In a separate development, CARE Ratings last month reaffirmed the long and short term rating on bank facilities of Indo Count
Industries. "The reaffirmation in ratings assigned to the bank facilities of the company continues to derive strength from its robust capital structure, comfortable debt coverage metrics, strong business profile – being one of India's leading home textile suppliers and exporters of bed linen, experienced Promoters in home textiles segment and reputed clientele profile," the rating agency said in rationale.
Indian home furnishings comprises of bedspreads, furnishing fabrics, curtains, rugs, durries, carpets, placemats, cushion covers, table covers, linen, kitchen accessories, made-ups, bed spreads, bath linen and other home furnishings accessories. "The demand in the home textile market is governed by the rise in disposable income of the households and improvement in the living standards. United States and Europe are the two major markets
in the segment; with India, China, Turkey, Pakistan and Bangladesh being the major suppliers," it said.
However, the company's sales dipped in April-June quarter (Q1FY21) to Rs 335.97 crore from Rs 518.46 crore in Q1FY20 as the production was stopped due to lockdown. The manufacturing facilities resumed partial operations from last week of April 2020. However, supply chain and logistics could gradually start operations from June 2020.
EBITDA (earnings before interest, taxes, depreciation, and amortization) margin contracted 220 basis points to 11.6 per cent from 13.8 per cent. The company said performance could have been better but production and sales impact on account of lockdown due to Covid-19 pandemic resulted in lower absorption of fixed costs in Q1FY21 thereby impacting EBITDA performance.