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Earnings Call Overview • Date: August 2, 2024 • Submitted transcript to: National Stock Exchange of India and BSE Limited • Key Executives Present: • Managing Director: K.A. Joseph • CEO: Sanjay Thapar • CFO: Mahendra Naredi
Financial Performance • Revenue Growth: • 60.9% year-on-year increase, reaching Rs. 1,886.2 million • Driven by acquisition of Walter Pack and strong performance in automotive and consumer durables • EBITDA: • Increased to Rs. 505 million with a margin of 26.6% • Profit After Tax (PAT): • Rs. 282.4 million, reflecting a 56.6% increase • Return on Capital Employed (ROCE): 23.3% • Return on Equity (ROE): 19.1% • Free Cash Flow: Rs. 397.2 million
Growth Strategy • Outlook: Plans to outperform industry growth through a diverse product portfolio and strategic expansions • Investment Plans: Rs. 170-180 crores in capital expenditures over FY2025 and FY2026 • Revenue Distribution: • Two-wheelers account for ~50% of standalone sales • Consumer durables contribute 21% to revenue
Market Insights • Passenger Vehicle Business: • Outperformed industry growth by 90% • Success attributed to Walter Pack acquisition and new product launches • Two-Wheeler Segment: • Growth aligned with industry despite seasonal factors • Transition to electric vehicles (EVs) is underway
Future Initiatives • Capacity Expansion: Plans for Exotech and Walter Pack • New Plant for Cover Glass: Targeting supply initiation within 1-2 years • Export Growth: • Current exports at 7.5% of revenue, projected to increase to 14-15% • Initiated exports of two-wheeler parts to Whirlpool
Financial Management • Debt Status: Current debt at Rs. 533 million with plans for repayment • Cash Generation: Strong cash flow supporting growth and debt repayment
Conclusion • Growth Target: Aiming for 1.5 times the industry growth rate • Focus Areas: Diversifying revenue sources while maintaining strong domestic market growth • Future Revenue Expectations: Targeting a 13% to 15% increase in revenue with significant impacts expected from new initiatives in FY2026.
SJS Enterprises Limited Q4 FY2023-24 Earnings Call Summary
Key Management Participants • K.A. Joseph - Managing Director • Sanjay Thapar - CEO • Mahendra Naredi - CFO
Economic and Business Highlights • Indian Economy Growth: 7.8% despite global challenges. • Acquisition: Walter Pack India acquired, diversifying business and reducing reliance on two-wheelers. • Segment Performance: • Walter Pack: EBITDA margin of 25.5% • Exotech: EBITDA margin of 18.1% • Dividend: 20% final dividend announced, first since IPO.
Financial Performance • Q4 FY2024 Revenue Growth: 75.3% YoY, reaching Rs. 1,867.9 million. • Automotive Business Growth: • Overall: 73.5% YoY • Two-wheeler: 44.3% increase • Passenger vehicles: 105.3% increase • Full Fiscal Year Growth: • Revenue: 45% increase • EBITDA: 36.9% increase to Rs. 1,599 million • PAT: 26.9% increase to Rs. 853.7 million • Cash Flow: Rs. 756.2 million; net debt reduced to Rs. 163.5 million.
Strategic Focus • Export Initiatives: Expansion and enhanced ESG efforts, including renewable energy. • Order Book: 80-85% secured for FY2025, driven by acquisitions and diverse products. • Market Opportunities: Emerging cover glass market for integrated display screens in vehicles.
Operational Insights • Exotech Performance: Doubling of revenue and improved EBITDA margins. • Export Market: Key for future growth; current margins constrained until export sales increase. • Capacity Expansion: Focus on partnerships and resource utilization rather than heavy investments.
Customer Concentration • Top Customers: Contribute 70-75% of consolidated revenues; largest customer accounts for 14-15%.
Market Projections • Two-Wheeler Market: Projected growth of 8-10%, with SJS aiming for 1.5 times that rate. • Product Margins: Focus on high-value products with sustainable margins.
Conclusion • Growth Potential: Optimistic outlook for revenue growth and maintaining EBITDA margins around 25-26%. • Future Engagement: Management invites further questions via email or phone.
Earnings Call Overview • Date: February 2, 2024 • Submission to: National Stock Exchange of India and BSE Limited • Key Executives Present: • K.A. Joseph (Managing Director) • Sanjay Thapar (CEO) • Mahendra Naredi (CFO)
Financial Performance Highlights • EBITDA Margins: Improved from 12.8% (Q2) to 20.4% (Q3) for Walter Pack India. • Revenue Contribution: • Two-wheelers: 37% • Passenger vehicles: 36% • Consumer segments: 27% • Consolidated Revenue Growth: 51% year-on-year. • Automotive Business Growth: 36.9% year-on-year. • EBITDA Margins: Increased to 25.5%. • Net Debt Reduction: Over 50%, aiming for negligible debt by FY2024's end.
Growth Outlook • FY2024 Revenue Growth: Anticipated at approximately 45% year-on-year. • Organic Growth Projection: Around 20%. • Consolidated PAT Growth: Expected at about 30%, excluding certain costs. • New Product Introduction: Focus on optical cover glass to enhance market position.
Market Opportunities • Optical Cover Glass Market: Expected to increase content per vehicle significantly. • Export Growth: 40% increase reported, with expectations to return to FY2022 levels.
Capacity and Expansion Plans • Walter Pack Capacity Utilization: Currently at 70-75%, with expected growth. • Organic Growth for FY2025: Projected at 20%. • Annual Capex Plans: Rs. 40-45 Crores planned for FY2025.
Financial Management Insights • Gross Debt Reduction: Decreased from Rs. 83.7 Crores (Q2) to Rs. 55.8 Crores (Q3). • Interest Costs: Stable due to processing costs from term loans. • Standalone Business Margins: Decline attributed to sales mix from new product launches.
Strategic Focus • ESG Initiatives: Increased use of renewable energy and women's empowerment programs. • Customer Relationships: Emphasis on winning new business from existing clients.
Conclusion • Management Confidence: Strong outlook for growth in standalone and Exotech businesses, with expectations to outperform market growth rates in FY2025.
Submission Details • Date of submission: November 14, 2023 • Earnings call date: November 8, 2023 • Submitted to: National Stock Exchange of India and BSE Limited • Key management present: • Managing Director: K.A. Joseph • CEO: Sanjay Thapar • CFO: Mahendra Naredi
Key Highlights • Acquisition of Walter Pack India • Expected to enhance market presence in passenger vehicle and consumer sectors. • Revenue breakdown: 39% from two-wheelers, 33% from passenger vehicles, 28% from consumer businesses. • Focus on integration, growth, and leveraging synergies.
• Performance Metrics • SJS outperformed the automotive industry for 16 consecutive quarters. • Year-on-year revenue growth: 39.5%. • Automotive business growth: 25.2% despite a slight industry decline of 0.3%. • Notable new customers: Lear Corporation, Foxconn Technologies. • Net debt: Rs 599.4 million; cash equivalents: Rs 238.5 million. • Export growth: 54.1% in H1 FY24.
Financial Overview • Acquisition Accounting • 90.1% stake in Walter Pack acquired for Rs 2,393 million. • Net equity value: Rs 413 million; intangible assets: Rs 853 million; goodwill: Rs 1,445 million. • Consolidation of 100% of Walter Pack's assets.
• Q2 FY24 Financials • Consolidated revenue: Rs 1,632 million (39.5% YoY increase). • Organic revenue growth: 6.3%. • Adjusted EBITDA: Rs 398.7 million (19.4% YoY increase). • Adjusted PAT: Rs 208.1 million (4.3% increase). • ROCE: 17.9%; Return on Equity: 13.7%.
Future Outlook • Growth Projections • Anticipated consolidated revenue growth for FY24: ~45% YoY; organic growth: ~20%. • PAT growth guidance: ~30%, impacted by amortization costs and model launch delays.
• Strategic Initiatives • Focus on increasing kit value across vehicle segments. • Revised expansion plan for 2024. • Collaboration with chrome plating manufacturer to enhance capacity.
Challenges and Responses • Sales and Margin Concerns • Q2 sales impacted by lower-margin tooling costs. • Anticipated recovery in Q3 and Q4 as production ramps up. • Clarification on increased amortization costs due to acquisition.
• Client Management and Acquisition Context • Walter Pack acquisition aimed to diversify sales mix and reduce reliance on two-wheelers. • Key client relationships managed by Roy Mathew, a long-time employee.
Capacity and Capex Plans • Utilization Rates • SJS: 65-70%; Exotech: ~95%; Walter Pack: ~70%.
• Capital Expenditure • FY25 capex: Rs 40-50 crores; Rs 80 crores planned for next year focusing on expansions.
Product Development • New Opportunities • Growth in cover glass for automotive sector. • Prototypes for digital displays in vehicles being developed. • Updates on collaboration with Foxconn for two-wheeler EV displays.
Conclusion • Management expressed optimism for future growth and stability, inviting further questions from participants.
Meeting Overview • Date: September 4, 2023 • Submission: Transcript submitted to National Stock Exchange of India and BSE Limited on September 11, 2023. • Format: Conducted via video conferencing. • Facilitators: Company Secretary Thabraz Hushain and Chairman Ramesh C. Jain.
Key Highlights • Resolutions: Five resolutions for shareholder approval, with remote e-voting and live voting. • Technical Support: Provided for participants experiencing issues.
Chairman's Address • Achievements: Pride in India's space exploration successes. • Company Performance: • Manufactured over 6,700 SKUs. • Supplied 136 million parts across 22 countries. • Doubled topline despite global economic challenges. • Acquisition: Successful acquisition of Walter Pack India. • Shareholding Change: Notable change due to Evergraph's liquidation of its stake.
Financial Performance • Revenue Growth: 17.1% YoY revenue growth reported by K.A. Joseph. • Consolidated Revenue: Rs 4,330 million for the full year. • EBITDA: Grew by 23.2% to Rs 1,167.8 million. • Profit After Tax: Increased by 22.2% to Rs 672.5 million. • Market Segments: Two-wheeler and passenger vehicle segments performed well; consumer segment declined.
Inorganic Growth Strategy • Acquisitions: • Exotech Plastics acquisition doubled revenues and improved margins. • 90.1% stake in Walter Pack India acquired for INR 2,393 million. • Future Growth: Anticipated 20-25% revenue growth over the next three years. • Synergies: Plans to explore synergies between Exotech and Walter Pack.
Shareholder Questions • Acquisition Rationale: Addressed by Sanjay Thapar regarding Walter Pack's valuation and technology. • Exotech Expansion: Updates provided on sales growth and capacity expansion plans. • Dividends: Discussion on the lack of dividends since listing; focus on reinvestment for growth.
Leadership Structure • Post-Everstone Exit: Ramesh C. Jain confirmed continued management by Mr. Joseph and Mr. Thapar, with future leadership grooming for Mr. Joseph's son, Kevin.
Conclusion • Meeting Closure: Ramesh C. Jain thanked participants and provided details on e-voting and AGM scrutinizer appointment.
Earnings Call Overview • Date: August 3, 2023 • Transcript submitted to National Stock Exchange of India and BSE Limited • Key Management: • K.A. Joseph (Managing Director) • Sanjay Thapar (CEO) • Mahendra Naredi (CFO)
Acquisition of Walter Pack India • Strategic importance for diversifying revenue sources: • Expansion into passenger vehicles and consumer appliances • Walter Pack India performance: • 21% year-over-year revenue growth • EBITDA margins of 31.5% • Management's outlook: • Optimism about future growth and synergies • Focus on integrating new technologies
Financial Performance Highlights • Consolidated revenues growth: • 13.6% year-on-year • 18.6% increase in automotive segment • Cash flows reported at Rs. 77.1 million • PAT growth of 11.1% YoY • Pro forma financials indicate potential revenue growth of 48.2% YoY
Organic Growth Strategy • Focus on aesthetic requirements and global expansion • Deferral of Exotech's chrome plating capacity expansion to 2024 • Target of 20-25% organic growth from FY24 to FY26 • Projected 50% year-over-year revenue growth
Customer and Market Engagement • New customers added: Autoliv and Toyota Tsusho • Significant cross-selling opportunities between SJS, Exotech, and WPI • Increased export contributions to sales
Technology Development • Development of In-Mold Electronics (IME) technology • Collaboration with Walter Pack Spain for technology support
Challenges and Future Outlook • Exotech sales slightly down due to soft demand • Anticipated robust demand in the next quarter • Ongoing discussions with Hero and Foxconn for EV parts
Conclusion • Overall optimism about growth trajectory and strategic decisions • Invitation for further questions at the end of the call
Submission Details • Date: May 21, 2023 • Submitted to: National Stock Exchange of India and BSE • Content: Transcripts of Q4 and FY2023 earnings call held on May 16, 2023
Key Management Personnel • K.A. Joseph: Managing Director • Sanjay Thapar: CEO • Mahendra Naredi: CFO
Acquisition Highlights • Acquisition of Walter Pack India: • Strategic importance for market leadership in decorative aesthetics • Expected to enhance EPS and create cross-selling opportunities • Part of a broader goal to grow consolidated revenue by over 50% in FY24
Q4 Financial Performance • Revenue: INR 1,065.7 million (2.4% YoY growth) • Passenger Vehicle Segment: 17.2% growth • EBITDA: INR 271.8 million (1.8% growth, 24.8% margin) • Full Year Revenue: INR 4,330.5 million (18.3% increase) • PAT: INR 672.5 million (28.8% increase) • Cash Position: INR 1,648.2 million, debt-free
Market Position and Strategy • Competitive Landscape: • Unique product portfolio with high entry barriers • Key competitors: Polyplastics and Classic Stripes • Growth Projections: • 20-25% revenue increase over the next three years • 50% revenue growth expected for FY24
Challenges and Mitigation • External Challenges: Regulatory impacts, geopolitical issues • Performance Declines: • Export revenue down 23.8% YoY for Q4 • Consumer durables down 10.7% in Q4 • Mitigation Strategy: Diversified customer base and new business acquisitions
Future Business Focus • New Segments: Optical plastics, touch panels, electrical segment (switchboards) • Integration of Walter Pack: Expected to enhance capabilities and market position
Capacity Utilization • Exotech: 80-90% capacity • Walter Pack and SJS: 60-65% capacity
Client Acquisition and Partnerships • Ongoing efforts to acquire new clients, including partnerships with Litemed and Samsung • Important supplier role for Mahindra
Conclusion • The call concluded with an invitation for further questions to be addressed offline, emphasizing the company's optimistic outlook despite short-term challenges.
Submission Details • Date of notice: February 15, 2023 • Meeting date: February 10, 2023 • Platforms: National Stock Exchange of India and BSE • Availability: Transcripts and recordings on the company website
Key Highlights from the Earnings Call • Management Participation: Key members included Managing Director, CEO, and CFO. • Performance Overview: • Strong performance in a challenging global market. • Emphasis on market leadership, customer relationships, and operational efficiency.
Financial Performance • Q3 FY23 Results: • Total revenue: INR 106 crores (up 21% YoY). • Passenger vehicle sales: +43%, Two-wheeler sales: +14%. • EBITDA: INR 284 million (up 25.3% YoY). • PAT: Increased by 40.6% for the first nine months of FY23. • Cash Position: Healthy cash balance of INR 143 crores, debt-free status.
Market Challenges and Growth Strategy • Challenges: • Geopolitical issues and macroeconomic factors affecting exports and consumer durables. • Growth Focus: • Diversification of offerings and enhancing global presence. • Commitment to corporate social responsibility.
Unique Selling Propositions (USPs) • Competitive Edge: • Seamless design-to-manufacturing capabilities. • Strong delivery capabilities and labor arbitrage. • Extensive experience with a large number of SKUs.
Customer Relationships and Market Share • Client Transition: Long-standing relationships facilitate transitions from other suppliers. • Market Headwinds: Global issues impacting demand, but no loss of customers reported.
Revenue Guidance and Future Outlook • Guidance Adjustment: FY23 revenue growth guidance revised from 25% to 20%. • Acquisition Plans: Cash reserves for capacity expansion and value-added acquisitions.
Product Development and Market Demand • New Technologies: Expected rollout in FY24, with significant growth potential. • Export Demand: Current decline but optimism for recovery, particularly in new technology products.
Conclusion • Future Revenue Targets: Medium-term target of 20-25% from new products, potentially rising to 70% in seven years. • Export Performance: Breakdown includes Europe (30-35%) and USA (8-10%). • Overall Sentiment: Optimism about domestic demand and strategic initiatives for growth.