How An India-Based Supplier To John Deere Is Outpacing The Auto Ancillary Rally
SJS Enterprises has emerged as a standout performer in the auto ancillary sector, delivering 31% revenue growth and 40% net profit growth in FY25 while significantly outpacing industry benchmarks. The company's diversified approach across automotive, consumer appliances, and other sectors, combined with strategic kit value expansion and international market penetration, has enabled consistent outperformance for 24 consecutive quarters. With strong financial metrics including 20% ROE and debt-free operations, SJS is well-positioned for continued growth through capacity expansion investments of ₹145 crore and export targets of 15% revenue by FY28.
*this image is generated using AI for illustrative purposes only.
The auto ancillary sector has gained significant momentum in recent months, driven by premiumisation across vehicle segments and strategic diversification. While traditional components like engines and chassis dominate attention, the decorative aesthetics segment has emerged as a high-growth area, expanding at a 20% compound annual growth rate during FY21-FY26E.
SJS Enterprises , an India-based auto ancillary supplier operating in this specialized segment, has demonstrated remarkable performance by consistently outpacing industry growth. The company counts John Deere, the US-based agricultural and construction equipment manufacturer, among its global customers, contributing approximately 2.7% of SJS's revenue.
Diversified Product Portfolio and Market Presence
SJS Enterprises manufactures products that enhance visual appeal and brand identity across end products, operating across 14 distinct product categories. The company's offerings include decals, body graphics, dials, domes, 3D lux badges, overlays, aluminium badges, and chrome-plated products.
Unlike traditional auto ancillary companies that depend heavily on automotive demand cycles, SJS maintains a well-diversified revenue structure across multiple sectors:
| Segment | FY25 Revenue Contribution |
|---|---|
| Automotive | 74.5% |
| Passenger Vehicles | 40.5% |
| Two-wheelers | 34.0% |
| Consumer Appliances | 19.5% |
| Other Segments | 6.0% |
This diversification strategy has enabled SJS to deliver higher growth than the industry for 24 consecutive quarters, demonstrating the effectiveness of its multi-sector approach.
Superior Financial Performance
SJS's financial performance has significantly outpaced industry benchmarks across key metrics. The company's automotive sales growth has consistently exceeded industry volume growth rates:
| Period | SJS Automotive Sales Growth | Industry Volume Growth |
|---|---|---|
| FY25 | 29.5% | 9.5% |
| H1 FY26 | 26.3% | 5.5% |
For FY25, SJS reported comprehensive financial growth with revenue increasing 31% and net profit surging 40%. In H1 FY26, the company maintained strong momentum with revenue rising 18.1% year-on-year to ₹451.00 crore. EBITDA increased 29.4% to ₹132.00 crore, while the EBITDA margin expanded 210 basis points to 28.7%. Net profit grew 36.8% to ₹78.00 crore during the same period.
Strategic Kit Value Expansion Initiative
SJS is implementing a comprehensive strategy to transition customers from legacy parts to higher-value solutions, aiming to significantly increase kit value across all segments. The company has set ambitious targets for kit value expansion:
- Passenger Vehicles: Increase kit value from ₹3,500-5,000 by four to six times through aluminium badges, dual-tone wheel caps, IML interiors, and touchscreen cover glass
- Two-wheelers: Lift kit value of ₹300-500 by 1.5 to two times through illuminated logos and touchscreens
- Consumer Appliances: Raise kit value of ₹50-150 by three to four times using IMD and IML overlays and printed electronics
A key component of this strategy involves in-mould electronics capability, strengthened through the acquisition of Walter Pack India in July 2023. Revenue from this unit increased 1.5 times and accounted for 51.7% of FY25 revenue.
Global Expansion and Capacity Investments
SJS is pursuing aggressive expansion into international markets, targeting North America, Europe, and Southeast Asia. The company has secured significant export contracts, including orders from Stellantis for plants across North America, Latin America, and Europe. Additional new clients include Orafol USA, River, Whirlpool, and Azad India.
The company aims to increase exports to 15% of revenue by FY28, up from 7.5% in FY25. To support this growth, SJS is investing ₹145.00 crore in capacity expansion across multiple facilities:
| Investment Details | Amount |
|---|---|
| Greenfield Chrome Plating and Painting Facility | ₹100.00 crore |
| Optical Cover Glass and Display Plant | ₹45.00 crore |
The company maintains a strong financial position with net cash of ₹159.00 crore as of Q2 FY26 and carries no debt, enabling funding of expansion through internal accruals. With return on equity at 20% and return on capital employed at 34% as of H1 FY26, SJS continues to demonstrate efficient capital utilization while pursuing growth opportunities across domestic and international markets.
Historical Stock Returns for SJS Enterprises
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| +3.39% | +5.00% | +9.46% | +47.00% | +62.44% | +260.68% |
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