I am still not convinced to buy sheela foam at current price. I donot understand why such companies got such high valuation with very little growth.
Anybody can explain, what I am not looking or where I am wrong.
I agree on little to no growth. Only reason for me to track this is two positive triggers which have happened in last few months/year -
- Their buying of KurlOn
- Their stake in Furlenco
This wasnāt delivered by mgmt. Does anyone know if there is commentary by mgmt on this?
SFL will continue to trade at premium valuations given its market share and low public holding. For generating wealth, we need to identify good companies during their bad times. Companies like Sheela Foam (SFL), Hindware, Acrysil, TTK Prestige, etc. are cyclical stocks (home building and home improvement) and hence not doing well at the moment. During the upcycle, each of these will skyrocket.
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Noā¦u have not told about demography of Sheela foam and Kurlon in your postsā¦I was referring to some details in public domain about Sheela foam is strong in North and west, where as Kurlon is strong in south and eastern partsā¦So was looking for your opinion about this spread of business and festive season sales
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None of these are undervalued now though. Fairly valued with decent upside potential, maybe, if one assumes a robust consumption recovery in the near term. There are still no signs of that though. I am interested in Sheela Foam, but yet to be convinced that itās time to get into it in a meaningful way right now.
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Shraddha kapoor( 2nd most followers after Virat Kohli) just posted instagram ad on sleepwell (Shraddha ā¶ on Instagram: "My recent sleep upgrade @officialsleepwellās Pro FitRest mattress! š¤āØ I value quality sleep just as much as I value fitness and my work, and the Pro FitRest mattress has been an absolute game changer. My recommendation if you care about your sleep and muscle recovery as much as I do. And donāt forget to ask your loved ones every morning, āDid you Sleepwell?ā #ProFitRestMattress #Mattress #DidyouSleepwell? #Sleepwell #collab")
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Stock is in support zone of 2017
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Acquisition synergy may start playing out now
PS: Took some position, no reco
Been studying this a bit, and came across this interview. Quite enjoyed it, so sharing.
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Very disappointing result. Management committing but not delivering.
Drastically reduction in EPS.
https://www.bseindia.com/xml-data/corpfiling/AttachLive/8eaeb75a-9aa6-49c1-97f7-b02261b72555.pdf
Anyone attended earning call? Please share your views
Summary of the Sheela Foam Limited Q2 FY25 Earnings Conference Call (October 30th, 2024):
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Not attended any such call however providing summary of what has been provided over legitimate screeners.
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1. Acquisition of Kurlon
- The acquisition of Kurlon, finalized in October 2023, has been smoothly integrated into Sheela Foamās operations. The integration included aligning operational models and optimizing distribution channels. Although both companies operate in the mattress industry, some differences in their business strategies needed to be addressed.
2. Financial Performance
- Standalone Results:
- Revenue: ā¹602 crore, up 42% YoY.
- EBITDA: ā¹70 crore (12% margin), up 54% YoY.
- Net Profit: ā¹43 crore, up 12% YoY.
- Consolidated Results:
- Revenue: ā¹813 crore, up 32% YoY.
- EBITDA: ā¹69 crore (9% margin), up 5% YoY.
- Net Profit: ā¹9 crore, down 79% YoY, mainly due to higher interest and depreciation costs from the Kurlon acquisition.
3. Growth Strategies
- Expanding in branded mattresses, particularly through Sleepwell and Kurlon, with branded mattresses contributing over 50% of total revenue.
- Increased stake in Furlenco to 45%, aiming for ā¹500 crore revenue by FY28 in the growing furniture rental market.
- Launched new mattress brands, Tarang and Aram, targeting the economy segment, expected to generate ā¹100 crore by FY26.
4. Operational Highlights
- Achieved ā¹100 crore in annual run-rate savings post-acquisition, through scale efficiencies in raw materials, facility consolidation, and improved distribution.
- Reducing reliance on distributors in certain regions, like Karnataka, to improve margins and reduce turnaround times.
- Running a pilot to sell furniture in select Sleepwell centers, leveraging synergy with Furlenco, with potential for broader expansion.
5. Challenges
- Competition from unorganized players, especially in the economy segment. Sheela Foam is countering this with value-added products like the Fitress mattress, offering warranties and unique features.
- Balancing growth in branded products with profitability in the foam and furniture cushioning segments.
- Managing inventory effectively across its distribution network to optimize working capital.
Overall Outlook
- Sheela Foam Limited is well-positioned for growth in Indiaās mattress and furniture rental markets. The Kurlon acquisition, expanded branded offerings, and strategic investment in Furlenco have strengthened its market position and growth prospects.
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Thereās nothing wrong here. They have interest expenses from their acquisition and, on the other hand, depreciationāwhich was paid upfront but is recorded monthly in the books to leverage tax benefits. This isnāt exactly a deduction.
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India / Asia is a growth market, but large US/ European firms will be setting up manufacturing bases here. Its going to be interesting how Sheela Foam competes at one end with the startups and at the other with these established much larger global firmsā¦
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I think branded mattress manufactures from world in India will increase overall healthy awareness among consumers and it will help to translate business from non-organizing sector to organized sectorā¦ Sheela has good cost controlled manufacturing capability will take benefits of this market share from non-organized sector to organized sector
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Good to hear from mgmt that they donāt see slow down in mattress demand. Hoping that the next couple of quarters shows good pickup in sales due to wedding season.
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Sheela Foamās promoters seem to be actively acquiring equity shares in the company, as per SEBI disclosures. Interestingly, the last major acquisition in 2020 was followed by a rally to an all-time high within a month.
Could this be a sign of bullish confidence from the insiders, or is it just a coincidence?
This post is purely for learning purposes and should not be considered financial advice.
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Could you provide source link of this information
there you go:
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Good read about Sheela form
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Which app is this? @BejgamNishanth