Home Furnishing giants are positive; expecting better business
Indian home furnishing industry stalwarts are talking about positivity and increased business opportunities because of many expansions in both global and Indian retail scenario. Among the commonly mentioned developments are growing retail sales in the US, strong German economy and good growth in domestic market, all of which are adding to the positivity. Most of the market leaders are going in for capacity expansions and making investments on marketing front… However, a note of caution remains as even though the total income has increased, many public limited companies have registered a decrease in profit which clearly shows pressure on margins. Yet, things have moved during Q1 FY ’19, and most of the companies have shown overall growth in their performance. Apparel Online takes a closer look.
Himatsingka Seide: Growth through global acquisitions
Himatsingka Seide (part of the Himatsingka Group) had total income of Rs. 601.38 crore in Q1 FY ’19 which is 16 per cent more than the Rs.
515.16 crore in Q1 of FY ’18. But the consolidated profit for Q1 FY ’19 was down by 12 per cent to Rs. 44.57 crore compared to Rs. 50.63 crore in Q1 of FY ’18. During the quarter ended 30 June 2018, the company through its wholly-owned step down subsidiary Himatsingka America Inc., US, has acquired the home portfolio of Global Brands Group Holding Limited. The acquired portfolio includes exclusive license rights for Tommy Hilfiger Home brand, the Copper Fit brand, and other brands.
The company is geared up for further business and has a positive outlook as the integration of the recent acquisition of brand licenses is progressing well. It is expected to complete integration by Q4 FY ’19. The construction of the Greenfield Terry Towel facility is progressing as per schedule and the plant is expected to come on stream during H1 of FY ’20. Similarly, it also claims that the ramp-up at the new spinning facility, which commenced commercial production during Q4 FY ’18, is progressing satisfactorily. “Ramp up at the spinning facility is progressing as per expectation and we should exit Q2 FY ’19 with the optimal level output from the facility,” says the company.
Trident Group: Bed linen, a growth area
Trident Group’s textile segment (Yarn, Bath & Bed Linen) revenue stood at Rs. 916 crore in Q1 of FY ’19 compared to Rs. 967 crore in the last fiscal year registering a de-growth of 5 per cent. But its bed linen sales grew by 14 per cent quarter-onquarter (QoQ) base. The company board has approved to implement Co-gen Steam (2 x 150 TPH) and Power Plant (2 x 30 MW) facility in
“After facing multiple challenges over the last 18 months, we are slowly witnessing an uptick in demand. With a positive outlook on global growth and India advantage, we remain optimistic. We continue to work towards strengthening our position in key markets globally, backed by innovative designs and products, focused customer-centric approach and a portfolio of aspirational and functional brands.”
– Anil Kumar Jain, Executive Chairman, Indo Count Industries
Budni (Madhya Pradesh) which shall be executed in a phased manner and is expected to be completed by FY ’21. It will help the company to reduce dependence on external power and will also ensure uninterrupted 24x7 supply of regulated power & steam for its yarn, bath linen, and bed linen units. It is worth mentioning here that forex loss for the current quarter includes marked to market loss of Rs. 3,934.2 lakh on foreign currency forward contracts which is further adjusted from results of textiles’ segment.
GHCL: Banks on sustainability as way forward
GHCL’s home textiles business revenue declined by 15 per cent to Rs. 265 crore in first quarter of FY ’19 as compared to Rs. 311 crore in the corresponding quarter in FY ’18 primarily due to headwinds. However, sequentially the revenue has grown by 21 per cent and earnings before interest, tax, depreciation and amortization
“We are confident of achieving our vision of +20 per cent profit growth on a long-term horizon creating value for our stakeholders. This quarter, we have been able to achieve a satisfactory performance which is in line with our expectations.”
– RS Jalan, MD, GHCL
(EBITDA) have grown by 43 per cent to Rs. 18 crore. The company says that net profit for the current quarter was Rs. 62 crore as compared to
Rs. 76 crore of Q1 FY ’18, (excluding one-time income tax credit of Rs. 82 crore) primarily due to the impact of headwinds in home textiles, which has now started showing signs of improvement when compared to Q4 FY ’18. The company claims that the outlook for FY ’19 is positive and it is on track with expansion plans which are likely to be completed within the stipulated time and cost. The company has also come up with a new brand, ‘Cirkularity’. Following the three Rs – Reduce, Reuse and Recycle – the brand is also focused on sustainability.
Indo Count Industries Ltd.: Own brands for fashion bedding segment
Total revenue of Indo Count Industries stood at Rs. 457 crore for Q1 FY ’19 as against Rs. 432 crore in Q1 FY ’18 while the sales volume stood at 14.4 million metres in Q1 FY ’19 as against 11.8 million metres in Q1 FY ’18, though the profit after tax for Q1 FY ’19 was Rs. 29 crore as against Rs. 32 crore in Q1 FY ’18. Dedicated to bedding mainly, the company claims that it is the second largest manufacturer and exporter of bed linen from India; and amongst the top three bed sheet suppliers in the US; and also the 11th largest global home textiles supplier to the US. The company has recently launched three new brands, namely, Heirlooms of India, Boutique Living Coastal and ATLAS in the Fashion Bedding segment in the US. It has also launched a new licensed brand, Morris & Co. in the US. It has noticed that US retail sales are witnessing an uptick trend.
Having a good reach in the domestic market, the company claims that its brand Boutique Living is having positive acceptance. The Indian market is growing at 8 per cent CAGR and is going forward; so, the company anticipates continuous growth in this segment. Further, the company is focusing on the modernisation of spinning and on tapping newer geographies.
“We are starting the new fiscal with high optimism. The company is well positioned for future growth and is capable to deliver improved performance in the current financial year. Green shoots of recovery are visible
– US, Europe & other key markets have shown considerable strength in recent quarters.” – Rajinder Gupta, Chairman, Trident Group