S.J.S. Enterprises Limited

SJS is one of the leading players in the Indian decorative aesthetics industry. They are a 'design-to-delivery' aesthetics solutions provider with the ability to design, develop and manufacture a diverse product portfolio for a wide range of customers primarily in the automotive and consumer appliance industries. The product offerings include decals and body graphics, 2D appliques and dials, 3D appliques and dials, 3D lux badges, domes, overlays, aluminium badges, In-mould label or decoration parts, lens mask assembly and chrome-plated, printed and painted injection moulded plastic parts. They also offer a variety of accessories for the two-wheelers' and passenger vehicles' aftermarket under our 'Transform' brand. Company's key customers are as follow:- Well-known automotive original equipment manufacturers ('OEMs') such as Suzuki, Mahindra & Mahindra, John Deere, Volkswagen, Ashok Leyland, Honda Motorcycle, Bajaj Auto, Royal Enfield and TVS Motors- Tier-1 automotive component suppliers such as Marelli, Visteon, Brembo and Mindarika- Consumer durables/appliances manufacturers such as Whirlpool, Panasonic, Samsung, Eureka Forbes, Godrej and Liebherr- Medical devices manufacturers such as Sensa Core- Sanitary ware manufacturers such as Geberit. Company manufactures products from modern manufacturing facilities located in Bengaluru and Pune in India, with the facility in Pune acquired as part of the recent acquisition of the Subsidiary. As at June 30, 2021, the annual production capacity of the Bengaluru and Pune facilities was 209.70 million and 29.50 million products, respectively. In the three month period ended June 30, 2021, the Company and the Subsidiary produced 21.27 million and 3.95 million products, respectively, resulting in capacity utilization rates of 10.14% and 13.38% respectively. Further, in Fiscal 2021, the Company and the Subsidiary produced 91.94 million and 15.60 million products, respectively, resulting in capacity utilization rates of 44.07% and 52.88% respectively.  As per financial performance, SJS has posted total income/net profits of Rs.240.76 Cr / Rs. 37.26 Cr (FY19), Rs. 221.27 Cr / Rs.41.09 Cr (FY20), Rs. 255.15 Cr / Rs.47.74 Cr (FY21) and Rs. 75.29 Cr / 9.49 Cr (Q1 FY22). So company has shown growth in net profit, but sales remain almost static. Company has posted an average EPS of Rs. 14.42 and average RoNW of 15.12% for last three fiscals. Issue is priced at a P/BV of 5.16 as per NAV of 105.05 on 30.06.21. As per FY21 earnings on fully diluted equity post issue, asking price is at P/E of around 33 and as per annualised FY22 earnings P/E is 43. As per RHP, there is no listed Peers On BRLM's front, 3 Lead manager are associated with this IPO, and have handled around 65 IPO in last three fiscals. From last 10 IPOs, 7 are opened below issue price and remaining are opened above issue on the day of listing. As of now, 4 are trading above issue price. ( As on 24.09.21) As per financials, company has shown average results, RoNW is 15.15% and P/E is around 33 as per FY21 earnings, which looks fully priced. Company belongs to decorative aesthetics industry and expected to grow at good rate. Performance of BRLM is average. So, we are giving NEUTRAL rating to this IPO and one may apply for long term perspective.

• 1 Evergraph Holding PTE. LTD.
• 2 KA Joseph