SJS Enterprises Ltd (NSE: SJS) Q3 2026 Earnings Call dated Jan. 29, 2026
Corporate Participants:
Devanshi Dhruva — Investor Relations
K.A. Joseph — Managing Director
Sanjay Thapar — Group CEO & Executive Director
Mahendra Naredi — Group Chief Financial Officer
Analysts:
Chintan Shah — Analyst
Ganeshram Rajagopalan — Analyst
Hitesh Goel — Analyst
Jyoti Singh — Analyst
Vineet Bothra — Analyst
Amid Hiranandani — Analyst
Nitin Agarwal — Analyst
Khush Nahar — Analyst
Prolin Nandu — Analyst
Aditya Khetan — Analyst
Presentation:
Devanshi Dhruva — Investor Relations
Sat. The call is going to start in the next two minutes. He will then hand over to Mr. Sanjay Thapar, our Group CEO and Executive Director, who will walk you through the key highlights from our investor presentation which has been uploaded on the stock exchanges and is also available on our website. Mr. Thapar will cover the industry overview, business performance and the strategic outlook for the company. Following this, Mr. Mahindra Naredi, our group CFO, will take you through the financial highlights and we will then open it up Open the floor for Q and A session. The total duration of this call is scheduled to be approximately 60 minutes.
We will try and complete our comments in about 20 minutes to allow adequate time for questions. In case we are unable to address all questions due to time constraints, please feel free to reach out to us via email and I will ensure responses are provided at the earliest. Thank you once again. I now hand over the call to Mr. Joseph for his opening remarks. Over to you Joseph.
K.A. Joseph — Managing Director
Yeah, thank you Davanshi and good morning. I hope everyone is doing fine in this new year of 2026 and I trust you all had the opportunity to review our results and investor presentation. Share Yesterday the company maintained strong momentum in Q3 of FY26 and delivered its 25th consecutive quarter of outperformance, recording a robust YoY growth of 46% in the automotive business. Building on its leadership position, SGIS continued to outperform the automotive industry across key segments during the quarter. This compares favorably against the industry growth of 15.7% YoY in the automotive, two wheeler and passenger vehicles put together.
Reflecting this strong performance, SJS has reported a consolidated revenue of Rupees 2435.35 million in the Q3 of FY26. With a strong financial base and consistent cash flow, generation, SJS is well positioned to advance its growth priorities. Our focus remains on planned capex in the coverglass segment along with capacity expansion across our Bangalore and Pune facilities. Our strong balance sheet provides the flexibility to efficiently scale operations across businesses while also evaluating selective inorganic opportunities to further strengthen our market presence. Looking ahead, SGIS remains focused on driving long term growth through premium I setting solutions, new product development and deeper engagement with large OEM customers.
The company aims to increase the contribution of new generation products across the two wheeler, passenger vehicle and consumer segments while strengthening its export presence in key international markets. Continued emphasis on technology partnerships, localization and operational efficiency will support sustained growth with a strategy centered on outperforming the industry. Growth while maintaining robust margins. With that, I will now hand over the Call to Sanjay to take you through the business and industry highlights for the quarter. Thank you. And over to you Sanjay.
Sanjay Thapar — Group CEO & Executive Director
Thank you Joe. Good morning everyone. Building on a strong foundation established in the first half of the year, we are pleased to report another quarter of strong operational and financial performance in Q3FY26. The company continued its consistent growth trajectory supported by disciplined execution, premium offerings and accelerating export growth and strong relationships with the customers. Strategic initiatives have been taken over the past few years that have translated into sustained momentum enabling SGS to outperform the underlying automotive industry while maintaining healthy margins and strong cash flows. Key Highlights for the quarter Q3FY26 marked an important milestone for SGS with the company reporting its highest ever quarterly revenue of Rupees 2435.3 million representing a year on year growth of 36.4%.
Our automotive business grew by 46% year on year compared to a 15.7% y oi growth in the automotive industry volumes I.e. two wheeler and passenger vehicles put together so resulting in approximately a three times outperformance of the industry growth. This performance was driven by strong growth in the two wheeler passenger vehicle segments as well as exports and as a result of a strategy focused on premiumization and expanding our customer base. SGS clocked its highest quarterly profitability margin since the IPO with ebitda margins at 30.5% and PAT margins at 18.5%. Notably, I am pleased to share that SGIS has surpassed its full year FY25 PAT within the first nine months of FY26, underscoring a strong focus on bottom line growth and sustained cost reduction initiatives leading to value creation for our stakeholders.
During the quarter we added new EV focused two wheeler customer Rapti, an urban company that is launching its own range of water purifiers. We continue to expand businesses with key customers like Mahindra, Hero, Motocorp, Whirlpool, Samsung, Hyundai, sparkvinda, Mabe, John Deere amongst others. We are progressing well on capacity expansion at our Puna and Bangalore facilities. Puna plant is set up and under commissioning at the moment. Expanding our global footprint remains the core pillar of SGS long term growth strategy. During quarter three of FY26 exports recorded their highest ever quarterly revenue of 283.1 billion rupees growing 146.2% year on year and 22.1% quarter on quarter.
This reflects increasing traction with global customers and strengthening acceptance of our decorative aesthetic products. We are further strengthening our presence in Germany through a sales representative. These efforts will reinforce SGS position as a preferred partner for global OEMs. SGS continues to generate strong cash flows. As of December 31st 25th, the company reported a niche cash position of 2030.1 million supported by healthy operating cash flows. So we generate free cash is close to about 76% of EBITDA. This financial strength provides flexibility to fund capacity expansion, invest in new technologies and pursue inorganic growth opportunities, reinforcing our long term strategic growth initiatives.
We are very excited to announce that SGS has entered into a technology license supply agreement with Boe Veritronics Hong Kong to undertake optical bonding and assembly of automotive display systems for four wheelers in India. Under this arrangement, Boe Valentronics will provide key components and support localization of critical elements such as optical bonding, cover glass and backlight units. This partnership enhances our capabilities not just for cover glass but also as a player offering advanced display solutions, making a foray into a new vertical which is slated for rapid growth. During the quarter, company received several recognitions and awards recognizing our leadership and excellence in financial management.
These recognitions highlight SGS’s commitment to build strong organization, culture, operational excellence and sustainable business practices. As a part of our commitment to sustainability, SGS continues to advance its ESG agenda. During the quarter we launched the Pink Line Initiative, a dedicated production line aimed at promoting women empowerment, inclusion, workplace safety. This initiative will help increase women employment across our operations, particularly for quality inspection roles. We are also in the process of securing a 2 megawatt wind power from DB Renews Private Limited. With this, 80% of the SGS group’s energy needs will be met from renewable sources.
SGS as a responsible corporate, supports education of specially abled children and also provides meal to the needy at orphanages and old age homes. We also contribute to CBCI Society for Medical Education for providing medical aid to the underprivileged. I will now hand over the call to Mahendra, our CFO to walk you through the financial performance. Over to you Mahindra.
Mahendra Naredi — Group Chief Financial Officer
Thank you Mr. Thakur and good morning everyone. I will now take you through the financial highlights for the quarter. Slide 13 to 16 of the presentation provide a snapshot of our consolidated results. Quarter three of FY26 was a landmark quarter for SGS with the company reporting its highest ever quarterly revenue of Rupees 2,435.3 million, registering a strong YoY growth of 36.4%. This performance was driven by robust execution across the two wheeler and passenger vehicle segments. Continued premiumization and a growing contribution from export and new generation products. EBITDA for the quarter stood at Rs 756.4 million reflecting a YoY growth of 56.9% with margins expanding by 396 basis point YoY to 30.5%.
It is important to note that during the quarter there was a one time impact of 18.1 million rupees under Employee Benefit expenses due to the implementation of the new labor codes announced by the Government of India in November 25. Excluding this non recurring impact, underlying operating performance and margin trajectory remain strong supported by favorable product mix, higher gross margins, increased export contribution and sustained operational efficiencies. Profit after tax stood at Rs 450.4 million growing 62.5% year on year with PAT margins at 18.5%. Lower finance costs, disciplined cost management and strong operating leverages contributed to SGS delivering its highest quarterly EBITDA and PAT margins since IPO.
During the quarter new generation products contributed over 23% of consolidated revenue reflecting increasing adoption of advanced aesthetic solutions. Segment wise revenue contribution was 38.8% from two wheelers, 42.3% from passenger vehicles and approximately 19% from consumer and other segments. Providing healthy diversifications. The company continued to generate strong and sustainable cash flows. Free cash flow for the nine month was 975.9 million rupees driven by robust operating performance and disciplined working capital management. As of December 31, 2025, cash and cash equivalent stood at Rs 2098.8 million resulting in a net cash position of Rupees 2030.1 million. This strong balance sheet translated into healthy return metrics with ROCE at 34% and ROE at 19.8%, reinforcing the quality of earnings and capital efficienc efficiency of the business.
For the nine months ended December 2025, consolidated revenue grew 24.1% YY to rupees 6949.5 million. EBITDA increased 37.8% YY to rupees 2072.1 million with margins at 29.3% while PAD grew 44.4% YY to rupees 1229.2 million with margins of 17.7%. Exports remained a key growth driver. Q3 FY26 recorded the highest ever quarterly export revenue of rupees 283.1 million, contributing 11.6% to the consolidated revenue for nine months FY26 export revenue stood at rupees 655.9 million already surpassing the full year FY25 export revenue of rupees 567.9 million. Reflecting strong traction with the global OEMs on the capital expenditure front, capacity expansion and technology led investments remain strategic priorities.
Expansions at the Bangalore facilities progressing well and the new chrome plating plant has been set up and is currently under commissioning. These investments are being funded entirely through internal accruals while presuming balance sheet strength and flexibility. With this, I will now hand the call back to Mr. Thapar to outline our growth outlook.
Sanjay Thapar — Group CEO & Executive Director
Thank you Mahindra. With a strong balance sheet and sustained profitability, SGS enters the next phase of growth with clearly defined priorities and robust execution capabilities. The company’s cash position, strong cash flow generating capability provides flexibility to fund capacity expansion projects including the greenfield chrome plating facility of SGS Decoplast Puna, capacity expansion at the Bangalore plant and the greenfield project of COVID glass and display systems being set up at Hosur. All this is through internal accruals. Expanding the global footprint remains central to our long term strategy. SGS targets increasing export contribution to 14 to 15% of our overall revenues by FY28 driven by deeper penetration in existing markets, entry into new geographies and new businesses from global OEMs.
We are now strengthening our presence in Germany through a sales representative to focus on opportunities in that market. New technology and product innovation will continue to support our growth roadmap. The company is building capabilities in optical cover glass and automotive display solutions in India through its partnership with Boe Baritronics. Our TLA with Boe Baritronics, SGS will not only manufacture cover glass as a new product, but will also do optical bonding and assembly for the automotive to display system. As a result, the future kit value for passenger vehicles will increase to five to eight times as against four to six times of our legacy kit value earlier.
This development will advance our next generation product offerings and increase content per vehicle. Strong OEM relationships and robust revenue momentum position SCS to outperform the industry growth by over 2.5x. As I’ve said earlier, this growth along with disciplined capital allocation, global business expansion and continued focus on operational excellence will create sustained values for our stakeholders. With that, we conclude our remarks and now open the floor for questions.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star n1 on their touch tone telephone. If you wish to remove yourself from the question queue, you May press star and two participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Chintan Shah from JM Financial family office. Please go ahead. Mr. Shah, proceed with your question please. Mr. Shah, are you there on the call? As there is no response from Mr.
Chintan Shah, I’m proceeding.
Chintan Shah
Am I audible?
operator
Yes, sir, you are audible to us. Please proceed with your question.
Chintan Shah
Yeah, hi. So three questions. First of all, congratulations on a very good performance. I had three questions. One was on the COVID glass. Is there any further update? When are we expecting. Expecting revenue to start flowing? Previously you’d spoken about it starting sometime in FY27. So are we sticking to that guidance? Second is regarding the business with Hero Motocorp. Clearly that’s been growing very well for us and right now we were mainly in dials and logos with them. So are we in advanced discussions or have we run further products with them? And the third one is on the consumer durables.
We’ve of course done very well in two wheelers and PVs, but consumer durable is one place where we are yet to see that kind of a turnaround in performance. So any update here? When can we expect some sort of a turnaround and performance? Strong performance, like we are doing another two segments. These are my three questions.
Sanjay Thapar
Yeah, thank you, Jintan. So one by one, cover glass. What I had maintained earlier was that we’ve signed this. We have a plant in Hosur that is set up. The equipment is on order. What I mentioned earlier was that equipment will be installed in FY27 and we should expect to see sales in FY28. As regards Hero Motocop, yes, we were confident that we have the wherewithal to offer products in a very agile manner and of the highest quality standards. Hero Motocorp appreciates that. And we are consolidating our position with Hero Motocorp. And of course, we are in discussions with them for other products that we have.
So as I mentioned earlier, this is a gradual process and as we go along, we will try and tap into what opportunities Hero Motocorp offers for us. Not just for decals and logos, but the other products we have in our portfolio. As far as the consumer business has grown, we’ve grown very well. Maybe it does not show because. The. Plants that we’ve announced that we won business with Whirlpool globally for a plant where we own, we are the only suppliers which supply to that plant. So that traction is growing and we expect that this will increase further. So we grew this consumer business by close to about 7.5% quarter on quarter and we will. This was. Sorry, the. This grew on a yoy basis. We grew this by 7.5% compared to last quarter. And as the volumes ramp up, this should improve further. So we are quite confident that we should continue to do well in the consumer business as we have done in our automotive businesses.
Chintan Shah
Understood. And just one follow up here on the Hero Motocorp side for logos and decals, are we supplying for all the models currently?
Sanjay Thapar
That’s. That’s a private con. We can’t declare for reasons of confidentiality who we supply and what we supply. But as I said, needless to say, we are consolidating our position as a very, very strong supplier for them.
Chintan Shah
All right, thank you and all the best.
Sanjay Thapar
Thank you.
operator
Thank you. The next question comes from the line of Ganesh Ram from Unifi Capitals. Please go ahead.
Ganeshram Rajagopalan
Thank you for taking my question. Congratulations on the strong performance Sanjay Mahendra Devanshi and team. Now, when you grow 3xO industry, I would almost say the industry is probably not the right benchmark to look at anymore. And in that context, if you could kind of give us a sense as to what the contribution from new products or new customers has been this quarter. And given that growth has far exceeded our initial expectations in the previous few quarters and that we have only two months to wrap up this year, are there initial thoughts on how you expect to perform in FY27 vs Industry basis the ramp up that you might have from the different products and new customers?
Sanjay Thapar
So Ganesh, we see strong traction. We are very confident of our growth story. We keep consolidating our position with OEMs, not only in India, but globally as well. We are winning large businesses for new models and we hope to continue that momentum. So what I guided earlier was that this year we will outperform the industry by a factor of 2.5x. We continue to maintain that, yes, we are better, but I would like to ensure that we perform in a robust manner. It’s not just the top line. We have a very, very strong focus on the bottom line to create value for our stakeholders.
And if you see our trajectory for margin expansion that we’ve done over the years, I think we’ve done fairly well on that basis. So this, on a yearly basis, we are now close to about 30% EBITDA margins, which I think are healthy. And we hope to continue that momentum forward.
Ganeshram Rajagopalan
Got it. Would you like to put a number on it Sanjay, as to what you expect it to be. Do you expect to sustain 2x out performance, do you expect to sustain 2x out performance into FY27 etc. Based on the ramp up that you see?
Sanjay Thapar
No. For 26 is what the guidance I gave was 2.5x. We will continue. I mean the traction that we see for premium products and all the new launches that have happened recently. We won very significant businesses which are high value products. So I continue to see ourselves outperforming the market. I would not like to put a number now we are finalizing a plan for the next year. But yes, we are extremely bullish on what our growth trajectory is going to be in the future.
Ganeshram Rajagopalan
Understood. And just my second question is from a cash point of view and value creation point of view, I think earlier you mentioned you were looking at some M and a target probably for some customer acquisitions or access overseas. How is the progress on that? Or are you still waiting and watching and if you could just give us an update on the capacities that you’re putting up, what has been spent so far and timelines and what’s left to be spent. That’s it from me.
Sanjay Thapar
Okay. I’ll answer the question on inorganic and then I’ll hand over to Mahindra to take you through the capacity we are evaluating. So this is a process that takes some time. We have targets in mind. We are reviewing the financials and as I stated many times earlier we focus on inorganic targets which we can add great value to as we’ve done in the past two acquisitions we’ve done so we are in the evaluation phase at the moment and we will make our bids as we go along. So the target was a to have a cash surplus.
So we’ve accumulated sufficient cash and. Hope. To hear from us when we conclude this transaction within the next year. That’s our internal target. Mahindra, if you could elaborate on the capacity.
Mahendra Naredi
Yeah Ganesh. Regarding the capacity, we are adding the capacity for as this depot. Plus we have marked the 100 crore rupees so far we have incurred close to 65 to 70 crore rupees already been incurred. The remaining amount is on progress. The plant has been set up. The factory has been set up. The plant is under commissioning at this moment. So that is going on. Quarter four will be the further will enhance it here. Regarding the capacity addition for SGS Bangalore facility, We mark around 45 crore rupees for that and that is progressing well. By quarter four we Will be complete this expansion cover glass and the display unit.
Mr. Thapar already have informed we marked 40 crore rupees earlier for the COVID glass which is said to be happen between this year and the next year. And further there will be a capex on the display. We are finalizing our plans but probably the abroad number is around twenty twenty five rupees. Will further going to be happen. Currently we are in an ordering phase. This will spill over from current year. To the next year. So that is. That is on the capacity side. We are operating stpl around 95% like we earlier said. Volterbank is running somewhere 75% and SGS which was last year 60, 65% with the increase now we are around 75% capacity utilization.
Ganeshram Rajagopalan
Perfect. Thank you very much.
operator
Thank you Ladies and gentlemen. In order to ensure that the management is able to address all the questions from the participants in the conference please limit yourselves to two questions. The next question comes from the line of Hitesh Goel from Oregon Capital. Please go ahead.
Hitesh Goel
Thanks a lot. First of all, congratulations on a very. Good set of numbers. My first question is on this Mega accounts, can you give us some sense? Because if we look at last quarter versus this quarter, all the major two wheeler customers except for Hero has been taken out from the deck in terms of mega accounts. And you’ve added Samsung, Hyundai, Smart Mind and John Deere as new mega accounts. So what is the criteria of mega accounts? And you know, how do we see.
Sanjay Thapar
It so fundamentally wherever we see a long Runway to growth, the potential that we can offer multiple products basis our initial discussions with them, we classify that. So for want of space on that page you don’t see a lot of logos there. But essentially we continue to grow all our businesses so we have good traction. We are winning new businesses both with existing and with new customers. So wherever we see that there is a potential domestically and there is a large untapped potential domestically and there is a large potential maybe outside India. So those are the accounts where we say are mega accounts where we think that we are, we have a very strong Runway for growth.
So that’s a classification. There is no hard and fast rule in terms of what turnover we will have because our ambition is very large. We intend to be a global supplier. So at the moment, as I mentioned earlier, we have got good success. We are confident that our products meet the quality, cost and delivery requirements of these customers. So we will leverage on that customer relationship and trust to grow these to be much, much higher. So our ambition of course is to be A global supplier with these companies, at least the global companies, so that we have a large chunk of their business.
Hitesh Goel
So just a clarification. So you think that when you put this, say for example Mabe or John Deere as a mega account in this quarter, is that thinking that it can be bigger than Honda at some point in time? Right now Honda would be quite big. Right. So Honda is not part of this mega account. So this is confusing in that sense for us to understand.
Sanjay Thapar
Yeah. So let me clarify. So what is mentioned? This is a quarterly report. So if during the quarter we’ve unearthed some new businesses, new accounts with that customer that is mentioned here, what continues that normal continues. So Honda of course continues to be a very strong customer for us. So this is just an update for this quarter that went by. Okay.
Hitesh Goel
Okay. My second question is on Exotech. So the new plant has accepted, has the revenue started coming and this Q and Q growth in exports, this has come from Exotech or this is, you. Know, Stellantis and wapool from sgs.
Sanjay Thapar
So largely the Stellantis business that we won, which we said is a large business, we will supply across North America, Latin America, Europe. So a few plants have started. This will gain momentum as we go along in this current year as I mentioned earlier, so that growth is there. Exotech has grown very well. This new plant that Mahindran told you is under commissioning at the moment. So next year you start revenues coming out of this. But we are currently sweating the asset that we have and we are on a very, very strong growth trajectory for Exotech or SES Tecoplast now that’s called that.
So new plant has not started as yet. Right. Because you were earlier in the quarter. Last year you had said fourth quarter the building and the plant is ready. The equipment is under commissioning because it’s a complex SCADA based system. So that is under commissioning at the moment. And next year we should see revenues coming out of this new plant as well, supplementing the existing plant that that continues as usual.
Hitesh Goel
And my final question on wpi. So WPI has been static because of consumer billing with subsidiaries starting there and now Tata Motor started reviving. Right. Industry has started reviving there. So should we expect coming quarters to see good growth in wpi?
Sanjay Thapar
Absolutely. So our focus on WPI as I mentioned earlier is there are legacy customers which are very large customers. So the new generation product that we started supplying to from wpi, not just from Tata but also to Mahindra have grown exceedingly well. We have good acceptance and you should see traction going. And we are happy that we are now coming back to the profit levels for the bitter levels that we thought of that business that also is being strengthened very well. So we are very happy with the current state of Wells where all our businesses including deco class and WalterPak now are coming up to speed in terms of our threshold EBITDA margin that we had set up for ourselves internally and that has resulted in the overall, as you see the record EBITDA margin that we have for a company as a whole.
Hitesh Goel
Thanks. Thanks Anjay. And all the best.
Sanjay Thapar
Thank you. Thank you.
operator
Thank you. The next question comes from the line of Jyoti Singh from Arihan Capital Markets Ltd. Please go ahead.
Jyoti Singh
Yeah, thank you for the opportunity. So just wanted to understand like earlier you explained on the WPI side, so where does WPI stand today in term of EBITDA margin versus group average and by when do you expect full margin converges on that front?
Sanjay Thapar
So Jyoti, as I have said many times earlier, think of us as a consolidated company. We don’t share margins by business. Of course SGS is the main company that we have here, but I will not be able to share the number with you. But in terms of an internal benchmarks, we are at Walter Pack today and what we set out to do when we acquired this company. So there’s a very good turnaround that we see in that business and moving forward they will be a strong contributor to the overall growth story for SGS as a group.
Jyoti Singh
Sir, also I wanted to understand this time some differences compared to two wheeler and PV side on the revenue mix that has increased for the PV compared to two wheeler. So are we seeing good order wins on the four wheeler side?
Sanjay Thapar
Absolutely. So on behalf of the complete auto industry, I would say that there’s a very healthy traction in the market. Just to give you an example, Mahindra, which is a key customer for US, launched their two new vehicles and there was a record booking of 94,000 vehicles in four hours of opening. And I am happy to say that SGIS is a very, very strong content in those vehicles. So we hope to benefit from that. So these are new high technology products that are offered to them and they find very good acceptance. And I’ve said many times earlier that when one OEM launches a product it sends the benchmark for the industry and other OEMs follow suit.
So the premiumization story continues to march ahead and you’ve seen that in the new launches that have come from these tables of Mahindra And Tata, which we find very good acceptance in the market. And I’m happy to say that SGS as a group has a strong presence in all those models.
Jyoti Singh
Nice. Great sir. And so just last question on the strong cash side, are we looking actively for any new acquisition or just looking for the existing business to grow?
Sanjay Thapar
No. No. So acquisition is a very integral part of our growth story. So the last four years we’ve acquired two companies and as I said earlier in this call, we look at we have a healthy cash reserve and we used to, we want to deploy it to further propel our business forward and we shall do that. So answering your question, inorganic growth is a very integral part of our growth story and we shall continue down that path.
Jyoti Singh
Great. Thank you so much sir. And just congratulations on the strong execution and consistent delivery with the company unlocking a new level every quarter. So congratulations.
Sanjay Thapar
Thank you Jyoti.
operator
Thank you. The next question comes from the line of Vineet Bhotra from IIFL Capital. Please go ahead.
Vineet Bothra
Hi sir. Congratulations on a very good set of numbers. So I have two questions. First is how SDS Enterprises will get benefit from this Indian EU trade deal. And my second question is in the last quarter as like you mentioned that export revenue will reach around 14 to 15% by FY28. So after this trade deal can we see an increase in the revenue percentage?
Sanjay Thapar
Okay, so thank you for the question. India as a whole, not just scs, is very excited about this EU deal that we’ve done which is classified as the mother of all deals. You know there are a lot of very strong automotive customers and appliance companies that are based in the eu. We have strengthened our sales presence in Europe and the West German OEMs produce parts or produce vehicles and platforms globally. So what I mentioned in my previous earnings call when we announced that we won global businesses from Stellantis, which has now started, we want to repeat that with other OEMs and you have some very marquee names in Europe, especially in Germany which supply parts globally.
So we see strong traction. They like us, they like our parts and they like the agility we demonstrate as a company. So we are extremely bullish that this EU deal would help us access those markets in a much faster manner while we continue our focus on North America. So it’s not that that is out of focus but EU also as I announced specifically Germany is a key area and we set up a strengthen of sales organization there. So we hope to benefit. And I’m not altering the guidance for FY28 as of now. So 14 to 15% is an ambitious target.
I’ll be happy and delighted when we exceed that. We are working towards that. But as a guidance, I will still maintain 14 to 15% of my top line. Revenue should come out of exports by FY28.
Vineet Bothra
Thank you, thank you.
operator
Thank you. The next question comes from the line of Hamid Sriranandani from Philip Capital India Private Limited. Please go ahead.
Amid Hiranandani
Yeah, congratulations team for one more outperformance. Really appreciate this performance regularly. Sir, I have few questions. First is are you seeing any input cost pressures from Q4 onwards and what steps the company is taking to, you know, improve margins from here on?
Sanjay Thapar
So as a company, our DNA is to squeeze inefficiency out of the system by better utilization of assets, by declaring a war on waste, by leveraging our growing sales with our suppliers to get better prices and support our customers. We are helped by the tailwinds that premium products get refreshed. So the new raw material prices are price change every time there is a refresh. So strategically I think we are in the absolute right business and that is what demonstrates our very steady and growing EBITDA margin profile since we got listed. So if you track our history, we’ve been delivering strong margin and we hope to continue to do that in the future as well.
Amid Hiranandani
Any input cost pressures?
Sanjay Thapar
I mean pressures are always there but then we are I think more resilient for the reasons that I mentioned earlier. We have a very, very strong focus on day to day buying that we do on the operating efficiencies that we do on reduction of rejection and scrap. And we have a model of excellence that flows through all our locations. So we’ve expanded margins at Exotech from 12% to now close to about 20% or SES EcoPlast. We’ve increased margins at Waterpac and we’ve of course increased margins at SES. So it’s a secular theme and focus on the bottom line is a key area of focus for SES and will continue to remain so.
Amid Hiranandani
Great. Good to hear, sir. Secondly, any update you want to give on the BoE with respect to the planned setup timelines and any initial soft commitments from customer SOP and the target potential.
Sanjay Thapar
With boe. As I said earlier, the plant is ready, the equipment orders have gone. We expect that during FY27 we should have the plant ready with equipment and Trials complete. In FY28 we should see sales coming out of that plant. We are in discussions with many customers and we see good appetite. There are some positions where we are unique in the country and we have a lot of demand from customers who are talking to us about what we can do with them specifically for color glass. And that is something that we intend to focus on and we are building capabilities and capacities to address that huge opportunity that we see in front of us.
Amid Hiranandani
Right, sir. Lastly, directionally, in what areas we are hunting for mna. Anything on the table at the moment.
Sanjay Thapar
Sorry, could you repeat that question?
operator
Can you hear me? Sorry to interrupt you, Mr. Amit. There are, there are participants, other participants waiting in the queue for, for the follow up question. You may rejoin the queue.
Amid Hiranandani
Yeah, thank you.
operator
The next question comes from the line of Nitin Agarwan from GM Financial. Please go ahead.
Nitin Agarwal
Thanks for the opportunity and congratulations. Following up on the Amit’s question on the margin. So we have maintained the guidance of around 26 to 27% on a steady state basis. But for the last two quarters we have outperformed significantly this quarter. If you just for the 1 of the margin comes around 30%. So do you see upside as to our guidance or do you, would you like to, you know, update your margin guidance going forward?
Sanjay Thapar
Yeah, so if I talk of a past track record, we’ve grown very well and our focus of course will continue to remain there. So yes, we are today operating at about 28, 29% sort of margins. That sort of profile is something that I think we can look forward to.
Nitin Agarwal
Okay, so in the sense that we are going to expand our margin significantly on a steady state basis from here on.
Sanjay Thapar
Yeah, so not just here on. So if you track our margin profile since we got listed on the stock exchange, we have steadily improved margins over the years and I think that’s the direction that we’ve gone to. So from 24.7% in 22, the first quarter that we reported, we are up to 30% over the last four, five years.
Nitin Agarwal
Okay. Okay, that’s it from my sides. Thanks.
Sanjay Thapar
Thank you.
operator
The next question comes from the line of Pranay Roop from Burman Capital. Please go ahead. The line for Mr. Burman has been disconnected. We’ll proceed ahead with the next. Kush Nahar from Electrum pms. Please go ahead.
Khush Nahar
Thank you for the opportunity, sir, and congratulations on a great set of numbers. There are a couple of questions. So first on the display segment, could you elaborate a bit on the opportunity that we see in terms of the entire market in terms of rupee crores, if you can mention the TAM in the auto segment first since that will be our initial segment to which we cater and you know, some color on the asset or the margin profiles if it will be on a company level basis or accretive for us. And secondly, is there any update on the IME products in terms of customer acceptance or customer approval? Because I think that was one of the next gen products that we were prototyping before.
Sanjay Thapar
Yes, Kush. So okay. On the display. So currently we see a very steady transition from small displays to large displays, let’s say from 4 inches or which was only a display for the instrument cluster part to the infotainment which was 7, 8 inches. So the new RFQ that we are getting from customers are for 10.25 12 inches and some cases even 14 inches. So the direction that is the way the market is moving currently we estimate that the size of this market is close to about. I mean of course these larger displays are for the premium models and close to about 30% of the automotive market today uses displays and this display content.
My expectation is by FY 2030, almost 100% of passenger vehicles would use displays in one form or the other. So there’s a huge tailwind for larger displays. Display penetration across models and then percolating down from the high end to the entry level segment as well. Of course the size of the displays will vary. You could have a single display, you could have a dual display. You could also have a pillar to pillar or a three panel display of a much larger size. So there’s a very large market that we see. Our initial estimate is that the size of this market by FY 2030 could be close to about 3000 to 4000 crores.
So that’s the huge potential that exists in the market when you have penetration across the board. And I think strategically we are absolutely in the right area to leverage our existing capabilities for aesthetic parts to be to emerge as a strong player in this segment. There are different elements to it. One is the COVID class. As I said, our ambition is global. So we should be able to do that across the board and for specific customers. Of course assembling the display is going to be a focus area and we have a great partner in boe which is global leader.
So we have the best of both worlds. Strong capability within the SGS group with a strong technology partner globally. So that should be a winning combination where we can play a meaningful role in this market as it evolves. The question was on margins, of course will, as we increase the content of localization, you know, it’s not just the part but also the coating of specialty coatings are required. So there are premium offerings and we hope once we start supplying honestly that is the right time to answer the question on margins. But directionally this will be a high turnover business.
Maybe the margins could be a little lower. But as I said in our DNA we focus on 25% is the threshold that we have for our businesses. So we will move in that direction to see as we get into the localization of these parts, perhaps there will be an opportunity to get decent margins. The inventory turns on this should be extremely high. So ROC of this business will be very good. I don’t know. Mahindra, do we have a map on the inventory turns that the asset turns that we have on this business?
Khush Nahar
Yeah. So these kind of business have a higher asset turn. It should be more than five times. Currently we are operating around two, two and a half times but this business will have more than five times. So like Mr. Thapur said, Roce which is the right way here the higher turn will generate with the higher roce. So in the margin side like Mr. Tharpur said, since we have planned for localization of couple of parts here so margin will be in the direction toward what we are operating currently. Second question on the IME side.
Sanjay Thapar
Yeah. So IME we are customers continue to show interest but then this is a platform strategy that we’ll have to follow. So many customers we’ve given demo samples and we are continuing to engage with them not just in the automotive segment but also for the consumer segment. So I would imagine that they will take their own time to see what models they would like to introduce that. But it should happen sooner than later because it reduces the number of parts for the OEM and it increases the improve the quality of the human machine interface. So this would happen, the interaction would be more when you have a larger penetration of battery powered vehicles.
So all the. We see good traction in all these software defined vehicles and we see that that should be the first entry point for IME and we are in active discussions.
Khush Nahar
Right, thank you. So if I can just squeeze in. One question about the acquisition. So largely we are looking at the geography or particular technology.
operator
Can you hear me Mr. Kush? Please rejoin the queue as there are more participants waiting in. The next question comes from the line of Lokesh Manik from Vellum Capital. Please go ahead.
Khush Nahar
Hi, good morning Mr. Joseph, Mr. Thapar and the team. So my question one was on the on exports. Now this is the second quarter where we are seeing a very strong momentum. So you know, given the global uncertainties, what is the outlook or the confidence that you can give or the visibility that you have that this momentum sustains for the next two to three years based on your feedback you’re getting from the customers or the inquiries or the products that are in ramp up phase. So some sense on that would be very helpful.
Sanjay Thapar
Yeah. So as I’ve said earlier, the product that we supply are not just a replacement of a part supplied by a European or American supplier. These are new technology parts that underwent validation for one year before they approve this. We own the badging. I am talking specifically of Stellantis. So we own the badging for the whole vehicle and it is not so easy to disrupt it. They did their own diligence in terms of what is the value that SES brings to the table. Both have a new technology provider and the cost and the delivery capabilities that we demonstrate.
So we see this, I mean we’ve started supplies now for almost four, five months. We see that more and more plants are on stream to start introducing these parts. So at the moment we don’t see any hiccup at all and we should continue as normal. Supplying to them across the globe, as I said, is North America, Europe and Latin America and those markets continue to perform. And we are adding Europe especially in the background of, I mean we were not waiting for the trade deal to be done with the eu, but on our own. We said that once we had success with a global OEM in global markets for products that we have very strong capabilities on.
It is I think fairly certain that we should be able to make inroads into other OEMs, also global OEMs, so that we can supply to platforms across the world. So we will continue to drive on that strategy. And I think all these challenges that we see in terms of volatility are temporary. We have a sustainable advantage, we are very confident of that and we will continue to drive exports. So. So I maintain that 14 to 15% of our top line in FY28 should come out of exports. And we are reasonably confident that we should be able to do that.
Khush Nahar
Great. So that was very helpful. So my second question is from Mr. Mahindra Ji. So we spoke last time. We were, you know, last year when we announced CAPEX programs, we were sort of expecting a slight pressure on the margins about, you know, 50 to 100 bps. When these capacities come online, they ramp up. So would it be fair to now assume that the margins that we are posting today captures these cost or these costs are still yet to come in? Going forward, how do you see it.
Mahendra Naredi
So regarding the margin, when we start the new CapEx, it is yes, there will be some pressure, but at the same time we are improving our operational efficiencies and covering this cost. So we hopeful that we will maintain the Same margin between 28, 29% in. The, in the coming period.
Khush Nahar
Have they flown in this this quarter’s result or in nine months results? Have they come in or. They are yet to come in. Sorry, the cost of CapEx, the OpEx operational cost of the CapEx have come in this nine months or they are yet to come in?
Mahendra Naredi
They are yet to come in.
Khush Nahar
Okay. They are yet to come in. Okay. Okay. That’s it. From my side. Thank you so much, sir.
Mahendra Naredi
Yeah, thank you.
operator
Thank you. The next question comes from the line of Proline Nandu from Edelweiss Public Alternatives. Please go ahead.
Prolin Nandu
Yeah. Hi team, a couple of questions from my end just on this cover glass opportunity, right? Just wanted to understand that when you say you will ship your first product sometime in FY28, we are talking about the, you know, the COVID glass part of it. Right. Everything else we will assemble. Right. So could you just help us understand when you say you’ll ship your first product, what exactly are you going to ship and what exactly are you going to, you know, add value? Where are you going to add value? In the. The entire display unit.
Right. And you also mentioned that, you know, you are thinking about backward integration and you know, localization of COVID glass manufacturing as well, which maybe so far is imported. So this is also something which is going to be possible sometime in FY28 or this is slightly your medium term target. And last thing on the COVID glass is that the current tie up that we have done right. In the past, we also used to work very cross closely with one of our customers like which is Visteon. So how does that tie up and this tie up, you know, how are they different? Is there any going to be any conflict because of this tie up with some of our existing customers who might already be in this business? So this is the question on you know, the display.
I’ll come back to the second question once I get the answer of this.
Sanjay Thapar
Okay, so let me clarify that the display project that we are setting up will do two things. It will make the COVID glass. It will also do optical bonding of the display which consists of three parts which is the COVID glass, the TFT screen and the backlight unit. So this is what the product mix of this new plant is going to be. Now your question on that we have tied up with boe, which is a very, very strong global player. And our discussions are initially initial discussions with Visteon. So I just want to take you a little back for you to understand this a little better.
So when we started our journey, we had no ambitions to get into a display. We wanted to leverage our printing capabilities and aesthetic part capabilities to supply instead of a dial, a cover glass to the instrument cluster manufacturers. Now Visteon happens to be one of them. There are other global companies like Continental, like Marelli and some Indian companies which do this. So we wanted a transition. But then a lot of customers came to us to say that sir, in addition to this cover glass, can you do the complete display bonding? Because not everybody does will set up facilities to do display even though they own the infotainment and the driver information system for the vehicles.
So we said let us relook at that because the investment in the plant for a cover glass or a display was a little different based on the dust free capabilities that you need to build in that plant. So we took a pause for about six months as I said earlier in my previous calls and we said we don’t want to reinvent the wheel that we invest something and say that okay, now our ambition has changed so maybe we need to do new capex. So we just put it on pause. And what we’ve done in the meantime is that we found a technology partner for the optical display which is doe.
The COVID glass bit remains intact. So our ambition to supply cover glass to Visteon and to all the other instrument cluster manufacturers remains intact. So that’s what I said. This plant will do cover glass and it could possibly supply cover glass to everybody who does displays in India. So that’s our ambition that we want to supply to as many display manufacturers as possible. In addition to that we will do for a few customers we will do the complete optical bonding of the display, that is the COVID glass, the TFT screen and the backlight unit. So this plant will do both these things.
As far as your question on what revenues will come out of this plant in FY28 or 28, we said that we are, we will possibly do both. We will do our first lot of display screens as well and we will do cover class. So our ambition is to do both by that time. That is what we are targeting and we are ordering a new facility that.
Prolin Nandu
We have that is very clear. Thank you so much for that. The second question would be again on the MNA part and the technology tie up that you did right with boa. So between these two. Right. Which are the levers which you will want to, you know, press going forward for the next two to three years and within M and A as well. Right. You have mentioned that you don’t want to buy just for the sake of revenue. There should be some gap within your existing, you know, offering. So can you just highlight which are these gaps? And you know, what you did with HERO was, you know, help out maybe an oem, you know, when the vendor was not going through its best of the time.
Are such opportunities available in the market where, you know, vendor is not going through a great time? Plus, you know, it helps us fill a gap that we are going to, you know, we do not have right now. And at the same time, how do you think about, you know, the technology partnership, like what you did with boe? I mean, do we hear more of those also going forward together with M and A?
Sanjay Thapar
So let me clarify. Currently we don’t see any gap. So, you know, we are end to end design to delivery solution provider. So for the aesthetic and the human machine interface parts that we have, we are fairly comfortable with the product portfolio we have. So the inorganic opportunity is not for filling any gap. It’s primarily for faster access to market. So if I can expand my customer base, leveraging the capability that I have and use that as a gateway, use that inorganic acquisition as a gateway to sell more of my products. Because I have the widest range of aesthetic products in the world.
So we produce close to about 14 different technologies. Not many companies do that. So if I acquire a company which does product one and two, there are another maybe five, seven products that I can sell through that same channel. Because we are talking of the consumer business or we are talking of the automotive business, so that leveraging can happen best in terms of accelerated penetration in a market. And that is the reason for looking at an acquisition. So that’s, that’s what I think. One part of your question. I’m sorry, I lost out. What are the other questions?
Prolin Nandu
You had the technology tie up.
Sanjay Thapar
Yeah, technology. So boe, our ambition to get into displays because this was a new business for us, we had no know how. So we needed a partner who could teach us how to do it. And that is what we find found in boe. And they also have global scale. They have close to about 20% of the global market share. So I am sure we can tap into their buying efficiencies in terms of their expertise and experience that they have to do the right thing. First so we don’t have to reinvent the wheel by experimentation. So that’s the reason why we did the technology trial with Boeing specifically for the display business because that was new for us.
For the other areas, printing, etc. We have more than three decades of, four decades of expertise now and we are quite confident of our capabilities and that’s what makes us globally competitive.
Prolin Nandu
Thank you so much for the answers. All the best.
Sanjay Thapar
Thank you.
operator
Thank you. The next question comes from the line of Aditya Ketan from SM IFS Institutional Equities. Please go ahead.
Aditya Khetan
Yeah, thank you sir for the opportunity. So my question was onto the margin side sir, as you explained to one of the participants that the sustainable margins are around 29%. So today sir, we are standing 29 is what we said. Sorry, just to correct it. So there’s a range 28, 29. I can’t pinpoint at 29. Right. So it could be 28, it could be 29. But directionally, yes, that, that’s the margin that we are aiming at. Yes sir. Correct. Yeah, my question was on to that sir. So when we look at the business, so SJ standalone and Decouplast are still operating at around 70, 75 utilization.
So there is room for volume growth from here on. And considering like these capacities, when they ramp up to peak, the fixed cost absorption would be quite higher. So there should be an incremental run up in the margin from here on. So from the optical displays and so from the COVID glass and automotive displays. Are you witnessing some margin deceleration so we can come up to that 28, 29% margin figures?
Sanjay Thapar
No, no. So we still have to start revenues for the display business. And as I said here, the benchmark is the landed cost of importance parts.
And if we localize we see that there is an arbitrage there which we could play on. So coming back to your questions that so what we are benefiting from is operating leverage. So all the management structures that we have remain the same as the accelerate sales and we see a lot of momentum. So there will be the absorption of fixed cost as you say will be better and better. So this operating leverage at play. So the reason that I have grown from 24% EBITDA to 30% EBITDA last quarter is primarily a result of better product mix, more new technology, new generation products coming in.
So that leads to higher margins. So we are today about 23% of my revenues come from new generation products. We are benefiting from the operating leverage and that is what we clearly See in the margin profile of the company. So we continue to maintain a robust outlook for what EBITDA growth for the company is going to be. And we have a very clear part to how will we achieve our profit goals as a company for the next three, four years. My question was so considering there is room for volume growth and operating leverage further, why are we not stating that the margin guidance upwards of 30%? Why it is only at 28, 29%.
So I would. As a company we are very conservative. So we don’t. So you can see that from how shy we are of taking loans. So we focus very clearly on how can we generate free cash on our own to invest, unlike the philosophy that other companies would have. So we would like to perform or deliver what we commit. So that’s I think how you should think of us at SES that these are guys who honor their promises and deliver what they set out to do. So that’s what we aim at. It’s not to get any accolades in terms of what margin threshold we have.
So that’s a byproduct. So if we work hard at our job and we declare or continue our war on waste, we will hope to, let’s say enrich margins for the company. So that’s the way forward here. I. I can’t give any other answer.
Aditya Khetan
So just one last question, sir. Excluding the Whirlpool and the Stellantis order. So core exports, geographies, how have they. Performed and how much it contributed to the top line? Excluding this Whirlpool and the Stellantis order.
Sanjay Thapar
Why are you excluding Whirlpool challenges? They are part of the export universe, right? I mean they continue to grow. Look, the way the export business runs is that Whirlpool Stellantis is not just one plant. So we won Whirlpool business at one plant. We won business with Stellantis across the world. So they are lighting up plants one by one. So as a customer they are a different location which are buying from us. So we continue to grow that. So as I said, the most important question to ask is that are the products of this company globally accepted? And I can answer that in a strong yes.
So we are very confident. As I said maybe three years ago when we started this journey when people did not understand what are aesthetic parts. So basically we are very focused on creating that lasting competitive advantage because printing is a bad mode. Operation, scale, expertise that we built over the years is not easy to replicate. And especially the inspection of these aesthetic parts, they are very, very stringent aesthetic requirements. So there are natural barriers to entry. So we continue to benefit from that. And globally, I think we are a well recognized company for its quality and its reliability in terms of supplies and quick development.
So we will continue to focus on that to grow business. And the business is growing. Apart from Whirlpool and Stellantis, we are winning businesses. We announced Nissan that we’ve broken into and now we hope to break into more Western European OEMs. So that’s a story that will continue. Got it, sir. Thank you. Thank you.
operator
Thank you. Ladies and gentlemen. That was the last question for today. I would now like to hand the conference over to Devanshi Dhruv for closing remarks.
Devanshi Dhruva
Thank you. Thank you everyone for joining the call. We hope we have been able to address your questions satisfactorily. For any further information, please feel free to get in touch with us. Thank you once again.
operator
On behalf of. Elara Securities India Private Limited. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.