Buy Sheela Foam; target of Rs 3650: ICICI Direct

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ICICI Direct's research report on Sheela Foam

Sheela Foam (SFL) is the market leader in the domestic mattresses industry with a value market share of ~25% in the organised segment. The company’s “Sleepwell” is one of the leading brands in the domestic mattresses industry. It has a pan-India presence through ~6000 MBOs and ~5500 EBOs, respectively. Apart from India (contributes ~70% to the topline), the company also manufactures Polyutherene (PU)/technical foams in Australia and Spain with revenue contributions of 15% each. SFL has envisaged a capex of Rs 350 crore to increase its consolidated capacity by ~23% in the next two years. Revenue, earnings grew at CAGR of 11%, 13%, respectively, in FY18-22 • Cash surplus balance sheet with last three-year’s average RoE, RoCE of 19%, 22%, respectively.

Outlook

We value SFL at 55x FY24EPS to arrive at a target price of Rs 3650/share.

More Info

At 16:01 hrs Sheela Foam was quoting at Rs 2,999.90, up Rs 61.75, or 2.10 percent.

It has touched an intraday high of Rs 3,032.40 and an intraday low of Rs 2,911.25.

It was trading with volumes of 1,520 shares, compared to its thirty day average of 2,178 shares, a decrease of -30.20 percent.

In the previous trading session, the share closed down 3.12 percent or Rs 94.70 at Rs 2,938.15.

The share touched its 52-week high Rs 4,054.00 and 52-week low Rs 2,213.20 on 13 April, 2022 and 20 September, 2021, respectively.

Currently, it is trading 26 percent below its 52-week high and 35.55 percent above its 52-week low.

Market capitalisation stands at Rs 14,634.35 crore.

For all recommendations report, click here

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Sheela Foam - 200922 - icici