Sheela Foam (SFL) Q4 16/17 earnings summary

Executive summary

• FY17 consolidated revenue rose 13% to ₹1,750 crore despite demonetisation and higher TDI prices; EBITDA increased 11% to ₹195 crore and PAT rose 19% to ₹124.84 crore.

• Maiden public listing on NSE and BSE in Dec 2016 marked a strategic milestone; the IPO was an offer for sale by an existing shareholder.

Financial highlights

• Consolidated revenue was ₹1,750 crore versus ₹1,550 crore in FY16; standalone net revenue grew 14.3% to ₹1,445.86 crore.

• Standalone PAT increased 22.6% to ₹110.48 crore from ₹90.15 crore; consolidated PAT was ₹124.84 crore versus ₹104.71 crore.

• Consolidated EPS was ₹25.59 versus ₹21.47; standalone EPS was ₹22.65 versus ₹18.48.

Outlook and guidance

• FY16-21 market outlook: flexible PU foam CAGR 11-12%; mattress industry CAGR 8-10%, reaching an estimated ₹130-140 billion by FY21.

• Priorities include brand-building, broader distribution and online sales, low-cost and ultra-premium mattresses, upholstery growth, and more technical-foam B2B business.

• Vertical Variable Pressure Foaming technology is expected to support foam with 30% lower material density and higher durability; capacity utilisation is expected to improve over coming years.