Capitaline

Analyst Meet / AGM 01-Jun-21

Conference Call

Sheela Foam

Current situation remains challenging

Sheela Foam conducted conference call on 31^st May 2021 to discuss the financial results and performance of the company for the quarter ended Mar'21. Mr. Rahul Gautam - Managing Director, Mr. Tushaar Gautam- Director, Mr. Rakesh Chahar – Director and Mr. Dhruv Mathur – CFO of the company addressed the Concall.
Highlights of the Concall

Mattresses business was Rs 210 crore in Q4FY21 compared to Rs 285 crore in Q3FY21 and Rs 171 crore in Q3FY21. For FY21 Mattresses revenue was Rs 745 crore compared to Rs 779 crore in FY20.

Home comfort products business was Rs 12 crore in Q4FY21 compared to Rs 20 crore in Q3FY21 and Rs 12 crore in Q3FY21. For FY21 Home comfort revenue was Rs 50 crore compared to Rs 76 crore in FY20.

Furniture foam business was Rs 72 crore in Q4FY21 compared to Rs 80 crore in Q3FY21 and Rs 62 crore in Q3FY21. For FY21 Furniture foam revenue was Rs 236 crore compared to Rs 272 crore in FY20.

The growth in foam core (Rs 127 crore in Q4FY21 compared to Rs 106 crore in Q3FY21 and Rs 75 crore in Q4FY20) is reflective of the current market situation and the company does not see this to be the trend going forward. For FY21foam core revenue was Rs 334 crore compared to Rs 306 crore in FY20.

Technical foam business was Rs 113 crore in Q4FY21 compared to Rs 113 crore in Q3FY21 and Rs 70 crore in Q3FY21. For FY21 Technical foam revenue was Rs 324 crore compared to Rs 322 crore in FY20.

Average TDI price was was Rs.184 per kg in Q4FY21 compared to Rs. 211 per kg in Q3FY21 and Rs.178 per kg in Q4FY 20

Average POLYOL price was was Rs.206 per kg in Q4FY21 compared to Rs. 216 per kg in Q3FY21 and Rs.116 per kg in Q4FY 20

The downward trend of the raw material has begun and the company expects that for the next couple of months, it should be on the lower end of the of the curve

Inventory has gone up by Rs 63 crore due to hike in raw material prices- TDI and POLYPOL.

Receivables have gone up by Rs 37 crore due to higher revenues in month of March, as SFL reported revenues of Rs 196 crore in March 2021 comapred to Rs 135 crore in March 2020.

Australia and Spain continues to do well growing between 30-45% contributing significantly to Sheela foams topline. As a result the company is begining to invest in facilities there to increase capacities

The company is taking regular price hike in Australia and Spain. In Australia, there is a rise and fall clause with customers which is related to movement in raw material prices. In Spain, the price hike is more erratic compared to Australia because the company is very small player and it operates in a very large market.

IT venture Stacko is doing well

The company has decided not to pay dividend. Given the uncertainty, it thought to prudently control the cash outflows

The company feels current situation remains challenging. Till 15th April most stores were open except in Maharashtra and Chhattisgarh. Presently only 20% of stores are open.

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