📌 At a Glance
Indo Count Industries Ltd is the world’s largest bed linen exporter from India. It serves top global retail chains and hotels with premium bedsheets and utility bedding. Despite a strong 5-year stock CAGR of 48%, FY25 profit dropped 28% YoY, and margins have shrunk as fast as your old cotton towel.
1. 🎬 Introduction with Hook
“They sell you bedsheets in Target, but their margins are looking like used pillowcases.”
Once a textile market darling, Indo Count is now in a margin contraction loop. Sales grew to ₹4,151 Cr in FY25, but profits slid — thanks to cotton price volatility, freight costs, and debt servicing. The company is trying to fight back with acquisitions in the US and a new plant in North Carolina — but is the strategy just fluff?
2. 🧵 WTF Do They Even Do? (Business Model)
- 🌎 Export-heavy home textile manufacturer (mainly USA)
- 🛏️ Products: bed sheets, bed linen, fashion bedding, utility & institutional bedding
- 🏪 Customers: Walmart, Target, Macy’s, Bed Bath & Beyond, Amazon
- 🏭 Vertically integrated with spinning, processing, stitching & warehousing
- 🛒 Expanding B2C brands + institutional segment (Wamsutta acquisition)
This isn’t “Textile Textiles” — this is premium retail bedding stuff sold across shelves in America.
3. 💰 Financials Overview – Profit, Margins, ROE, Growth
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | ₹3,012 Cr | ₹3,557 Cr | ₹4,151 Cr |
| Net Profit | ₹277 Cr | ₹338 Cr | ₹246 Cr ❗ |
| OPM | 15% | 16% | 13% ⬇️ |
| ROCE | 15% | 18% | 13% ⬇️ |
| ROE | 13% | 14% | 11% ⬇️ |
✅ Sales grew ~38% in 2 years
❌ PAT down 28% YoY
❌ Margin and return metrics are sliding
4. 📊 Valuation – Is It Cheap, Meh, or Crack?
| Metric | Value |
|---|---|
| CMP | ₹291 |
| EPS (FY25) | ₹12.42 |
| P/E | 23.4x |
| P/B | 2.53x |
| Market Cap | ₹5,767 Cr |
| Book Value | ₹115 |
Fair Value Range Calculation:
- FY26 EPS: Assume mild rebound to ₹14–15
- Assign P/E range: 15x–20x (textile average)
👉 Fair Value = ₹210 – ₹300
At ₹291, it’s at the upper band, implying no margin for error.
5. 🔥 What’s Cooking – News, Triggers, Drama
- 🇺🇸 Acquired Modern Home Textiles Inc. (Oct 2024)
- 💸 Bought WAMSUTTA brand from US firm for $10.25 Mn (April 2024)
- 🏭 Setting up North Carolina greenfield unit
- 😷 CEO underwent bypass surgery (Jan 2025)
- 💼 Key IT & retail presidents resigned (July 2024)
- 🌿 Improved DJSI ESG score to 66
So they’re going aggressive on US soil… but internally, management is churning.
6. 🧾 Balance Sheet – How Much Debt, How Many Dreams?
| Metric | FY24 | FY25 |
|---|---|---|
| Net Worth | ₹2,089 Cr | ₹2,278 Cr |
| Borrowings | ₹956 Cr | ₹1,449 Cr ❗ |
| Fixed Assets | ₹1,355 Cr | ₹1,912 Cr |
| CWIP | ₹35 Cr | ₹28 Cr |
- Debt increased by ₹500 Cr in 1 year
- Big capex push (acquisition + new plants)
- D/E ratio: ~0.63 ✅ still okay… for now
7. 💵 Cash Flow – Sab Number Game Hai
| FY | CFO | CFI | CFF | Net Flow |
|---|---|---|---|---|
| FY24 | ₹146 Cr | -₹98 Cr | -₹47 Cr | ₹1 Cr |
| FY25 | ₹394 Cr | -₹485 Cr | ₹105 Cr | ₹14 Cr |
- Operating cash flow rebound in FY25 ✅
- But huge investment outflow = ₹485 Cr capex/acquisitions
- ₹105 Cr financing inflow = more debt or equity lines used
8. 📐 Ratios – Sexy or Stressy?
| Ratio | FY24 | FY25 |
|---|---|---|
| ROCE | 18% | 13% 🔻 |
| ROE | 14% | 11% 🔻 |
| Inventory Days | 275 | 229 ✅ |
| Payable Days | 74 | 46 ❗ |
| Cash Conversion Cycle | 255 | 236 ✅ |
Indo Count improved inventory handling but lost leverage on payables — which means working capital pressure.
9. 💸 P&L Breakdown – Show Me the Money
- FY25 Revenue: ₹4,151 Cr
- EBITDA: ₹534 Cr
- PAT: ₹246 Cr
- EPS: ₹12.42
- Interest: ₹123 Cr ❗
- Depreciation: ₹117 Cr
- Other Income: ₹40 Cr
PAT is down not because they sold less — but because cost of growth has gone up.
10. ⚔️ Peer Comparison – Who Else in the Game?
| Company | P/E | ROE | OPM | Market Cap |
|---|---|---|---|---|
| KPR Mill | 51x | 17% | 19.5% | ₹41K Cr |
| Trident | 44x | 8.3% | 13% | ₹16.3K Cr |
| Welspun Living | 21x | 13.7% | 12.3% | ₹13.9K Cr |
| Vardhman | 16.6x | 9.3% | 12.9% | ₹14.7K Cr |
| Indo Count | 23.4x | 11.3% | 12.9% | ₹5.7K Cr |
Indo Count sits between Vardhman and Welspun in valuation, but has weaker momentum right now.
11. 🧪 Miscellaneous – Shareholding, Promoters
| Shareholder | % (Mar 2025) |
|---|---|
| Promoters | 58.74% |
| FIIs | 10.12% |
| DIIs | 4.96% |
| Public | 26.18% |
✅ Promoters stable
✅ DIIs rising slowly
📉 Public float falling (institutions slowly stepping in)
12. 🎭 EduInvesting Verdict™
What We Like:
- 🛏️ #1 global exporter in bed linen from India
- 🇺🇸 US expansion via Wamsutta + Modern Home
- 🏭 New manufacturing capex in North Carolina = strategic moat
- 💵 Operating cash flows turning around
What We Don’t:
- 📉 FY25 PAT down 28%
- 🧾 Debt jumped ₹500 Cr
- ⚠️ ROE and ROCE trending down
- ❌ Still low dividend payout (<16%)
Verdict: A profitable global textile giant… now facing the cost of ambition. The next 2 years are either make-it-mattress or margin-mattress.
Fair Value Range = ₹210 – ₹300
✍️ Written by Prashant | 📅 July 11, 2025
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