Thread by @tushar9590

#SJSEnterprises
Have been writing about this one for quite sometime.
Thought of making a thread on it, just putting forward my views abt the co, & why I feel so confident about its growth prospects, despite the street not accepting it post listing.
Here it goes.
(1/n)

Co is the leading player in the Indian decorative aesthetics industry, serves to Automotives & Consumer Appliances industry.
No peer of the Co in domestic or overseas that could provide all variety of products that co have in their kitty, & kind of complexity co can handle.
(2/n)

SJS Enterprises caters to almost all categories of the Aesthetics, Below Table shows the comparison of some of the key players in Aesthetics.
SJS Enterprises is the only company to cover all categories, also it is the only listed company in the listed space with no peers
(3/n)

Co has the highest Ebitda margins amongst all its peers near 28 pct. While the total capacity of their plants is double the present utilization of close to 50 pct, so you will see operating leverage playing out in the coming quarters, as the Co grows
(4/n)

Around 58% topline comes from 2W, 17 pct from Passenger Vehicles & around 25% from Consumer Appliances
Also export share for the co is presently 16%, & Co is actively lukin to increase its share from exports by looking at inorganic opportunities in NA, EU & South East Asia
(5/n)

Global Aesthetic Industry (EU, UK & US) is 202.50 Billion Rupees as of 2019, which is also expected to grow 20% for next 5 years.
Co plans to take its export share to 25 pct by FY25.
Co has been strengthening its sales team, to acquire more biz overseas.
(6/n)

Co has an advantage of price competitive against global peers, while maintaining superior quality of its products.
Also the exports side, margins are even better compared to domestic, & co plans to use global acq, to get its products manufactured from Bangalore unit
(7/n)

to leverage on lower cost of production, being price competitive while providing superior quality.

Let's now understand the 100% OFS part of the IPO leading to disappointment among investors.
Everstone Captal had bought 51% stake in the co for 350 crore in 2015.
(8/n)

While they sold half their stake after almost 7 years through OFS, they wouldv got their cost of buying the stake almost 7 years back.
Street gave a thumbs down to the IPO mainly due to 100% OFS & no fresh issue, without looking at the prospects of the co:
(9/n)

>Co should grow 25% for next 4-5 years,with Ebitda margins 28-30 pct; while the industry degrew in FY21, SJS Enterprises showed growth in the same pandemic led period
>Capacity is double the current output, so further scope of margin improvement.
(10/n)

>Acquisitions across the Europe, US, South East Asia on the cards to further expand its reach in global markets.

All the above reasons make my conviction in the Co stronger day by day.
(11/n)

Hope the thread was helpful to those seeking more info abt the co. I have tried to cover all the points here.

If you liked the thread, please like/retweet the first post.
@AnishA_Moonka
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@ValueEducator
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@AmitabhJha3
@shubhfin

Just to add to above thread, Co is a debt free co, with a cash of 102 crores to fund its inorganic growth, mcap of the co is 1165 crore :)

@nid_rockz wud love ur views on the thread :)

#SJSEnterprises
Co is lookin for an acq in either South East Asia, Latin America Or Europe, co strategy is to acquire their clients, & produce the products frm B'lore unit, as it can produce much cheaper here n then export maintaining the superiority of the product.

Co targets to take the exports to 25 pct from current 16 pct, by FY25.

Also co expects for their subsidiary Exxotech( which currently has domestic presence only) to start exports for the chromium plated products to other countries as well.

@LuckyInvest_AK wud appreciate u taking a look sir :)