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Sheela Foam Ltd.

BSE: 540203 Sector: Industrials
NSE: SFL ISIN Code: INE916U01025
BSE 00:00 | 30 Sep 2872.45 43.60
(1.54%)
OPEN

2828.90

HIGH

2883.35

LOW

2807.00

NSE 00:00 | 30 Sep 2872.60 30.10
(1.06%)
OPEN

2848.55

HIGH

2894.10

LOW

2805.10

OPEN 2828.90
PREVIOUS CLOSE 2828.85
VOLUME 358
52-Week high 4054.00
52-Week low 2312.05
P/E 64.75
Mkt Cap.(Rs cr) 14,012
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 2828.90
CLOSE 2828.85
VOLUME 358
52-Week high 4054.00
52-Week low 2312.05
P/E 64.75
Mkt Cap.(Rs cr) 14,012
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Sheela Foam Ltd. (SFL) - Chairman Speech

Company chairman speech

Dear Shareholders

It is my pleasure and pride that I present this Annual Report as Sheela Foam hascompleted 50 years of operations.

Our five-decade growth is an inspiring journey of turning challenges into opportunitiesand setbacks into success. Our evolution from a humble start-up to one of the leadingmattress manufacturers in the world through the flagship sleep solution brand Sleepwellcan largely be attributed to the core values and guiding principles of Sheela Foam.

As the world economy was gradually putting the COVID-19 pandemic behind with thelifting of restrictions and recovery in economic activities and consumer sentimentsanother shock struck. The Russia-Ukraine conflict has become a humanitarian crisis and setback the economic recovery. Commodity prices remain volatile at elevated levels andsupply chain disruptions have worsened. Inflation pressures have heightened acrossgeographies and central banks are aggressively tightening liquidity conditions.

Notwithstanding the prevailing uncertainties the fundamentals of the Indian economyremain strong. Barring the short-term challenges such as increase in fuel and freightcosts container shortage and logistical constraints the long-term outlook seemspromising. Thrust on infrastructure development improvement in the rural economy greaterfocus on policy implementation and growth in real estate and railways will accelerateeconomic recovery and boost demand.

Our robust operations technical competence and solid brand reputation place us on ahigh growth trajectory. We continue to embark on innovation superior design andhigh-quality products that personify excellence. Our core strength of research-ledinnovation provides an unmatched value proposition for consumers in both premium andeconomy segments. We are also benefiting from changing consumer preferences towardshigh-quality branded household products as they have become more conscious about theirhealth and hygiene. Consumers perceive home comfort products as a necessity and arewilling to invest in ones that guarantee enhanced comfort and sleep along with rightquality. The new work-from-home culture has also prompted a shift in consumer behaviour asthey spent more hours at home and demand a soothing environment and finest wellnessproducts.

PERFORMANCE REVIEW

Our net revenue from operations in FY 2021-22 on a consolidated basis increased to Rs3061 crore from

Rs 2487 crore in FY 2020-21 registering a growth of 23%. Consolidated net profit aftertax decreased to Rs 219 crore from Rs 240 crore in the previous year due to increased costof raw material across the globe. On a standalone basis net revenue from operations stoodat Rs 2195 crore as against Rs 1741 crore in FY 2020-21 registering a growth of 26%.Profit after tax for the year increased to Rs 197 crore from Rs 181 crore in the previousfiscal registering a growth of 9%.

Net revenue from operations from Australia in FY 2021-22 decreased to AUD 77.56 millionfrom AUD 81.08 million in FY 2020-21. Net profit after tax decreased to AUD 2.66 millionfrom AUD 4.84 million in the previous year. The net revenue from operations from Spainincreased to Euro 51.18 million in FY 2021-22 from Euro 39.75 million in FY 2020-21 whilenet profit decreased to Euro 2.19 million from Euro 4.09 million in the previous fiscaldue to increased cost of raw material.

All our subsidiaries continue to do well. Australia which was impacted in the firsthalf of the year has made a strong recovery with relaxations in restrictions and openingup of economic activities. As far as Spain is concerned it has always remained strong andoffers multiple growth opportunities with little impact of COVID-19 pandemic on thecountry and its people.

As you all are aware that we have new projects lined up across all the threegeographies - India Australia and Spain. We have a large project coming up in JabalpurMadhya Pradesh through our wholly-owned subsidiary International Comfort TechnologiesPrivate Limited. We intend to manufacture mattresses and pillows for all the segments ofthe society including underserved markets of Tier III and IV cities. Production of thisunit is expected to commence by the end of 2022.

This facility is expected to be a game-changer in the modern mattress industry.Firstly because of the market that intends to cater to and secondly because thetechnology that has never been used in India before. It is a revolutionary and uniquetechnology which will facilitate both affordability and availability.

We have a new upcoming plant in Adelaide. This is the second foaming unit with newerand modern technologies and is expected to commence production in October 2022. There isalso a substantial expansion planned in Spain which is expected to come on stream inJanuary 2023. As it had been mentioned earlier our Company in Spain is a very small partof the largest foam market and with the proposed capacity expansion it will steadilyachieve higher revenue and profits.

Our exports are scaling up as we continue to market and sell higher volumes oftechnical foam and mattress. Company is addressing the issue of freight which is a causeof concern nowadays due to pandemic and Ukraine war. We continue to drive sales of PE Foamproducts on account of increasing customer preferences. This will also help us retain ourcomfort foam customers.

GROWTH IN E_COMMERCE

The pandemic has made people wary of stepping out of their homes and has given a hugefillip to e-commerce. Modern mattress players are shaping new strategies to help consumersbuy mattresses from the comfort of their homes. Our e-commerce business has progressedwell and registered the revenue of Rs 85 crore and a growth of 55% over the previous year.Innovative products such as Personal Protector coupled with the regionalisation ofcommunication will further boost growth. SleepX our e-commerce mattress brand banks onthe solid reputation and promise of Sleepwell. SleepX is bound to ride the e-commerce andonline retail boom and take the organisation to newer heights.

BUSINESS OUTLOOK

Going forward despite the macroeconomic disruptions our outlook on the furniture andmattress industry remains quite strong owing to the favourable demographics risingaffluence in the Indian population and growth in end-user industries such as housingautomobile hospitality and healthcare. Per capita consumption of foam is quite lowcompared to other markets which provides ample headroom for growth.

Our six-point strategy will be to differentiate the brand and elevate the comfortquotient for our consumers; follow a segmented approach to tap into white segments in themarket and support growth; regionalise communication to strengthen consumer connect;digitise platforms to generate higher engagement and business; improve consumer experiencewith enhanced in-store service and better conversions and build a wide spectrum ofsolutions to increase consumer connect and growth.

Our key drivers for growth in the coming year will be focussed on our core brands.Capacity expansion in the international businesses will unfold and the opportunity formergers and acquisitions is something that we continue to explore.

We are building an organisation which is future-fit and purpose-driven as we enhanceour focus and strive to integrate the environmental social and governance (ESG)parameters in the business. In the future ESG will form the backbone and cornerstone ofoperations at Sheela Foam.

CONCLUSION

My sincere appreciation to our shareholders partners customers suppliers andemployees for their unstinted trust and support in us. We remain positive about the marketsentiments and are putting our best foot forward to capitalise on the opportunities thatlie ahead and drive growth. As we embark on the next era of our journey our rich legacywill continue to inspire us to deliver greater value for all.

Regards.
Rahul Gautam
Chairman & Managing Director
Sheela Foam Limited

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