Sheela Foam (SFL) Q4 17/18 earnings summary

Executive summary

• FY2017-18 consolidated net revenue reached ₹1,976 crore, up 11.3% YoY; EBITDA was ₹216 crore and PAT ₹134 crore despite GST disruption and sharply higher TDI costs.

• India operations drove growth, while Australian subsidiary Joyce Foam maintained volumes after passing on part of higher input costs; strategy focused on premium customization, economy products and technical foam.

Financial highlights

• Consolidated net revenue rose to ₹1,975.61 crore from ₹1,776.01 crore; EBITDA increased to ₹216 crore from ₹196 crore and PAT to ₹133.71 crore from ₹125.55 crore.

• Consolidated mattress volume growth was 4%, despite subdued demand during GST implementation.

• Standalone net revenue grew 13.24% to ₹1,666.82 crore; PAT rose 13.24% to ₹125.93 crore.

Outlook and guidance

• Full GST implementation and e-way bills were expected to support higher volumes and help organized players gain share from the unorganized market.

• Plans included scaling customized and premium home-comfort products, higher-margin technical PU foam, low-priced rural products, ultra-premium showrooms and SAARC technical-foam exports.

• Management expected TDI prices to normalize as global capacity came on stream; higher EBITDA was linked to this anticipated cost relief.