Sheela Foam

Sheela Foam manufactures mattresses and other foam-based home comfort products such as furniture cushioning, pilliows, bolsters, cushions, sofa-cum-beds, under the brands Sleepwell, Feather Foam, Restwell and Lamiflex.

The company posted a disappointing set of numbers for Q4FY17. Consolidated net sales was up 20% (YoY) at Rs.477 crore but a 28% jump in total expenses, led mainly by a 32% increase in raw material costs led to the fall in profits all around. EBITDA was down 37% at Rs.32 crore and margins fell from 12.81% to 6.71%. It ended the quarter with a net profit at Rs.17 crore, down by 45%. As long as crude oil and natural gas prices rule soft, company stands to benefit in the form of lower input costs and hence higher margins. Thus we are now seeing some effects on the margins as input costs increase.

It ended Fy17 with a consolidated net profit at Rs.125 crore, up 19%. Equity is at Rs.25.59 core and EPS came in at Rs.25.59 (FV of Rs.5).

Borrowings stood at Rs.48 crore while trade payables were at Rs.160 crore. Interest costs for FY17 was at Rs.10 crore. Cash was at Rs.209 crore.

The company had gone public in November 2016 and got listed at Rs.860 on the BSE v/s IPO price of Rs.730. Today, quoted at over Rs.1250, clearly shareholders have made a killing on this IPO.