Indocount Industries, the home textile manufacturer, reported an impressive growth story between FY13 and FY17 - the company's revenue, EBITDA and PAT grew at a CAGR of 16.1%, 44.6% and 67.8%. It marks a transformation for a company that had to go into Credit Debt Restructuring (CDR) in 2008 after the global financial crisis hit the firm at a time it was highly leveraged.
Since then the company focused on transforming its business, moving from yarn into higher margin products in home textiles, and bed linen. The timing was a fortunate one for the firm, launching these products as textile quotas ended in the US, Canada and Europe. The result was that the company saw an expansion in its EBITDA margins from 5% in FY12 to 20% in FY17.
ICIL is now the second largest manufacturer and exporter of bed linen from India, and among the top three US bed sheet suppliers. It ranks eleventh in the world in home textiles.Axis Direct analysts, pointing out the company's low PE, defined the company as "a strong compounding growth story" post its turnaround, and likely to see rapid upgrades in its target share price over the coming FYs. The company's debt situation has also improved substantially, with leverage declining from 3.7x in FY08 to 0.9x in FY15.
Photo: ICIL
