Sheela Foam (SFL) Q4 22/23 earnings summary

Executive summary

• FY23 consolidated revenue was ₹2,873.32 crore, nearly level with ₹2,865.58 crore in FY22; EBITDA and PAT declined amid subdued mattress demand and higher operating costs.

• Growth in technical and home comfort products, capacity investment and easing raw-material prices supported a cautiously positive outlook.

Financial highlights

• Consolidated revenue from operations: ₹2,873.32 crore vs ₹2,865.58 crore in FY22; PAT: ₹203.06 crore vs ₹218.73 crore.

• Consolidated EBITDA: ₹297.3 crore vs ₹314.9 crore; PBT: ₹273.08 crore vs ₹296.36 crore.

• Standalone revenue: ₹2,019.82 crore vs ₹2,008.21 crore; PAT: ₹194.86 crore vs ₹197.31 crore; EPS ₹19.97 vs ₹20.22, adjusted for the 1:1 bonus issue.

• Consolidated CFO was ₹212.01 crore vs ₹197.15 crore; investing cash outflow was ₹268.41 crore vs ₹306.38 crore.

• Consolidated operating expenses included ₹13.22 crore net loss on foreign-currency forward contracts and ₹11.76 crore warranty provision expense.

Outlook and guidance

• Management remained optimistic on growth, citing improving product demand, stabilising supply chains and easing raw-material prices; mattress demand had been subdued by inflation.

• Planned capacity expansion included CAPEX of ₹350+ crore, a new Adelaide plant, 5,000 MTPA additional Spain capacity and mattress production capacity of 20,000 units per day.

• Priorities include economy mattresses, premiumisation, higher-margin technical foam, furniture, automotive and healthcare products, exports and stronger e-commerce penetration.

• New Indian export-oriented plants in Madhya Pradesh and Gujarat, including Jabalpur and Nandigram facilities, were under development; the Jabalpur facility was to commission VPF technology.