SJS Enterprises Q1 FY27 Results (NSE: SJS)
Signal: Margin expansion
The read
The operating trajectory strengthened, with consolidated revenue growth accelerating to 33.5% YoY from 29.4% in Q4FY26 and EBITDA margin expanding to 30.6% from 27.0% YoY, but the 27954 million exceptional gain from the land-and-building sale makes the 22.4% PAT growth a poor measure of recurring earnings; the key test is whether the 30.6% margin can persist without the one-off.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹26,099.8 Cr | +33.5% | +24.5% |
| EBIT | ₹6,820 Cr | N/A | |
| Net profit | ₹7,418 Cr | +22.4% | |
| EPS | ₹23.18 | +115.8% | |
| EBIT margin | 30.6% |
P&L walk
Consolidated revenue increased to 260998 million, +33.5% YoY and +24.5% QoQ, while EBITDA margin expanded to 30.6% from 27.0% YoY; lower raw-material intensity and employee and finance costs supported operating profit, but reported PAT included a 27954 million exceptional asset-sale gain.
Segments
The filing identifies a single operating segment, but the standalone-to-consolidated gap is material: standalone revenue grew 17.6% YoY to 145532 million versus consolidated growth of 33.5% to 260998 million, indicating subsidiaries supplied a substantial portion of incremental growth.
Key positives
- Consolidated revenue reached 260998 million, +33.5% YoY and +24.5% QoQ, accelerating from +29.4% YoY in Q4FY26.
- Gross margin expanded 600bps YoY to 55.9% as raw-material cost fell to 44.1% of revenue from 50.1%.
- EBITDA margin expanded 360bps YoY to 30.6%; employee cost declined 2.6% YoY and finance cost declined 39.9% YoY while revenue grew 33.5%.
- The proposed purchase of the remaining 9.9% of WPI for 199.22 million would make the automotive functional-parts subsidiary wholly owned; WPI reported FY26 turnover of 1668.96 million.
Key concerns
- Reported PAT of 74180 million includes a 27954 million exceptional gain, equivalent to 29.2% of consolidated PBT; recurring PAT growth is therefore materially less clear.
- Standalone revenue growth of 17.6% YoY trailed consolidated growth of 33.5%, leaving the group increasingly reliant on subsidiaries for incremental growth.
- The company approved investment of up to 1000 million in a new wholly owned subsidiary, but its business plan and expected returns were not disclosed.
- The proposed WPI acquisition is a related-party transaction because the seller is a WPI whole-time director, although the filing states it is at arm's length.
Earnings quality: includes an exceptional item
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