Indo Count shares surge 10% in weak market after 30% jump in Q3 profit

To expand its utility bedding business nationwide, Indo Count aims to set up a greenfield manufacturing facility in North Carolina, USA to deepen its market presence

Indo Count Share Price: Shares of Indo Count Industries surged 10 per cent to Rs 297 on the BSE in Wednesday’s intra-day trade amid heavy volumes after the company reported a healthy set of numbers for December 2024 (Q3FY25) quarter, with profit after tax (PAT) jumping 30 per cent to Rs 75 crore. The company, the largest global home textile and bed linen manufacturer, had posted PAT of Rs 58 crore in the year ago period (Q3FY24).

 

Total income, including other income, grew 61 per cent year-on-year (YoY) to Rs 1,168 crore from Rs 727 crore in Q3FY24. Fluvitex USA, Inc. and Modern Home Textiles, USA, along with new licensed brands, have started contributing to revenues. The company achieved Rs 100 crore in revenues in Q3; however, increased investments in systems and new hires have led to lower absorption of fixed costs, Indo Count said. The company aspires to double revenues by 2028.

 

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Earnings before interest, tax, depreciation and amortisation (Ebitda) jumped 40 per cent YoY to Rs 165 crore; however, margins contracted 205 bps to 14.2 per cent in Q3FY25 from 16.2 per cent in Q3FY24. Product mix impact along with product promotions to end customer’s impacted margins. This will partly continue in Q4FY25, the company said.

 

On FY25 full year outlook, Indo Count expects to achieve the lower end of sales volume guidance of 110-115 million meters with Ebitda margins in the range of 15-16 per cent. Upfront investments in the team in the US are expected to impact margins by 150-200bps. Further, core bedding business continues to operate in the guided margin range of approximately 16 per cent, the management said.

 

To expand utility bedding business nationwide in the US, Indo Count aims to set up a greenfield manufacturing facility in North Carolina, USA, to deepen its market presence. The global home textile market is mainly driven by demand from the US, which is the largest home textile market.

 

In the medium-term, the management sees tailwinds in the business and it has strengthened its leadership team with key hires to drive growth and bring in the right expertise. The focus is also on expanding the brands and utility bedding business which is expected to be a key driver for the next phase of growth. The management's optimism remains high for the next three years due to the strategic initiatives the company has executed over the last few quarters.

 

The company has acquired the “Wamsutta” brand, and tied-up with licensed brands such as “Fieldcrest” and “Waverly” to expand its branded products segment. CARE Ratings expects revenue contribution from the branded segment to improve in FY26 aiding margin improvement. 

 

At 10:53 am, Indo Count was trading 9 per cent higher at Rs 295, as compared to the 0.62 per cent decline in the BSE Sensex. The average trading volumes on the counter jumped over five-fold, with a combined 3.4 million equity shares having changed hands on the NSE and BSE.

 

However, in the past six months, Indo Count has underperformed the market by falling 21 per cent, as against the 5 per cent decline in the BSE Sensex and 13 per cent fall in the BSE Smallcap index.