I have been using memory foam pillows for a long time now (~2 years). The first pillow I bought did not last more than 7-8 months. It lost its ‘memory’ function i.e. did not regain its shape after being compressed. Then I bought a second one it has served well for more than 1 year now. Its still as good as new. I did not remember which brand I bought it from. After reading this thread, I checked the label today and turns out it is ‘Sleepwell’ 
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A very basic question- while attaching so much value for brand of sleepwell, how much of sales comes from branded mattress and related products and how much from generic foam. I suspect majority of sales is from foam not branded products. Tried to find break up but seems it is not disclosed seperately.
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Between FY 2013 to FY 2015, sales increased continuously but the OPM kept falling, touching low of 6.4% in FY 2015. Net profit fluctuated from Rs 30.85 crore in FY 2013 to Rs 27.84 crore in FY 2014 and then rose to Rs 42.67 crore in FY 2015. However, there was a sharp rise in profit in FY 2016 due to almost doubling of the OPM from 6.4% in FY 2015 to 11.4% in FY 2016.
Do we know the reason behind the sharp rise in profit in FY2016? Lower crude prices?
Yes, check @abhishek90 's post above - The EBITDA margins have consistently increased from 6 odd % to 13% in H1,17. There are two reasons for this improvement. One is the change in product mix and the other is lower crude prices - its main raw material. Hence, these are not sustainable margins. Taking sustainable margins to be around 8%, company would have made 67 cr (approx) and not 105 cr. Based on that, 4.8 cr (no. of shares) would yield a sustainable EPS of 14rs. The stock is offered at a PE of 52 (FY 16 earnings)!!
Even if one considers that the sustainable margins at EBITDA level are 10%, one gets 18.28 as FY 16 EPS. The stock is offered at a PE of 40 (FY 16 earnings).
Giving a PE of 40+ for a business which is partly B2C and partly B2B?? 65% of its total sales comes from B2C channel.
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I was looking at Sheela Foam yesterday. I feel the price is very high compared to the growth the business might have in next few years.
As per the analyst call report May 2017, the B2B business hasnt seen any volume growth, and no growth is expected as well - which leaves the onus of growth on the remaining 65% of the business. Not sure about prices in B2B, but given general nature of B2B businesses, it would be more or less constant in terms of margins.
Even if the remaining B2C grows at 15% per annum for next 5 years, overall PAT growth will be just 10% CAGR. This is too low for a 50 PE currently.
They have also spoke about acquisitions, however not much details are available (except that no borrowings might be required). This could be one factor of a higher growth rate, if anyone has information about this?
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Sheela Foam AGM on 20 July 2017.
Planning to attend it. Any queries?
Sheelafoam is going to face a lot of heat from the Chinese products in all there product range’s.
Take example for their Mattress range starts from 8916 INR. On the other hand you can buy mattress starting from as low as 1500 with 2yr warranty period.
So I think they might struggle to increase there sales and revenue. And at the current CMP the stock is expensive.
Disc: Not invested.
I am शीला Foam retailer and selling branded (century, Kurlon and Sleepwell) mattresses for more than 10 years.
I can’t understand Chinese threat? Can you share more detail?
Now about starting MRP of Rs 8000, I don’t think that as expensive. I belong to tier - 5 town (population 2 lakh) and my average selling price will be approximately 12000.
शीला Foam offer good product, I have faced with one product complaint in last 4 year.
Regarding, valuation I have no idea, neither I am invested.
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Sir can you kindly suggest that which brand is the 1st choice of the customer in terms of pricing and Quality. Which company offers you more % commission on sale. Like to invest in the stock.
There are 3 main brand which has major share of market.
Sleepwell - शीला foam
Kurlon
Century mattresses
All 3 brands are almost equal in product offerings and have marginal differences in prices.
Even margin structure for them is more or less same.
We sold century mattresses for almost 6 years but later discontinued because कंपनी split between two brothers and thus supply affected (this was around 2010).
Reliance has acquired a controlling stake in Kurlon. Thus their focus on MBO channel is distracted.
Sheela Foam distributor who serves my region has been very supportive and thus we have continued with them.
Recently sheela Foam has organized डीलर meet at Ambey Valley and has spent good amount of money on that program.
From customer point of view, almost all brands are good, it’s upto retailer which brand to push
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There are lot of good quality brands that Sheela Foams has to compete with. Some are well known, others not so much. Following are the major brands in Tamil Nadu/South India:
Peps
Sleepwell
Duroflex
Kurlon
Not as many dealers as above but smaller reach:
Nilkamal
Finesse/Springfeel
Sobha (By Sobha Developers)
Mahendra
Not sure what the barrier to entry is in this industry as there are lots of new companies cropping up now and then.
Peps initially launched as spring mattresses brand but they later realized that spring mattress are not that popular so they started selling other other varieties as well.
But their products are costly and they are catering to middle and upper class.
Sleepwell belongs to Sheela foam 
Kurlon - I already said Kurlon and century are as good as Sleepwell
Duro flex - no idea
Nilkamal - one of my friend was selling Nilkamal and he has complaint from few customers, so he stopped selling
No idea about other brands you mentioned.
Regarding, entry barrier are low but brand name and distribution network developed by these companies is difficult to break.
Eg. My distributor carries Sleepwell stock of around 1.5 - 2 Cr. Now assume a new entrant offer him better margin, he suddenly can’t cut away his ties with Sleepwell.
Also both Kurlon and Sleepwell are opening their EBO, thus reducing dependency on retailer.
Sleep solution market is a multi-billion dollar industry in USA and we hardly scratched surface.
Low awareness of benefits of using quality mattress is the reason.
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Any source for this? As far as I am aware Kurlon is controlled by Manipal group.
My distributor has told me about this
Your distributor might be wrong.
Maha Rashtra Apex is a listed company that alone holds 35% in Kurlon Enterprise’s holding company.
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This is beneficial for sheela foams? Any thoughts? Also from my own experience sleepwell is best.
Definitely, opening EBO reduces dependcy on MBO channel
Companies can manage inventory better since EBO gives them accurate picture
EBO Also gives brand premium footprint and thus products are shown in a better way
Opening of EBO Also forces other MBO to stock products of that particular brands
Best example of EBO use will be Raymond,with more than 1000 EBO. They’re planning to go to 3000 EBO in few years
Even my distributor is asking me to open EBO from last couple of years.
I won’t say Sleepwell is best,there are many premium brands such as kings coil etc.
But in medium segment, Sleepwell is among top 3.
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Wonder how GST of 28% for the mattress market affects its business. The rubberised coir mattresses attracting only 18% GST is more preferred by cost conscious customers. However, coir mattresses tend to become uneven if exposed to moisture and gives bad back aches. I had to change my previous coir mattress for a high density foam mattress for the same reason.
Also more showrooms that carry popular brands, less margins for the dealers eventually as the dealers start knocking down the price. Then a new mattress company comes along with better margins and fewer counters to compete with.
I don’t know if they still do it but Kurlon might be the only company that collects a deposit from the retailers to become a dealer. Other mattress companies have to give mattresses on credit to the retailers with 7-15 day payment terms.
Sheela is a play on GST , Unorganized to Organized, Black to white economy
This is what a disrupter does - have a close look how they got Tempur and others under pressure -
Disc: No investment in any mattress company
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