LKP Research's research report on SJS Enterprises
We initiate coverage on SJS Enterprises Ltd. (SJS) with a BUY and TP of ₹1,300 (28% upside). We believe that the company should grow faster than industry on the back of a) premiumization trend - transitioning to 3D dials (2x higher realization), capacitive overlays (2x higher realization), premium logos (20% higher realization), and IML/IMD products (1.5x higher realization), b) new customer additions, and c) maximizing cross selling opportunities. SJS has demonstrated exceptional integration and operational skills by doubling Exotech’s revenues with substantial margin expansion since acquisition, imprinting the same for WPI. Even excluding any impact of cover glass and any acquisition, we expect a net cash balance sheet, strong FCF generation, healthy margins and very strong growth, demanding a solid performance going forward.
Outlook
We expect this gap to narrow as the company delivers on the key points and triggers explained in this report, thereby making a case for re-rating. We initiate SJS with a target price of ₹1,300 (valued at 25x FY27E earnings as compared to current P/E of 19.5x).
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