Indo Count is reckoned the second largest manufacturer and exporter of bedsheets, bed linen and quilts from India and is among the top three bedsheet suppliers to the US. The company has turned in another year of high sales growth with its sustainable business model focused on catering to the changing mindset of consumers. In FY 2015-16, it continued its focus on strengthening its presence in higher value added product segments in the bedding products market.
“I am happy to share that despite the challenging global environment, Indo Count has outpaced the industry with a revenue of Rs. 2,213 crores resulting in 24% growth during fiscal ’16. The highest-ever EBITDA and PAT have shown a remarkable growth of 51% and 82% respectively. This performance could not have been achieved without the single-minded focus on bed linen solutions, innovation in product development and marketing and perseverance in operational efficiency”, commented Mr. Anil Kumar Jain, Executive Chairman, Indo Count Industries Ltd., on his company’s performance.
Indo Count has put in place a two-phase expansion plan to cater to the expected strong demand for home textile products. Phase 1 of Rs. 175 crores is towards increasing processing capacity from the current 68 million meters to 90 million meters, setting up a water effluent treatment plant, automation of cut and sew and warehousing, and Phase 2 of Rs. 300 crores is towards upgrading the existing spinning facilities, investments in additional weaving (with specialized looms) and value-added equipment for the delivery of fashion and utility bedding.
Keeping in view its global ambition and reach, Indo Count has revamped and launched a new branding and communication exercise. The new logo represents its strategic vision and a streamlined process of the development, manufacture and performance of its products. The new brand signature represents its brand promise – to bring COMPLETE COMFORT to the world.
COMPLETE COMFORT is Indo Count’s pledge to its partners and illustrates its commitment to everyone who is touched by its products and operations. The new identity is a reflection of the company’s global operations and aspirations with its modernity and universality of representation.
Indo Count has showrooms and design studios in major markets to have direct access to the consumers’ voice and better understand their needs. The company has also expanded its product portfolio to provide end-to-end solutions. Entry into fashion bedding, utility bedding and institutional linen not only allowed the company to address a market bigger in size than just sheet sets but also created an opportunity for it to meet different consumer needs.
During the financial year under review, on a standalone basis, Indo Count achieved a revenue of Rs. 2,070.78 crores as against Rs. 1,679.95 crores in the previous year, thereby registering a growth of 23.3 per cent. EBIDTA for the year was Rs. 452.92 crores, representing a growth of 50.3 per cent.
The net profit for the year ended March 31, 2016, increased from Rs. 139.04 crores to Rs. 250.71 crores, showing a remarkable growth of 80.3 per cent.
On a consolidated basis, the company achieved revenue of Rs. 2,212.80 crores as against Rs. 1,781.80 crores in the previous year, thereby registering a growth of 24.19 per cent. EBIDTA during the year grew by 50.97 per cent. Net profit increased from Rs. 145.66 crores to Rs. 264.72 crores, registering a significant growth of 81.48 per cent.
The key ingredients of Indo Count’s growth and pursuit to positively impact people’s sleep experience across the world are as follows:
Continued global expansion: Indo Count’s products are exported to nearly 49 countries across five continents. More marketing and representative offices across the globe are being set up on a regular basis.
Increasing distribution reach through channel expansion: The company sells products through top-of-the-line retailers like Walmart, JC Penney, Target, etc., that have wide presence, as also online through e-tailers such as Amazon under the brand ‘Color Sense’. The company will continue to expand distribution and add channels, especially with the introduction of its own brands.
Showrooms and design teams in leading markets: The company’s showrooms are operational in the US, the UK and Australia. The main objective is to give consumers the brand experience and to incorporate consumer voice and native trends in product design.
Technology absorption: Indo Count’s continuous research and development has provided insights on the key parameters of sheet buying decisions for its consumers. The feel of the sheet is the most important factor for consumers, and the company achieves the perfect feel with its innovative weaving and processing technology.
The company has developed sheets treated with natural extracts which are good for the human skin. The Aloe therapy helps the skin to retain its moisture, thereby keeping it healthy. The sheets are silky and smooth to the skin and are naturally hypoallergenic.
AvoSoft, the natural extract of avocado, helps to protect from odour causing bacteria. It is soft and supple to the skin.
Fiber technology collection: Tetra sheet is an innovative combination of the superior fibers of the cellulosic fiber family which makes sheet exceptionally soft and improves wicking properties and gives a cool touch and unique aesthetic in addition to this gives ultimate comfort to the user.
Mélange sheet is the next level of yarn dyed chambray sheet which gives a unique aesthetic and comfort during sleep as this sheet undergoes a brushing treatment which makes it soft and cozy.
Infinity Cotton: It has increased the range of Infinity cotton from higher thread count to lower also for all the segments, i.e., Good, Better and Best. Infinity Cotton is exquisitely crafted from an opulent blend of long-staple finest cottons in the world in order to get superior yarn with exceptionally soft hand feel, making it world’s best cotton sheets. This superior yarn is spun on slow speed ring frames, so that the yarn surface stays smooth and flawless.
Signature sheet: The company has created a revolutionary sheet which is new to the market by the name of HD Sateen sheet under signature sheet umbrella. It gives exceptionally soft handle with silky sheen to the user. The company did reengineering on the manufacturing process of the sheet development and developed this unique sheet. This sheet is positioned for better to best segment.
Product improvement
- Eco Balance sheet: It’s the next level sheet of sustainable sheet with the combination of organic cotton and PET bottle-based texturized polyester yarn which balance the ecology.
- Neo Fresh: This technology enhances the fabric appearance in terms of wrinkle-free and pilling property which lasts wash after wash. Neo Fresh gives a fresh look with good handle to the fabric with good durability.
Product development: Indo Count has developed various technologies for bed linen product categories. Brushed sheet makes the sheet soft and cozy due to the mechanical brush suading process which stay with sheet for the life time of the product and last wash after wash. Chambray Sheet with enzyme wash is extremely soft, smooth and clean surface for sheer comfort with unique denim inspired chambray look. Also developed are a complete range of fabrics of cotton linen family for “Bed Sheet” as well as “Fashion Bedding”.
Right time to enter domestic market
The US continues to be the largest market for Indo Count and contributes nearly 65 per cent of its turnover. The other major markets for the company are developed countries of Europe, the UK and Australia.
While Indo Count was set up with more than 25 years world textile manufacturing experience, it believes there has never been a better time to enter India’s domestic market. There is now a significantly large market of aspirational customers who are willing to pay the right prices for a premium, comfortable experience that the company can offer.
With its strengths in the premium category, i.e., mid to high, of bedding products, Indo Count is now set to target the domestic market in India and has earmarked an outlay of Rs. 25 crores, for the purpose over the years. The gradual change in Indian consumers mindset towards comfort and luxury, increasing nuclearization of households and higher allocation of spends for home decoration while purchasing new homes are factors that make the domestic market attractive. The company also continues its global expansion with entry into new geographies by planning a foray into the Middle East.
Product mix
In the previous financial year, Indo Count had entered into three new categories of fashion bedding, utility bedding and institutional bedding. It now has the complete bed linen product basket, which is marked by product sophistication, value-addition and quality.
On the fashion bedding side, by appointing designers in the US and the UK it has developed its own collections, which were well received when presented at various trade fairs. The company has made all the necessary arrangements at the factory for delivering quality products in this segment.
For the utility bedding segment, it has launched the entire collection of mattress pads and other utility bedding products. It has also been successful in getting on-board a few large customers in the institutional bedding segment. With this success and progress, it has been able to increase the contribution of these new segments in the overall volumes to 10 per cent and is on track to expand it to 30 per cent in the next three-four years.
Targeting niche consumer segments
In March 2016, the company launched three lifestyle brands – Boutique Living, Revival and the Pure Collection – in the US market. They will be launched next year in other markets.
The three brands are designed keeping different target consumers in mind. Boutique Living is targeted at successful professionals who travel frequently. Revival is targeted at professionals who look for classic detailing with a modern outlook. The Pure Collection is for the health and environment conscious consumer. The company intends to increase its market penetration by launching brands catering to such consumer segments with specific needs.
Future outlook
With the world economy projected to be on a recovery path, notwithstanding the lacklustre fourth quarter of 2015 and initial months of 2016, consumer spending numbers and new home sales are also expected to pick up. The advanced economies as a whole are expected to grow at a faster pace in 2016 and 2017 as compared to 2015. This will lead to greater demand for the company textile products in its key export markets.
Encouraging economic growth prospects for many of the significant emerging economies bode well for the company’s sales in its existing markets and expansion plans into newer markets, such as its home market of India. Given the expectations for stable cotton supply and price scenario, in addition to the ample availability of spinning and weaving capacity, the company does not foresee any major threats to its profitability.
The company has consistently put up a strong financial performance over the last four years while transforming its product portfolio. It has been successful in forging deep relationships with its customers such that majority of its revenues were derived from customers with relationships of five years or over.
The past record of Indo Count’s successful transition from a yarn and textile supplier to a value-added bed linen marketer to some of the most demanding consumers is a clear testimony to its capabilities for faster growth in the coming years.