Adverse 2022 batters resilient Sheela

Noida, India – Noida, India’s only listed flexible foam company, made sales of INR29.8bn ($382m) in its 2022 financial year up 22.1% on the same period last year. However, EBITDA across the business fell by 13.5% to INR3.15bn. 

Speaking at an analysts’ conference, CEO Rahul Gautam said the business environment in 2022 ‘has been challenging or even adverse with commodity inflation, forex bouncing around and demand slowing down’.

He added that the continuing heatwave in India, which has led to temperatures reaching 49°C in Delhi and which started in mid-March, led to a change in discretionary spending towards fans and coolers. 

In the company's Australia business, sales rose by 4.9% between the 2021 and 2022 financial years, up from INR4.1bn to INR4.3bn.

All of these reasons conspired to push this business’s EBITDA down 20.3% to INR550m. This compares with INR690 in the equivalent period in 2021. 

Sales at Sheela’s Spanish subsidiary grew by 26.5% between 2021 and 2022, to INR4.3bn. Once again earnings were hit, this time by 74.2%, with EBITDA falling from INR540m in 2021 to INR310 in 2022. 

While the fundamentals of the business remain strong, Gautam said, the company is struggling to fulfil its expansion projects in Australia, Spain and India on time. ‘This is because of the difficulty in getting the right kind of steel,’ he said. ‘But we will be ready for the future as demand recovers.' 

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