SJS Enterprises’ shares plunged more than 11 per cent in early trade on Friday after the company announced a muted performance in the December 2022 quarter on a sequential performance (QoQ). Seasoned investor Ashish Kacholia owns a significant stake in the company.
SJS Enterprises reported a 21 per cent decline in the net profit at Rs 15.71 crore in the December 2022 quarter, which was Rs 199.48 crore in the September 2022 quarter. Its operational revenue declined 9 per cent to Rs 106.37 crore from Rs 116.94 crore during the period under review.
SJS Enterprises clocked a profit at Rs 14.89 crore with revenue from operations at Rs 88.03 crore in the quarter that ended on December 31, 2021 (Q3FY22), marking a decent improvement on a year-on-year (YoY) basis.
However, its profit margins remained under pressure for the recent quarter at 14.8 per cent, which came at 16.9 per cent in Q3FY22 and 17.1 per cent in Q2FY23. On the other hand, the EBITDA margin improved marginally to 26.1 per cent but was down on a QoQ comparison.
Shares of SJS Enterprises tanked 11 per cent to Rs 414 on Friday after the announcement of results, before recovering to Rs 427.90 at 10.40 am. The scrip had settled at Rs 465.70 on Thursday.
SJS Enterprises reported a 31 per cent increase in net profit at Rs 51.87 crore for the nine months that ended on December 31, which was Rs 39.66 crore in the year-ago period. Its operational revenue improved 25 per cent to Rs 326.48 crore during the period under review.
In the media release, the company said that its business continues to grow with some major order wins from key clients including Mahindra & Mahindra, Tata Motors, Toyota, Whirlpool, Electrolux and Royal Enfield. The company has also entered the Latin American market, starting with Columbia.
Among the addition of new customers, SJS has added Foxconn in the electric two-wheeler segment and IFB Industries in consumer appliances.
Marquee Investors Ashish Kacholia owned 13,48,374 equity shares, or 4.43 per cent, of the company as of December 31, 2022, the latest shareholding pattern by the company suggests.
Recently, brokerage firm SMIFS initiated coverage on SJS Enterprises with a buy rating and a target price of Rs 593 apiece. Its target suggests a potential upside of 43 per cent from its day’s low. It believes that the next leg of growth will come from the combination of cross-selling Exotech-SJS products to each other’s clients.
SMIFS have highlighted subdued export markets and uncertain supply chain situation for OEMs as the biggest risks for the company. SJS is a technology-agnostic company with no risk of EV transition, it said.
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