Indo Count Inds.

Indo Count Industries achieved its highest-ever revenue in FY25, growing 16.4% YoY to INR 4,191 crores, with sales volume up 9.8% to 106.4 million meters. This growth was attributed to continued customer trust and leadership in home textiles. However, Q4 FY25 presented significant challenges, with total income declining 5.9% YoY to INR 1,029 crores and EBITDA plummeting 47% YoY to INR 88 crores. This was primarily driven by reduced consumer confidence, uncertainty around potential tariffs, and a product mix shift towards lower to mid-priced offerings, impacting average selling prices by approximately 6%.

FY25 marked a 'transformational' year with multiple capacity and capability-enhancing projects under 'Indo Count 2.0'. The company invested approximately INR 460 crores over the past 12-15 months in brand acquisitions, capacity expansion, and talent. Key initiatives include acquiring the Wamsutta brand, adding Fieldcrest and Waverly to its licensed portfolio, and expanding into utility bedding through acquisitions of Fluvitex and Modern Home Textiles. These investments are aimed at diversifying the product portfolio and strengthening market position.

The utility bedding segment in the US, a $4 billion market, is a key focus. Indo Count acquired Fluvitex and Modern Home Textiles, with annual revenue potentials of $50 million and $35 million respectively. A greenfield project in North Carolina, focused on pillow manufacturing, is also underway with Phase 1 expected to be completed by September 2025, targeting $85-90 million in peak revenue potential. Total investment for Phase 1 is INR 130 crores, with INR 99 crores pending. The utility bedding and new brand segments contributed INR 125 crores to Q4 FY25 revenue, but are currently operating at a loss due to significant upfront investments.

Despite short-term challenges, management reiterated its confidence in doubling revenue to $1 billion by 2028, from approximately $500 million in FY25. This growth is expected to be fueled by the ramp-up of branded and licensed offerings, optimal utilization of the US utility bedding business, and continued strength in core bed sheet operations. The new utility bedding business is projected to contribute $175 million, and the new brand business $100 million to this incremental revenue.

The India-UK Free Trade Agreement (FTA) is expected to significantly boost India's textile exports by eliminating 10-12% duties, making Indian products more competitive. The UK market currently contributes approximately 10% to Indo Count's overall business. Discussions for an India-EU FTA are also ongoing, which could further accelerate growth. In the US, a 90-day pause on tariffs was announced, but an additional baseline tariff of 10% is in effect for all countries except China, which faces compounded tariffs. This fluid tariff situation contributed to market uncertainty^🌐 and the company's decision to withhold FY26 guidance.

FY25 EBITDA margin stood at 13.7%, down 300 bps from 16.7% in FY24, primarily due to strategic investments and weaker Q4 performance. PAT for FY25 was INR 246 crores, lower than INR 338 crores in FY24, impacted by higher depreciation and interest costs (approximately 150 bps). Management expects better flow-through from EBITDA to PAT over the next two years as investments stabilize. Interest costs are projected to be around INR 120-130 crores annually. The company aims to maintain overall margins between 16-17% and expects 15-20% higher margins from the branded segment once stabilized.