New Delhi, India — Sheela Foam saw a 14 % increase in sales between 2016 and 2017 despite the impacts of demonetisation in 2016 and a sharp spike in the price of isocyanates in the last quarter of the financial year.
Sheela Foam grows profits in 2017 despite headwinds
The firm had sales of INR 3.98 bn ($ 62 m) in the fourth quarter of its 2017 financial year, which ended on 31 March 2017, and were down slightly from the INR 4.09 bn recorded in the third quarter, which ended on 31 December 2016.
The company made an operating profit of INR 123m in the fourth quarter compared with INR 289m in the equivalent 2016 quarter. This, was due to "abnormally high raw material prices," the company said in its discussion of results. The price of TDI in India, grew from INR 11o/kg in the fourth quarter of 2016 to InR 275 in the first quarter of 2017.
The company added that "post demonetisation, the focus of the company was on market share and growth. Hence, despite substantial increases in raw material costs, the company did not increase the price of its products. This strategy helped it regain its growth momentum."
Looking at complete financial years, in 2016, Sheela had sales of INR 12.65 bn, in 2017 this rose by 14% to INR 14.45 bn, a filing with the Bombay Stock Exchange shows. During the same time, the company's operating profit increased by 16.9% from INR 1.17 bn in 2016 to INR 1.38 bn in 2017.
Sheela Foam is India's largest flexible polyurethane foam maker. It is integrated into bedding manufacture and owns Joyce Foam of Australia and New Zealand.
Currency conversion: XE.com 15 May 2017.