Indo Count Industries Ltd Q1 FY27 Earnings Call Summary

Event Participants

Executives

2 Mohit Jain, Manish Bhatia

Analysts

9 Abhishek Shankar, Bhavin Chheda, Jatin Damania, Kaustubh Pawaskar, Naveen Baid, Pranav Malhotra, Raman Kerti, Saransh Gupta, Shradha Agrawal

Financials & KPIs

Geographic & Segment Commentary

• Core Business – Bed Linen (India Manufacturing): Q1 revenue of ₹837 crore with volume of 23 million meters (+12% QoQ), showing early recovery from the US tariff disruption. Realizations were impacted by product mix in Q1, but management expects full-year realizations to remain broadly intact; price increases negotiated with customers will flow through from Q2. Business mix is 70% US and 30% non-US; all core output is self-manufactured (bed linen, quilts, comforters, utility bedding at Indian facilities).

• New Business – US Utility Bedding & Brands: Q1 revenue reached ₹387 crore, nearly 3x YoY, with 2/3 from utility bedding manufacturing and ~1/3 (₹125 crore) from the branded portfolio (Wamsutta, Fieldcrest, Waverly, Gaiam). Branded business sources third-party products (towels, curtains, rugs, window treatments) alongside own-manufactured bed sheets. Management guided to ~₹500 crore for brands in FY27 and targets USD 100 million in three years; ~70-75% of required brand investment is in place.

• US Manufacturing Operations: Utilization maintained at 60-65% despite commissioning the North Carolina greenfield facility in January 2026, alongside existing Ohio and Arizona plants. Management expects utilization to stay in the 60-65% band for FY27 as scale-up continues.

• Non-US Markets: Contributed ~30% of core revenue in the quarter. The UK FTA restores a level playing field while the expected EU FTA opens duty-free access to a large market; combined with existing FTAs (Australia, Japan, New Zealand, Middle East), management expects non-US revenues to grow 20%+ in FY27. UK business is 8-10% of total, with client engagement intensity roughly doubling since the FTA.

Company-Specific & Strategic Commentary

• FY27 Guidance Reaffirmed: Management confirmed ₹5,500 crore revenue and ~13% EBITDA margin for FY27, with core volume guidance of 105-110 million meters. Container constraints from West Asia continue but are expected to ease; Q2-Q3 historically stronger driven by US festive demand.

• Tariff Positioning: India remains competitively placed at 10% US tariff; the company did not lose a single order or customer even at 50% tariff levels. ~80% of exports are on FOB basis where the importer bears tariffs; no material financial benefit expected from potential refunds, with clarity expected by end of year.

• Bhilad Facility Disruption: Flooding from 23 July 2026 halted operations; the plant partially resumed from 12 August 2026 with phased normalization expected. Facilities are adequately insured (property, inventory, loss of profit) with the claim process initiated; management confident of recovering lost ground across other plants.

• Long-Term Aspirations & FTAs: CY2028 ambition of ₹8,000 crore revenue supported by core growth and USD 275 million new business target. UK/EU FTAs and progress on the US trade deal expected to accelerate India-sourcing shift over 12-18 months. Bharat Tex 2026 participation drew strong global/domestic response; three CITI sustainability awards received.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

Bhilad Plant Impact & Recovery

• Question: What is the volume impact from the Bhilad closure (15-20 days), and will orders be deferred in Q2-Q3 given festive season? (Abhishek Shankar, ICICI Direct)
• Answer: Facility is fully insured; scaling operations department-wise over the next couple of quarters. Company is confident of serving every customer order and making up lost ground, with production offset across other plants as the endeavor. (Mohit Jain)

Segment-wise Margin Structure

• Question: What is the margin differential between core bed linen and new business (utility + branded)? (Raman Kerti, Sequent Investments)
• Answer: Long-term targets: bed linen at 15% (standalone slightly better than 15% this quarter), utility bedding at 15% at full scale, brand business at 15% plus 100-200 bps. Blended path to 15-16% margins as scale matures; new greenfield facilities carry gestation-period margin pressure. (Mohit Jain)

Tariff Refund & Realization Dive

• Question: Any tariff refund in the quarter, and why is realization only ~₹357/meter (+1.5% YoY) despite rupee depreciation and lower tariffs? (Bhavin Chheda, Enam Holdings)
• Answer: No tariff refund booked; ~80% of exports are FOB so importer bears tariff; material benefit not expected and quantification premature until year-end. Q1 realization dip driven by product mix; full-year realizations should remain intact, with customer price increases flowing through from Q2. (Mohit Jain)

UK/EU FTA Traction

• Question: How much is UK business and what client/sourcing traction has the FTA generated? (Bhavin Chheda, Enam Holdings)
• Answer: UK is 8-10% of revenue with an active UK office; client interactions have roughly doubled post-FTA. FTA benefits typically pan out over 12-18 months rather than immediately; EU FTA expected to further open a large duty-free market. Non-US growth guidance of 20%+ reflects these countries. (Mohit Jain)

Branded Business Ramp-Up

• Question: How are the brand and licensing businesses (Wamsutta, Fieldcrest) performing and what ramp-up is expected? (Jatin Damania, SVAN Investments)
• Answer: Brand business is 1/3 of the ₹387 crore new business revenue (₹125 crore in Q1); FY27 brand target ~₹500 crore. Business split remains 2/3 utility, 1/3 brands; products span towels, bath mats, window treatments, rugs, pillows, mattress protectors, comforters. ~70-75% of brand investments are in place, with USD 100 million ambition over three years. (Mohit Jain)

Utility Bedding Utilization & Raw Material Pass-Through

• Question: What utilization trajectory is expected and has input cost inflation been passed on to US retailers? (Shradha Agrawal, Asian Markets Securities)
• Answer: Utilization to remain stable at 60-65% for FY27 despite the new North Carolina facility coming onstream in January. Raw material inflation (nylon, polyester, stretch fabrics) is being passed on with a 2-3 month lag; global sourcing team in Shanghai supports competitive procurement. (Mohit Jain)

Margin Ceiling & Long-Term Outlook

• Question: Is 15% a ceiling given the move toward branded and e-commerce (Amazon, Wayfair, Overstock)? (Pranav Malhotra, Starship India)
• Answer: No ceiling in mind; near-term target is to stabilize at 15-16% company-level margins and recalibrate as the business and markets evolve. FY27 volume guidance of 105-110 million meters remains comfortable with customer offtake on the positive side. (Mohit Jain)

Key Takeaway

Indo Count delivered its highest-ever quarterly revenue of ₹1,224 crore in Q1 FY27 (+27% YoY), with EBITDA at ₹160 crore (13.1% margin) and PAT at ₹63 crore (+62% YoY), driven by core volume recovery (23 million meters, +12% QoQ) and near-tripling of the new business to ₹387 crore. Management reaffirmed FY27 guidance of ₹5,500 crore revenue at ~13% EBITDA margin, including 105-110 million meters of core volume and ₹1,500 crore annualized new business run-rate, supported by US utility bedding scale-up at 60-65% utilization and brand portfolio traction (Wamsutta, Fieldcrest, Waverly, Gaiam). Strategic focus remains on UK/EU FTA-led non-US growth (20%+ in FY27), price pass-through effective Q2, and long-term segment margins of 15% (bed linen and utility) with brands at 15% plus 100-200 bps. Key watch items include the Bhilad flood disruption (insured, phased normalization through Q2), container availability constraints, and tariff refund clarity expected by year-end; the company targets ₹8,000 crore revenue and USD 275 million new business ambition by CY2028.