Could you tell us more about the company and share the IPO highlights along with the objective for which you are going into the fresh issue?
Sanjay Thapar: SJS is a unique company. We are in the decorative and aesthetic space. We cater to a lot of end users segments. We have a very strong relationship with all our customers. We have more than 15 years’ relationship with our top 10 customers and that has helped us grow our business. We are financially strong; a zero debt company generating a lot of free cash and two years ago, we set up a brand new plant with a view to grow the business rapidly. That is now paying dividends for us.
Moving forward, we expect strong growth from the segments that we cater to — largely automotive and includes both two-wheelers and four-wheelers. That accounts for about 65% of our sales, of which 35% to 30% comes from appliances. We are very well diversified both in terms of the customers, the product mix and the geographies that we serve. 17% of our sales come from export and we are supplying to many end segments and we see very strong traction moving forward.
What kind of traction are you seeing in the overseas market? What is future growth looking like? How would you look at your growth strategy versus your peers?
Sanjay Thapar: IPO primarily is for Evergraph, one of our investors, wants to diversify some stake and same for Joseph. Moving forward, both Joseph and Evergraph are a part of the promoter group and they will continue to be in the company for the next few years. Joe of course is the promoter and he is driving the whole business.
KA Joseph: Evergraph invested in SJS in 2015. They are a longstanding fund and they thought now the company has matured to a particular level and this is an opportunity to partly encash their investment. Going forward, I am diluting about 5% of my equity and Evergraph a little over 40% probably.
When you say your company is a leader in the area of your business, could you tell us how much market share you hold category wise?
Sanjay Thapar: Let me start with the last part of your question first. In exports, we see very good traction because the products that we make are light and easy to ship across the world. We are quite competitive and we have large marquee customers. We created capacity with an eye to the large market in India and exports. Last year, we finished at about 17% exports and we see that traction continuing. So, that segment of business — both for appliances as well as for automotive — grows very strongly.
CRISIL did a market mapping report where they estimated the size of the Indian market to be about Rs 1,900 crore in India in FY21. Out of this, about Rs 800-900 crore is the chrome plating business. SJS was not playing in this market. We just acquired a chrome plating company which did about Rs 70 crore of sales last year. We are very small in the chrome plating business but for the other businesses that we do in India, we have close to about 15% to 20% market share. Now that market share question is a little difficult to answer because different models use different products and we are not. There are some businesses where we are 100% suppliers and so that is 100% business, but on a blended basis, we have about 20% market share in other products that we do apart from chrome plating.
What kind of demand momentum are you seeing post Covid for your offerings and how do you see that going ahead?
Sanjay Thapar: We see good traction coming back and as I said, we serve appliances and vehicles markets — both two-wheelers and four-wheelers. We see good festive demand. Of course in the backdrop of a chip shortage, there are products in appliances where we do not see much impact of the chip shortage. But the car companies are somewhat impacted but their outlook for the next six months is positive.
On a whole, at SJS we are not much impacted thanks to the product mix that we have across various segments and the traction both in the export markets. We see large demand coming back, especially for the appliance businesses that we have. Automotive demand continues to be a little subdued but the forecast is that it will improve over the next three-four months.