by winning new businesses from its key customers, (c) Relatively faster pace of growth over the automotive industry led by premiumisation and increased value per kit and (d) New technology product categories like IML, IMD, digital dials, optical plastics/cover glass. At the CMP of Rs 605, the stock is currently trading at a P/E of 21.9x/16.0x/13.2x of its FY24E/FY25E/FY26E EPS of Rs 27.6/Rs 37.8/Rs 45.8 respectively. We retain our BUY rating on the stock with price target of Rs 825 thus providing an upside potential of 36%.
Click here to download SJS Enterprises Ltd 3QFY24 Results Update by SBI Securities
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