Sheela Foam Ltd. share price target

In Q1FY20, Sheela foam Ltd. reported sales revenues of Rs 514 cr (up 2% YoY & down 4% QoQ), EBIDTA of Rs 62 cr grew stongly by 23% YoY & 12% QoQ. EBIDTA margin at 12.1 % was back to normal after being subdued in last two quarter due to one off marketing expenses.

Sheela Foam's (SFL) 4QFY19 profit came in 10% below our expectations with revenues remaining unchanged yoy and EBITDA showing moderate growth of 6% yoy. We maintain Hold as demand recovery hopes in 2HFY20 have been priced in. We see SFL's sales volume growth to remain moderate in 1HFY20 as customers shift to lower-priced mattresses. Mass-market products contribute just 20% to SFL's revenue. In...

Mattress sales volume in the past two quarters has disappointed us. Our channel checks suggest that it is unlikely to change soon due to rising competition from both organized and unorganized players. The company's strategy to enter the mass market by launching Starlite may yield results. However, the contraction in the B2B business, which contributes 33% of...

In Q2FY19, Sheela foam Ltd. reported sales revenues of Rs 535 cr (up 10% YoY & 7% QoQ), EBIDTA of Rs 42 cr (down 27% YoY & 16% QoQ) with EBIDTA margin at 8 % compared to 10% in previous quarter. Profit decreased to Rs 22 cr from Rs 31 cr in Q2FY18.

Sheela Foam is expected to be big beneficiary of the shift in taste following urbanization and changing lifestyle. Being one of the top 3 players, SFL would be riding the growth wave due to shift from unorganized to organized segment, product innovation and under penetration.

Revenue growth of 20% YoY was driven by better sales realization (+15%) and slight improvement in sales volume (+4%). We are confident of faster recovery in coming quarters with FY19 profit rising 36% YoY. It will be on the back of: 1) accelerated volume growth in high-end segment, 2) ramp up of mass market brand 'Starlite' and mid-market brand 'Feather Foam' and, 3) EBITDA margin recovery led by lower raw material costs. We continue to like SFL's financial profile which looks attractive with strong growth outlook (EPS CAGR 31% in FY18-20E), Net-cash balance sheet, and 38.6% ROCE by FY20E....

SFL will not receive any proceeds from the Offer and all proceeds from the Offer will go to the Selling Shareholder (Polyflex Marketing Private Limited). The objects of the Offer are to achieve the benefits of listing the...

Sheela Foam is Delhi based is leading mattresses and home comfort solutions manufacturer, with SLEEPWELL being its flagship brand. The company is having 11 manufacturing facilities of which 6 are in India and 5 are located in Australia (through company Joyce Foam). The installed capacity in India is 123,000TPA, Sheela foam also supplies technical grade foam to other companies which carter to diverse industries. The distribution network of company comprises of 200 distributors and 5000 retailers. Sheela foam is promoted by Gautam family and presently led by Rahul Gautam. The...

Sheela Foam Ltd (SFL) is a leading manufacturer of mattresses in India marketed under flagship brand Sleepwell, which holds ~20-23% market share in the organized Indian mattress market. The company manufactures foam-based home comfort products (65.6% of revenues in FY16) for Indian retail consumers and technical grades of polyurethane foam (PU Foam) for wide range of industries. SFL operates in India through 11 manufacturing facilities having installed capacity of 123000 TPA. In addition to domestic facilities, SFL operates five manufacturing facilities in Australia that exclusively manufacture PU Foam having installed capacity of 10500 TPA. The company has pan-India distribution network that consists of 100+ exclusive distributors, 2000+ exclusive retail dealers and 2500+ multi-brand outlets. Its topline and bottom line has...

Sheela Foam Ltd (SFL) is a leading manufacturer of mattresses in India marketed under flagship brand Sleepwell. Issue Open: Nov 29 - Dec 01 2016, Price Band: Rs. 680 - 730