Indo Count Inds.

Indo Count Industries Ltd. reported a Q4 FY26 total income of INR1,088 crores, a 1.3% sequential increase from Q3 FY26's INR1,074 crores. EBITDA for Q4 FY26 stood at INR116 crores, growing 13.7% QoQ, with the EBITDA margin improving to 10.7% from 9.5% in Q3 FY26. For the full FY26, total income was INR4,211 crores, a marginal 0.5% increase YoY, while EBITDA declined 20.1% to INR461 crores, resulting in an 11% margin compared to 13.8% in FY25. PAT for FY26 was INR127 crores, a 49.2% decrease from FY25, with EPS at INR6.4 per share.

The company focused on three key priorities in FY26: protecting market share, scaling utility bedding and US brands, and scaling non-US revenues. A major milestone was the successful commencement of operations at its North Carolina facility, increasing total US utility bedding manufacturing capacity to 31 million pillows and 1.5 million quilts per annum. New business revenues for FY26 reached INR792 crores, with the new business segment contributing INR270 crores in Q4 FY26, annualized to approximately USD30 million. Non-U.S. core business revenues contributed approximately 30% of total core business revenues in FY26.

Indo Count achieved a significant improvement in its ESG performance, with its S&P Global ESG score rising substantially from 45 to 78 over two years, placing it among the top 3 percentile globally in the textile, apparel, and luxury goods industry. This recognition underscores the company's commitment to sustainable growth and responsible manufacturing practices. Additionally, for the sixth consecutive year, Indo Count was honored with the Gold Trophy for the highest exports of bed sheets in the cotton made-ups category, reflecting consistent leadership in export excellence.

Management projects FY27 to be a record year, targeting consolidated revenues of approximately INR5,500 crores, implying over 30% growth from FY26. This includes approximately INR4,000 crores from the core business and INR1,500 crores from the new business, nearly doubling its FY26 contribution. Volume is expected to be in the range of 105-110 million meters, up from 94.1 million meters in FY26. The EBITDA margin is targeted at around 13%, driven by improved demand, normalized US trade environment, and revenue diversification.

The company's net debt as of March 31, 2026, stood at INR760 crores, a reduction of INR200 crores from the previous year's INR960 crores. Long-term debt was INR425 crores, with annual repayments of INR85-90 crores planned for the next couple of years. Indo Count plans a capex outlay of INR250 crores over the next 12-18 months, to be funded 75% by internal accruals and 25% by debt. The working capital days remained stable at 121 days, compared to 132 days last year, indicating efficient capital management.

Recent increases in raw material costs, including cotton, energy, and chemicals, are noted, but management expects to pass these on to customers within a quarter. The company's core business margins are expected to be around 15%, with new utility bedding and brand businesses contributing positively to overall margins, targeting 15% and 16-17% respectively. The recent waiver of import duty on cotton is anticipated to create a more level playing field for Indian manufacturers, enhancing competitiveness.

The Q4 FY26 sales volume of 20.5 million meters was impacted by the evolving US tariff situation, which caused volatility in order placements. However, with tariffs normalizing to 10% by February, business is returning to normal levels, and demand is driven by normalized sales rather than inventory restocking. To mitigate volatility, Indo Count is diversifying its revenue streams, with non-U.S. core business revenues contributing 30% in FY26 and targeted to grow 20% in FY27, alongside expansion in utility bedding and branded products.