ICIL - Indo Count Inds.

📊 NSE: ICIL 🏢 Textiles - Cotton/Blended 📅 Last Updated: 12/14/2025 8:01

💰 Financial Performance

Revenue Growth by Segment

Core Business (Bed Linen) revenue grew 12% QoQ in Q2 FY26, while New Businesses (Utility Bedding + USA Brand Business) recorded revenue of INR 181 Cr, representing a 40% QoQ growth. Core business share of revenue shifted from 98% in Q2 FY25 to 83% in Q2 FY26 as new segments scaled rapidly.

Geographic Revenue Split

The USA accounts for 61% of total revenue and approximately 70% of export revenue. The UK contributes 10% of exports, with the remaining 30% derived from Europe and other regions. The Indian domestic market currently represents a small share of 2.0-2.5% of total revenues.

Profitability Margins

Consolidated Operating Profit Margin (OPM) moderated to 12.9% in FY25 from 16.4% in FY24. In Q4 FY25, OPM significantly decreased to 8.5% from 15.1% YoY. PAT for FY25 was INR 246 Cr, a 27% decline from INR 337.93 Cr in FY24, driven by front-loaded operating costs and tariff uncertainties.

EBITDA Margin

Q2 FY26 EBITDA stood at INR 123 Cr. The company targets EBITDA margins of 15-16% for the pillow business and 17-18% for the branded segment. Current margins are impacted by a 150-200 basis point hit due to investments in US human talent and infrastructure, which are expected to break even by Q4 FY26.

Capital Expenditure

Total debt rose to INR 1,448.72 Cr in FY25 from INR 955.93 Cr in FY24, primarily to fund acquisitions and expansion in the US. This includes the acquisition of the Wamsutta brand, an 81% stake in Fluvitex Inc., and a 100% stake in Modern Home Textile Inc.

Credit Rating & Borrowing

Credit ratings are maintained at CARE AA- (Stable) and ICRA AA- (Stable), revised from Positive outlook. Interest coverage moderated to 4.53x in FY25 from 8.38x in FY24 due to increased debt and lower operating profits.

⚙️ Operational Drivers

Raw Materials

Primary raw materials include cotton, yarn, and fabric. Cotton costs are highly seasonal and represent a significant portion of the cost structure, though specific percentage of total cost is not disclosed.

Import Sources

ICIL sources special fibers and Egyptian/American cotton through imports to support its premium bed linen production.

Capacity Expansion

Current processing capacity is 153 million meters per annum. US utility bedding capacity includes 31 million pillows and 1.5 million quilts across facilities in Ohio, Arizona, and a new pillow unit in North Carolina.

Raw Material Costs

Raw material costs are vulnerable to volatility in cotton and yarn prices. ICIL manages this through an order-backed stocking policy, though inventory days remained high at 135 days in FY25 (down from 159 days in FY24).

Manufacturing Efficiency

Average working capital utilization was 70% for the 12 months ended July 2025. Two US facilities are currently operating at 60% utilization, with plans to scale to a $275 million revenue level to improve fixed cost absorption.

📈 Strategic Growth

Expected Growth Rate

12-15%

Growth Strategy

ICIL is executing a '2.0 growth journey' by scaling US-based manufacturing to bypass tariffs, leveraging the newly acquired Wamsutta brand, and expanding licensed portfolios like Tommy Hilfiger for utility bedding. The company is also targeting the UK market via the FTA and increasing its domestic Indian market presence.

Products & Services

Bed linens, comforters, quilts, pillowcases, duvet covers, and utility bedding (pillows and quilts).

Brand Portfolio

Wamsutta (owned), Tommy Hilfiger (licensed for utility bedding).

New Products/Services

Utility bedding and branded products now contribute 17% of revenue (INR 181 Cr in Q2 FY26), up from 2% a year prior.

Market Expansion

Targeting expansion in the UK (currently 10% of exports) and the Indian domestic market (targeting growth beyond the current 2.5% share).

Market Share & Ranking

ICIL is among the top 3 suppliers and exporters of bed linen from India and a leading supplier to the US market.

Strategic Alliances

License agreement with Tommy Hilfiger for the utility bedding portfolio.

🌍 External Factors

Industry Trends

The industry is shifting toward local-for-local manufacturing in the US to improve lead times and avoid trade barriers. ICIL is positioning itself as a brand-led manufacturer rather than a pure commodity exporter.

Competitive Landscape

Competes with other Indian textile giants and Chinese exporters. China currently faces lower reciprocal tariffs (15-30%) than India's potential 50%, creating a competitive pricing challenge.

Competitive Moat

Moat is based on 30+ years of promoter experience, deep integration with global big-box retailers, and specialized expertise in bed linen processing (printing/dyeing). This is sustainable due to the high reliability required by large retailers.

Macro Economic Sensitivity

Highly sensitive to US consumer discretionary spending and US-India trade relations. A slowdown in US demand directly impacts 61% of total revenue.

Consumer Behavior

Shift toward value-based products and utility bedding (pillows/quilts) over premium fashion bedding in the US market.

Geopolitical Risks

US tariff-related uncertainty is the primary geopolitical risk, potentially imposing a 50% duty on Indian textile exports.

⚖️ Regulatory & Governance

Industry Regulations

Operations are heavily impacted by US import tariffs and Indian government export policies. Pollution norms in Maharashtra and Gujarat manufacturing hubs also govern processing activities.

Environmental Compliance

Focus on sustainability across the value chain from procurement to packaging to meet global retailer ESG mandates.

Taxation Policy Impact

ICIL derives a significant portion of its profits from Government export incentive schemes; any reduction in these incentives would directly squeeze net margins.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the duration and impact of the 50% US tariff, which could permanently shift order volumes away from Indian facilities if US-based production does not scale quickly.

Geographic Concentration Risk

High concentration with 70% of exports and 61% of total revenue tied to the US market.

Third Party Dependencies

High dependency on top 5 customers for 47% of revenue, making the company vulnerable to client attrition or inventory policy changes by major retailers.