Indo Count: FY26 Flatline, New Business Doubling, Tariff Pause Expires

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1. At a Glance

Indo Count held revenue flat at ₹4,141 Cr in FY26 versus ₹4,151 Cr in FY25—a whisper of motion in a company mid-reinvention.

The core bed-linen export business contracted. Volumes fell to 94 million meters from 106 million meters. Management absorbed tariff penalties to keep customers, a choice that moved PAT down hard: ₹127 Cr from ₹246 Cr, a 48% drop year-on-year.

But new business—utility bedding (pillows, quilts) and heritage brands reborn—clawed up to ₹792 Cr revenue, nearly double the year prior. Margins are still negative in that bucket. By next quarter, management says it flips to EBITDA-positive.

The stock sat at ₹344 on the reference date (June 12, 2026). At that price, the market pays 54x trailing earnings. Peers sit at 24x.

A company transitioning under fire. Execution in the second half will matter more than the press release.

2. Introduction

Indo Count was born in 1988 as a spinning unit and became India’s largest bed-linen exporter—a niche it owns. The company ships to 50+ countries; 69% of FY26 export sales flowed from the United States, where it holds ~20% market share in bed sheets.

Management spent much of FY26 defending this fortress.

In February 2025, the U.S. imposed a 50% tariff on Indian home textiles. Orders that had been placed 60 days in advance suddenly lived in a different cost structure. Some customers cancelled or redirected. Others stayed but demanded the company absorb margin hits rather than pass through prices. Management chose the latter: “a part of the tariff impact was absorbed to protect customer relationships.”

By late February, tariffs reduced to ~10%. Visibility returned. But the quarter was already written.

Elsewhere, management closed acquisitions: it bought Fluvitex USA (81% stake) and Modern Home Textiles (100%) in prior periods, and pivoted hard into utility bedding (pillows and quilts) and branded products under names like Wamsutta, Fieldcrest, and Gaiam. In January 2026, a greenfield pillow facility in North Carolina began operations. In March, CEO Kailash Lalpuria’s office vacated due to extended absence (health). His replacement, Kamal Mitra, stepped in mid-year.

The year was survival and repositioning in parallel.

3. Business Model: WTF Do They Even Do?

Indo Count runs a vertically integrated bed-linen machine. Spinning (140,000 spindles), weaving (320 looms), processing (printing, bleaching, dyeing), made-ups—all in-house. Two plants in India (Kolhapur, Bhilad); capacity 153 million meters annually in bed linen.

Core business (80% of revenue): Bed sheets, pillowcases, fitted sheets, flat sheets, comforters, duvets, quilts. Mostly shipped unbranded to US retailers (Walmart is 20% of revenue alone; top 5 customers are 47%). A replenishment model—retailers order gray fabric for printing and dyeing, and Indo Count holds one month of stock to meet just-in-time schedules.

New business (20% of FY26 revenue): Two legs.

Utility bedding. Three US factories now (Ohio, Arizona, North Carolina). Capacity expanded to 31 million pillows and 1.5 million quilts annually. Margins are thin while ramping—still negative in FY26 but targeted to become 15% EBITDA margin at 60–65% utilization.

Branded products. Licensed names (Fieldcrest, Waverly, Gaiam, Beautyrest, Tommy Hilfiger) and owned brands (Wamsutta, an 180-year-old American legacy acquired in FY25; Boutique Living and Layers, domestic). Margin intent: 100–200 bps above core. Wamsutta relaunched July 2025 as a direct-to-consumer play.

Domestic retail (Boutique Living, Layers) sits at ~2.25% of revenue via 2,000 multi-brand outlets. Growth vector is slow—mostly a portfolio embellishment.

4. Financials Overview

Figures are consolidated, in ₹ crore.

Q4 FY26 (Jan-Mar ’26): Revenue ₹1,058 Cr (+3.4% YoY). New business crossed ₹270 Cr in the quarter alone, hinting at acceleration. EBITDA ₹86 Cr; OPM slumped to 8%, lowest of the year, dragged down by depreciation from new US facilities and incubation costs still live.

Year’s narrative: Operating profit fell from ₹562 Cr to ₹392 Cr. Interest expense surged to ₹136 Cr from ₹70 Cr, the cost of debt