Shares of this small-cap stock, a prominent player in India’s mattress and foam industry, have surged following the company’s announcement of ambitious EBITDA margin goals and a robust growth strategy. With plans to expand operations and enhance profitability, the company is signaling strong confidence in its prospects.
Price Variation
During friday’s trading session, Sheela Foam Ltd’s shares reached an intra-day high of Rs. 904.35 per share, rising 5.84 percent from its previous close of Rs. 854.45 per share. The shares retreated from the high and closed at Rs.888 per share.
Management Guidance
Sheela Foam Ltd has outlined its growth expectations across its India and international businesses for the coming years. The India business is projected to grow at an annual rate of 14-15 percent starting in 2025, with the company targeting an EBITDA margin of 15 percent within three years.
Additionally, Sheela Foam aims to achieve a return on equity of over 18 percent by 2027. On a consolidated basis, the business is expected to grow at a rate of 12-14 percent annually.
Internationally, the company holds a 40 percent market share in the Australian market, which is anticipated to experience a modest growth rate of 5-7 percent. In contrast, the Spanish operations are poised for robust expansion, targeting double-digit growth over the next 3-5 years.
Product and Brand Portfolio
Sheela Foam offers a diverse product portfolio that includes polyurethane foams used in automotive, acoustic, and furniture applications; bedding products such as mattresses, pillows, bed sheets, comforters, and mattress protectors; and specialty foams like visco-elastic, high-resilience, reticulated, and sound-absorbing foams.
The company’s products are marketed under various brand names, including Sleepwell for mattresses and comfort accessories, Feather Foam for pure PU foam, and Lamiflex for polyester foam used in lamination.
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Financial Performance
In its recent financial update for the quarter ending September 2024, Sheela Foam Ltd reported revenue from operations of Rs.812.72 crore, reflecting a 32 percent incline from Rs.613.18 crore in Q2 FY24. However, net profits decreased significantly by 79 percent to Rs.9.32 crore from Rs.44.27 crore in the same period.
Shareholding Pattern
As per the October 2024 shareholding pattern, the promoters of Sheela Foam Ltd hold a 65.48 percent stake, while Foreign Institutional Investors hold a 6.60 percent stake. Domestic Institutional Investors and Retail investors hold a stake of 22.30 percent and 5.62 percent, respectively in the company.
Company Overview
Sheela Foam Ltd. is a leading manufacturer of polyurethane foam (PU foam) and bedding products in India. The company has cemented its position as a market leader domestically and internationally, with its flagship brand Sleepwell gaining wide recognition for its mattresses and home comfort offerings.
Written by – Siddesh S Raskar
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