Sheela Foam Ltd. is a leading manufacturer of mattresses and polyurethane (PU) foam in India. The company was established in 1971 and has since grown to become a major player in the home comfort products market.
| Stock Data | |
| Ticker | SFL |
| Exchange | NSE |
| Industry | BEDDING |
| Price Performance | |
| Last 5 Days | +1.33% |
| YTD | +11.88% |
| Last 12 Months | -30.43% |
*As of 01.09.2023
Company Description:
Product Portfolio: Sheela Foam manufactures a wide range of products, including mattresses, furniture-cushioning material, pillows, bolsters cushions, sofa-cum beds, and other foam-based home comfort products. They also produce technical grades of PU Foam.
Manufacturing Facilities: The company owns and operates 10 manufacturing facilities in India. All of these facilities are used to manufacture home comfort products, while five of them also produce PU Foam. These facilities have a total capacity of 123,000 TPA.
Distribution Network: Sheela Foam has an extensive distribution network that includes over 110 exclusive distributors, more than 3,650 exclusive retail dealers, and over 4,700 multi-brand outlets. As of March 31, 2019, the company also had 337 Sleepwell Worlds, 673 Sleepwell Galleries, and 1086 Sleepwell Shoppes and 1582 Exclusive Mattress Dealers.
Exports: In addition to its domestic operations, Sheela Foam also exports technical foam to several countries, including the Middle East, South Asia, Europe, the United States, Brazil, and Argentina.
Australian Business: Sheela Foam has a strong presence in Australia through its wholly-owned subsidiary, Joyce Foam Pty Ltd. In 2005, the company acquired the business of manufacturing PU Foam and polystyrene products from three Australian companies through Joyce Foam. The subsidiary now owns and operates five manufacturing facilities in Australia.
Financial Results:
Sheela Foam Ltd reported Revenues for Q1FY24 of ₹645.00 Crores down from ₹701.00 Crore year on year, a fall of 7.99%.
Total Expenses for Q1FY24 of ₹598.00 Crores down from ₹661.00 Crores year on year, a fall of 9.53%.
Consolidated Net Profit of ₹43.00 Crores from ₹43.00 Crores in the same quarter of the previous year.
The Earnings per Share is ₹4.41, up 2.32% from ₹4.31 in the same quarter of the previous year.
Key Strengths:
Innovative Product Range: Sheela Foam has a reputation for developing and offering innovative foam-based products. They manufacture a wide range of foam products, including mattresses, pillows, cushions, and furniture.
Market Leadership: The company is a market leader in the Indian mattress and comfort products industry. It owns popular brands like Sleepwell, which are well-recognized and trusted by consumers.
Quality Assurance: Sheela Foam is known for its commitment to quality. They use advanced manufacturing processes and materials to ensure the durability and comfort of their products.
Distribution Network: The company has an extensive distribution network across India, which helps them reach a wide customer base. This strong presence in the domestic market is a significant strength.
Export Opportunities: Sheela Foam has also expanded its presence in international markets, exporting its products to various countries. This diversification provides additional revenue streams and growth opportunities.
Research and Development: The company invests in research and development to continuously improve its products and stay competitive in the market. This helps them adapt to changing consumer preferences and technological advancements.
Brand Recognition: Sheela Foam has built a strong brand image over the years, and its products are often associated with comfort and quality. This brand recognition contributes to customer loyalty.
Key Challenges Ahead:
Competition from the Unorganized Market: The unorganized market poses a significant challenge to Sheela Foam Ltd. as it competes with the company’s products at lower price points.
Acquiring and Integrating Kurlon Enterprises: Sheela Foam Ltd. recently acquired a 94.66% stake in Kurlon Enterprises for INR 2,035 crore. The company will need to integrate Kurlon’s operations and revive its sales to realize the full potential of this acquisition
Market Dependency: The company’s primary focus was on the bedding and comfort product industry, which could make it vulnerable to economic downturns or changes in consumer spending patterns within that sector.
Competition: The bedding and comfort industry is highly competitive, with numerous players both domestic and international. Sheela Foam faced competition from both well-established and new entrants in the market.
Raw Material Costs: As a manufacturer of foam products, Sheela Foam’s profitability could be affected by fluctuations in the prices of raw materials such as foam chemicals, which can be influenced by global factors.