Sheela Foam (SFL) Q4 18/19 earnings summary

Executive summary

• FY19 consolidated revenue rose 7% to Rs 2,141.45 crore; profit after tax was Rs 133.74 crore, broadly level with FY18, as volatile TDI prices pressured profitability.

• Demand and market conditions were subdued, but growth continued in India and Australia; plans include capacity additions, rural-market expansion and e-commerce development.

Financial highlights

• Consolidated revenue from operations increased to Rs 2,141.45 crore from Rs 2,004.45 crore; PBT was Rs 189.43 crore versus Rs 193.49 crore.

• Consolidated PAT was Rs 133.74 crore versus Rs 133.71 crore; total comprehensive income was Rs 132.83 crore versus Rs 133.14 crore.

• Standalone comparable net revenue rose 8.81% to Rs 1,813.76 crore from Rs 1,666.82 crore; PAT declined 1.79% to Rs 123.67 crore from Rs 125.93 crore.

• Standalone other income increased to Rs 31.84 crore from Rs 22.92 crore, including fair-value gains on investments of Rs 6.39 crore and investment-sale profit of Rs 4.18 crore.

Outlook and guidance

• Greater Noida capacity was expanded; Talwada operations were consolidated with additional land purchased, and plans include Erode expansion, starting Sahibabad production and a new North/Central India factory.

• Rural penetration is planned through value ranges Starlite and Featherfoam, expanded dealer networks, franchise Sleepwell Retail 2.0 stores and carpenter/upholsterer training.

• E-commerce initiatives include an own mattress website and SleepX for Amazon and Flipkart; management expects the channel to support future top- and bottom-line growth.

• No FY19 dividend was recommended; profits are to be retained for business reinvestment.