Sheela Foam (SFL) Q4 19/20 earnings summary

Executive summary

• FY20 consolidated revenue rose to ₹2,173.63 crore from ₹2,141.45 crore; PAT increased to ₹194.29 crore from ₹133.75 crore, while COVID-19 lockdown halted sales late in Q4.

• Mattress sales volume grew 20% for FY20; volumes were tracking 24% higher before the pandemic, despite lower foam selling prices.

Financial highlights

• Consolidated revenue from operations was ₹2,173.63 crore vs ₹2,141.45 crore; profit before exceptional items, finance charges, depreciation and tax was ₹340.40 crore vs ₹238.58 crore.

• Consolidated PAT was ₹194.29 crore vs ₹133.75 crore; EPS was ₹39.83 vs ₹27.41.

• Standalone revenue was ₹1,754.77 crore vs ₹1,813.76 crore; PAT rose to ₹165.51 crore from ₹123.67 crore.

• Adjusted for the ₹11.99 crore exceptional write-off of an old fire-insurance claim, standalone PBT was ₹227.14 crore before the exceptional item; reported PBT was ₹215.15 crore.

Outlook and guidance

• FY21 mattress and foam sales were expected to be substantially lower after a lockdown exceeding two months and a slow restart; discretionary demand was expected to recover gradually.

• Recovery initiatives included Sleepwell @ Home, online marketing and health-focused products; management described the medium- and long-term outlook as positive.

• Growth priorities included personalised and lower-priced products, rural reach, wider distribution and exports, advanced production technology, and e-commerce.