Subscribe to Sheela Foam IPO: SPA Research

SPA Research has come out with its report on Sheela Foam IPO. The research firm has recommended to Subscribe the IPO in its research report as on November 28 , 2016.
  • Language
  • App
  • Subscriptions
  • Specials
  • Sign-In
  • Register
GeStepAhead GrowMyMoney IThe Winning Leap SME Special
Moneycontrol

Home » News » IPO » IPO - Issues Open

Nov 29, 2016, 01.26 PM | Source: Moneycontrol.com

Subscribe to Sheela Foam IPO: SPA Research

SPA Research has come out with its report on Sheela Foam IPO. The research firm has recommended to "Subscribe " the IPO in its research report as on November 28 , 2016.

Like this story, share it with millions of investors on M3

Subscribe to Sheela Foam IPO: SPA Research

SPA Research has come out with its report on Sheela Foam IPO. The research firm has recommended to "Subscribe " the IPO in its research report as on November 28 , 2016.

Post Your Comments

Share Cancel

| 1 Comments

(more)

, SPA Research |

SPA Research in its research report on Sheela Foam  IPO.

Sheela Foam Ltd (SFL) is a leading manufacturer of mattresses in India marketed under flagship brand Sleepwell, which holds ~20-23% market share in the organized Indian mattress market. The company manufactures foam-based home
comfort products (65.6% of revenues in FY16) for Indian retail consumers and technical grades of polyurethane foam (PU Foam) for wide range of industries. SFL operates in India through 11 manufacturing facilities having installed capacity of
123000 TPA. In addition to domestic facilities, SFL operates five manufacturing facilities in Australia that exclusively manufacture PU Foamhaving installed capacity of 10500 TPA. The company has pan-India distribution network that consists
of 100+ exclusive distributors, 2000+ exclusive retail dealers and 2500+multi-brand outlets. Its topline and bottomline has registered CAGR of 10.5% and 50.3% respectively between FY13-16.

Outlook&Valuation

Over last two decades, SFL has successfully built a brand that is associated with comprehensive and quality home comfort solutionswhich is reflected in its dominant market share of ~23% in the organized mattress sector. Webelieve that due to dominant market share, SFL is in a sweet spot due to shift to organized sector driven by GST implementation, rising urbanization, increase in disposable income, increase in health related issues of the Indian population and increasing awareness about sleep products. Driven by revenue CAGR of ~8% and improving operating margin due to stable raw material prices and benefit of operating leverage (current capacity utilization is ~35%),we expect it’s earning to growat a CAGR of ~15-20%over FY16-19E.At the upper end of the price band, the stockwill trade at PEmultiple of 27x its FY17E which is reasonable compared to many consumer stocks which are trading at valuation of >30x TTMearnings and given SFL’s leadership position and scope for improvement in return ratios driven by higher
operating leverage.We recommend SUBSCRIBE to the issue with long term perspective.
Buy, Hold, Sell ? Hear it first on M3
Subscribe to Sheela Foam IPO: SPA Research

See all

Get started using your favorite social network

or

Login using moneycontrol ID

Username
Password

Need help logging in? Reset password.

Don´t have an account? Sign Up

Get started using your favorite social network

or

Simply sign up using this short form

* mandatory

UserName*

Username should be atleast 4 character

Password*

Password should be 8 or more characters,
atleast 1 number, 1 symbol & 1 upper case letter

Alert

Your Password should contain
  • 8 or more characters
  • At least 1 number
  • At least 1 symbol
  • At least 1 upper case letter
Confirm Password*
Email
Already have an account? Login