Target: ₹1,311
CMP: ₹1,158.95
Sheela Foam Ltd, established in 1971, is the largest manufacturer of Polyurethane Foams (PU) in Asia Pacific. With a strong foothold in India, the company has secured a dominant position in key industries like mattresses (30-35 per cent), automotive (70-75 per cent), footwear, lingerie, and furniture.
The company’s future growth is anchored to multiple drivers. First, the Union Government’s ambitious plan to develop Vande Bharat Trains opens up significant revenue opportunities. Second, in the Indian B2C segment, the company aims to revolutionise the unorganised mattress market and expand its retail footprint through the M5 brand. Third, the strategic acquisition in Spain in 2019 grants access to the thriving European market and export prospects, while in Australia, the company capitalises on the rising trend of nationalistic manufacturing.
These carefully planned moves, along with ambitious growth targets and a focus on diverse segments and countries, position the company for compelling and sustainable growth prospect.
The growth drivers include emerging Indian B2B opportunities, B2C and D2C product launches, expansion in the Australian furniture and mattress industry and increased exports from Spain to the US. To leverage the prospects, it laid capex worth ₹350 crore, guided to be operational by H1 FY24.