INSUBCONTINENT EXCLUSIVE:
Domestic fund managers managing your money are betting on a smallcap firm that earns its pennies by ensuring you sound sleep at night.
Data
available with Ace mutual fund database shows as many as seven fund houses held the stock of mattress major Sheela Foam in their portfolios
aspirational expenditure have been rising at an exponential pace.
Shares of Sheela Foam have rallied over 60 per cent to Rs 1,670 since its
The scrip hit an all-time high of Rs 1,850 in November 2017
Several brokerages are bullish on the company.
With a market value of Rs 767 crore, SBI Funds Management, UTI Asset Management, ICICI
Prudential Asset Management Company, Kotak Mahindra AMC, Principal PNB AMC, Reliance Nippon Life AMC and IDFC AMC all hold shares of Sheela
SBI Fund Management picked up over 4 lakh shares of the company in August, whereas UTI AMC and Principal PNB AMC bought 795 and 211
ICICI Prudential sold 4,911 shares last month.
Foreign portfolio investor Goldman Sachs India held over 1 per cent stake in the company as
network and pricing power.
The size of the Indian mattress industry that comprises polyurethane foam, rubberised coir and spring mattresses
is estimated at Rs 10,000 crore.
The industry has grown at a CAGR of 8-10 per cent over the past five years amid rising population, rapid
urbanisation, growing disposable income, rising awareness about health issues such as spinal and orthopaedic ailments and growth through
expansion of housing, hospitality and healthcare sectors.
The company has more than 110 exclusive distributors, some 2,750 exclusive retail
dealers and more than 3,500 multi-brand outlets
It exports to 32 countries in West Asia, South Asia, Europe, North America and South America, besides Australia, New Zealand
Factors to watchHere is a list of five things about the stock if strong institutional interest is a cue for you to take a serious look at
Over the past two decades, Sheela Foam has cornered about 20-23 per cent of the organised mattress market, largely through investments in
While My Mattress has already gained scale accounting for 45 per cent of total sales since 2015, the company has also managed to effect a
cumulative 25 per cent price hike over the last two years.
3
and 36 per cent, respectively
Net worth grew 28 per cent CAGR in last five years
Sheela Foam is almost debt free and had debt-to-equity ratio of 0.1 as of March 31, 2018.
4
Other major players are focused on specific regions; Duroflex on south India and niche categories, Springwell on spring mattress while
others like Godrej and Nilkamal have entered the business only recently.
5
The organised mattress market is growing at a faster pace than the unorganised market
It is expected to account for more than 41 per cent of the market by FY2021, Sheela Foam said in its latest annual report
Of the three kind of mattresses, PU foam mattresses account for almost 50 per cent, spring mattresses 20 per cent and coir mattresses 30 per
Being the major player in the organised mattress segment, there are expectations that the company will benefit from this growth.
How
FY19 on better volumes and margins.
Price of the main raw material for the industry, TDI, are in a downslide, as a new plant has become
operational in Sadara (Saudi Arabia) and a BASF plant has resumed operation in Germany
