SJS Enterprises - Riding the Premiumisation Wave

Ever wondered why certain cars feel more expensive the moment you step in — even if they aren’t the highest-end models? It’s not just the leather seats or the large touchscreens — it’s the smaller, seemingly invisible elements like the glossy chrome logo, the textured dashboard finish, or the sleek control panel.

These small but defining elements are what make a car look and feel premium. And in a world where consumers increasingly demand premiumisation, these design enhancements have become indispensable for automakers.

Enter SJS Enterprises, a company that’s built an entire business around these decorative aesthetics, making vehicles, electronics, and appliances look and feel high-end. And as automakers and consumer brands push for premiumisation to boost margins, SJS sits right at the center of this shift, benefiting from the growing demand for superior aesthetics.

The Business of Aesthetics

To understand why SJS Enterprises is growing rapidly, you first need to understand what they make.

SJS manufactures a range of decorative aesthetic products for vehicles and consumer durables. Their portfolio includes:

• 3D dials & logos: Those high-quality, textured logos and dials you see in premium cars.

• Capacitive overlays: Sleek touch-sensitive surfaces, commonly used in modern control panels and infotainment screens.

• In-mould labels (IML) & in-mould decoration (IMD): High-quality graphics embedded directly into plastic surfaces for a premium finish.

• Chrome-plated parts: Polished chrome-finished badges and emblems used in premium cars.

• Overlays & appliques: Textured decorative overlays used on white goods like washing machines, refrigerators, and microwaves.

  
  

These components may seem insignificant, but their role is massive — they determine how premium a car or appliance feels.

And the shift towards premiumisation has put SJS Enterprises in the driver’s seat, as there are clear industry trends unfolding, such as:

• In automobiles, companies are aggressively upgrading their products — adding premium features, textured surfaces, high-quality logos, and visually appealing infotainment systems to attract buyers.

• In consumer durables, brands are introducing sleeker, aesthetically superior designs to position their products as aspirational.

  
  

In both industries, the demand for decorative aesthetic components is skyrocketing — and SJS is uniquely placed to capture this shift.

Why? one may ask. Here’s a perspective:

• 3D dials & capacitive overlays fetch almost 2x higher revenue per unit compared to traditional components.

• Premium logos bring about 20% higher realisation per unit.

• IML/IMD products generate 1.5x more revenue compared to regular plastic labels.

  
  

As automakers and consumer brands chase higher margins, they are increasingly relying on vendors like SJS to deliver these aesthetic upgrades. And what’s interesting is that SJS isn’t just riding the premiumisation wave — it’s expanding it through strategic acquisitions.

Filling the Gaps With Smart Acquisitions

To strengthen its premiumisation play, SJS made two acquisitions — both aimed at expanding its product portfolio and increasing revenue per vehicle.

In 2021, SJS acquired Exotech Plastics — a chrome-plating specialist catering to 2W, PV, and consumer appliances. Chrome parts like wheel covers, appliques, door handles, and monograms fetch higher realisation, and with chrome-plated parts projected to become the largest segment in the aesthetics market by FY26, this acquisition gave SJS direct access to a fast-growing, high-demand product line.

Then in 2023, SJS acquired Walter Pack India (WPI) — a leader in In-Mould Labelling (IML) and In-Mould Decoration (IMD), primarily used in high-end dashboards, interior trims, and control panels. These products fetch 1.5-1.6x higher realisation per vehicle, significantly boosting SJS’s revenue per vehicle while also securing major clients like Tata Motors and Maruti Suzuki.

Both acquisitions were laser-targeted moves to tap into higher-margin, higher-realisation products, ensuring SJS stays ahead as premiumisation deepens.

Combined, these two acquisitions now contribute ~50% of SJS’s total revenue, significantly enhancing its premium product portfolio and revenue per vehicle.

Numbers Backing the Shift

As per CRISIL estimates, the Indian aesthetics industry stood at ~Rs. 3,330 crore in FY24, projected to grow at 15-20% CAGR over the next five years, driven by 10-12% volume growth in auto and consumer appliances and rising kit value per vehicle led by premiumisation.

SJS, with its diversified offerings and strong positioning, typically guides for 1.5-2x growth versus the underlying industry.

The strategic acquisitions of Exotech and Walter Pack have transformed SJS’s revenue mix. From a 70% revenue dependence on 2Ws in FY19, it now stands diversified at 37%/36%/20%/6% across 2W/PV/Consumer Appliances/Others, effectively reducing cyclicality risk.

Additionally, Exotech added Rs. 1,100-1,500 per vehicle in kit value, while Walter Pack boosted it further by Rs. 2,000-4,000 per vehicle.

SJS is also betting big on its Cover Glass product, having invested Rs. 40 crore in a new Cover Glass facility in 1QFY25. Once fully operational, this facility is expected to generate Rs. 100 crore in revenue (15% of FY24 revenue). This could take SJS’s kit value to Rs. 8,000-10,000 per vehicle from ~Rs. 6,000 currently.

In the past, SJS’s revenues have grown at a CAGR of 28% from FY21 to FY24. Going forward, driven by capacity expansion, new product launches, and growing TAM, revenues are projected to grow at 16% CAGR from FY24 to FY27.

EBITDA also expanded at a 25% CAGR from FY21 to FY24, although margins compressed from 30.3% to 24.2% due to higher input costs and acquisition-led expenses.

However, with better capacity utilisation, higher-margin products like Cover Glass, and operating leverage kicking in, margins are expected to rebound to 26.1% by FY27 driving the EBITDA growth at 20% CAGR.

Additionally, the company maintains a debt free balance sheet, which is an added bonus in a capital-intensive industry.

The Valuation Lens

So how do you value a company like SJS Enterprises?

There is no direct listed comparable for SJS, given its niche in decorative aesthetics. However, compared to broader auto-ancillary peers, which trade at an average of ~22x FY26E P/E, SJS is currently valued at 19.2x FY26E P/E, making it 10-12% cheaper than the industry average despite stronger growth prospects.

With higher kit value per vehicle, rising export share, and scaling up of high-margin businesses like Cover Glass and IML/IMD, SJS seems well-positioned for a potential re-rating if these triggers materialise.

Additionally, the 35% correction in stock price from its 52-week high in December 2024 has brought valuations to a more comfortable level, offering a favourable risk-reward for long-term investors.

Opportunities and Risks Ahead

Opportunities

The Dixon Play: Onboarding Dixon Technologies as a client opens a significant growth avenue for SJS, with potential for increased volumes across Dixon's expansive EMS portfolio.

Exports Boom: SJS has secured a major export contract from Whirlpool's North American plant (for dishwashers). Additionally, Stellantis (Jeep) has also onboarded SJS for new product lines, expanding its export contribution to 14-15% over the next three years.

Higher Realisations: Growing penetration of 3D dials, capacitive overlays, and cover glass in vehicles will push ASP (average selling price) per vehicle higher.

Challenges

Auto Dependency: 80% of SJS’s revenue comes from automobiles. Any slowdown in PV/2W production can directly impact growth.

Execution Risk: Scaling the newly launched Cover Glass facility and hitting desired production efficiencies could take time.

Demand Weakness: Any weakness in demand in any of its key segments could impact financial performance.

Conclusion: A Company Riding a Structural Shift

The big idea with SJS Enterprises is simple:

• As premiumisation in vehicles and consumer goods grows, demand for high-quality aesthetic components will skyrocket.

• SJS, being one of the very few players with deep expertise in decorative aesthetics, is perfectly positioned to capture this demand.

• With expanding export orders, capacity expansions, and higher-margin products entering the mix — SJS is poised to deliver industry-beating growth for the foreseeable future.

  
  

The next time you step into a car and admire its premium design, there’s a high chance SJS played a role in it. And with premiumisation being a non-reversible trend, the road ahead for SJS looks just as premium as the products they design.