Indo Count Industries Ltd. has reported revenues for FY16 at Rs. 2,213 crores, which is 24 per cent higher than the Rs. 1,782 crores reported during the previous financial year. This also marks outperformance of the country’s textile sector which grew by five per cent in 2015-16.
The growth in the company revenues was on the back of volume growth, expanding customer base, enhanced customer wallet share and increased capacity utilisation following an expansion in bed linen capacity, effective March 2015.
The company’s profit after tax for FY16 at Rs. 265 crores represented a 82 per cent growth over FY15. The company reported profitable growth, wherein its profit growth was substantially higher than the percentage increase in revenue growth.
Enhanced competitiveness
The improvement in Indo Count’s performance was also derived out of tighter operating controls, prudent raw material sourcing, growing capacity utilisation, make-to-order approach, superior product mix and controlled overheads. Of significance is the company’s commissioning of an $8 million effluent treatment plant in February last that resulted in re-use of process water and post-treatment water portability. Besides, the UK and Australian operations became functional during the year under review, strengthening the company’s global footprint.
The company Board has approved a capex plan for expansion in two phases. The capex of Rs. 175 crores in the first phase is for increasing the processing capacity from the current 68 million meters to 90 million meters, setting up a water effluent treatment plant, and for automation of cut and sew and warehousing.
The capex of Rs. 300 crores, to be funded by internal accruals and debt, is for the second phase expansion of upgrading the existing spinning facilities, investments in additional weaving, with specialized looms, and value added equipments for delivery of fashion and utility bedding. This expansion will be completed by March 2018.
Commenting on the 2015-16 performance, Anil Kumar Jain, Executive Chairman, Indo Count Industries Ltd., said: “The performance of the company during the year under review represented a validation of our business model. We are principally in the make-to-order niche of the global bed linen space, marked by enduring relationships with prominent retail brands, a collaborative relationship directed at strengthening their retail success and a clear revenue visibility representing the basis of our capacity investments – a win-win. One of the potent business-strengthening initiatives that we embarked upon in the last financial year was the decision to launch three proprietary bed linen brands across global retail labels. We are enthused by the response these brands elicited and are certain that these can contribute handsomely to our revenues, going forward.”
Indo Count Industries is integrated from the manufacture of yarn at one end to the manufacture of finished made-ups (bed linen) at the other. This extensive integration has made it possible for the company to enhance quality and value addition.
The company product range covers bed sheets (flat sheet, fitted sheet and pillow cases), fashion bedding (comforters, bed in bag, quilts and coverlets, decorative pillows, etc.), utility bedding (mattress pads, protectors and comforters filled with poly fibre), and institutional linen (basic white bedding, duvet covers and shams, etc.).
Nearly 65 per cent of the company revenues are derived from the US, its largest market. Its prominent non-US markets include the UK, Canada, Europe and Australia. The company enjoys long-term relationships with large global retailers. This has translated into large and growing offtake marked by a larger share of the customer’s wallet.
Indo Count is the second largest manufacturer and exporter of bed linen from India and is amongst the top three bed sheet suppliers in the US. It is also the 11th largest global home textiles supplier to the US.