Management Meet Update - Sheela Foam - ICICI Direct
Posted On:
2022-06-26 16:37:09 (Time Zone: IST)
Management meet highlights
- The Indian mattresses industry is pegged at ~Rs. 15,000 crore and is growing at a CAGR of 8-10%/annum. Unorganised/regional players dominate the industry with ~60% share in the overall pie
- Cotton mattress, which is used by ~70% domestic population has not been accounted in the mattresses industry. The cotton mattresses are low price end products with higher maintenance cost. The price difference of cotton mattresses and PU foam based mattresses is 2-3x
- SFL aims to increase its domestic market share through adding capacities and new launches in the economy products segments
- The company also sees increased export opportunities in the US markets post US-China trade war. SFL sees increased inquiries from some of the leading players from US under their China +1 strategy. US imports mattresses worth US$ 1.5 billion (bn) from China
- The company envisages a capex of Rs. 350 crore for new facilities in India & overseas. SFL plans to establish a new distribution channel for its economy products in India. The company sees ~3-4x of asset turn on this incremental capex. The capex will be funded through internal accruals
- The company sees improvement in the EBITDA margin over FY23-24E supported by cooling raw material prices and improved operating leverage
- SFL's lower debt level and improved profitability is expected to help drive return ratios over FY23-24E
Shares of Sheela Foam Limited was last trading in BSE at Rs. 2682.70 as compared to the previous close of Rs. 2631.40. The total number of shares traded during the day was 1347 in over 427 trades.
The stock hit an intraday high of Rs. 2699.00 and intraday low of 2657.00. The net turnover during the day was Rs. 3603704.00.
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