- 31 May 2023
- ICICI Securities
Indo Count's healthy EBITDA margin come in as positive surprise
ICIL - 398 Change: -0.65 (-0.16 %)News: Indo Count Industries reported a healthy improvement in operational performance in Q4FY23. Volume (including GHCL unit) grew 16% YoY to 20.4 MT. Average realisations grew 6% YoY to Rs 387/metre. Subsequently, revenue grew 23% YoY to Rs 807.1 crore. Gross margins expanded significantly by 381 bps YoY to 56%, which came in as a positive surprise. Consequently, EBITDA margin increased 324 bps YoY to 17.9% (higher end of the guidance). Lower other income and higher depreciation curtailed PAT growth. Ensuing PAT grew 11% YoY to Rs 94.7 crore (up 2.5x QoQ)
Views: The demand trajectory for home textiles, which had materially slowed down in key geographies such as the US, UK and Europe is gradually picking up pace (although Inventory at retailers level continue to remain higher levels). With greenshoots visible, the company has guided for volume of 85-90 mn metre in FY24E (up 17% YoY). The company remains remains positive about the demand scenario in the long run on the back of China + 1 strategy and government steps to support the Indian home textile export market (FTA signed with Australia, expectation of signing of further FTAs with UK, Canada and EU).
Impact: Positive