Target: ₹850

CMP: ₹587.70

SJS Enterprises (SJS) is one of the leading players in India’s fast growing Decorative Aesthetics Industry (pegged at ₹4,900 crore, growing at 20 per cent CAGR) catering to 2Ws (45 per cent), PVs (33 per cent) and consumer appliance segments.

SJS has been outperforming the growth of its underlying industry (2W+PV industry by 10 per cent CAGR over FY19-23) led by premiumisation (share of premium products c.10% in FY23 vs. 3 per cent in FY19) and new product/customer addition (through Exotech acquisition).

SJS remains one of the beneficiaries of premiumisation (content increases by 2-4x) in the underlying industry. Recently announced acquisition of Walter Pack India has been strategic in further expanding its product offerings/customer base.

Given the long-standing relationships with its customers, SJS is well positioned to capitalise on cross-selling opportunities and driving higher content.

We expect SJS’s revenue/EPS to grow at 27 per cent/30 per cent CAGR over FY23-26 driven by addition of customers, increase in wallet share with existing and new customers (cross-selling opportunity) and recovery in underlying industry.

We initiate coverage on SJS Enterprises with a Buy rating and a TP of ₹850.

Key risks are delay in recovery of consumer durables demand and continued slowdown in exports.