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BW Businessworld

Indo Count: Weaving Success

Over the past few years, Indo Count Industries has been growing by leaps and bounds under its Chairman Anil Kumar Jain. The company charted an expertly planned growth path and has been forging ahead at great pace, thus boosting the stakeholder’s value as well as morale

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Over the past few years, Indo Count Industries has been growing by leaps and bounds under its Chairman Anil Kumar Jain. The company charted an expertly planned growth path and has been forging ahead at great pace, thus boosting the stakeholder’s value as well as morale.

Growing from a $4 billion market to $13 billion in the US by diversifying into newfangled products has been one of the many feats Indo Count achieved in the last few years. Besides diversifying its product range, the company has expansion plans in Europe and Australia too. The company is also looking at expanding capacity at its Kolhapur plant, from 68 million meters to approximately 110 million meters over the next two years. The capital-light business model has helped the company gain better visibility in the home textiles business.

The company has outpaced the clocked revenue of Rs 2,213 crore resulting in a 24 per cent growth during fiscal 2016. Moreover, its highest ever EBITDA and PAT showed a remarkable growth of 51 per cent and 82 per cent, respectively.

The secret behind the phenomenal growth of the company is beyond hard work and astute business decisions. In their own words, the company could achieve such exemplary success through tighter operating controls, prudent raw material sourcing, new customer additions, increased capacity utilisation followed by expansion in bed-linen capacity, new positioning in the mid-to-high end segment, a make-to order approach, superior product mix and strictly controlled overheads.

Undoubtedly, the turnaround is noteworthy, especially when most of India’s textile companies are still in the spinning business and haven’t managed to make the shift to value-added products. In the capital-intensive spinning business, capacity needs to be added regularly. And single-digit margins mean that without going into further debt, it is nearly impossible for textile companies to add this capacity. This means profitability is always low. Yet, Indo Count’s method were a departure from the tried and tested ways. It has chosen to evolve in a distinct manner.

Since 2011, the revenues have risen 25.5 per cent annually to Rs 2,070 crore with profits reaching Rs 250 crore in the year ended 31 March 2016.

Last fiscal, Indo Count planned to stock its own brand at various retail outlets in the US. For the Indian markets, it tied up with Asim Dalal, to set up The Bombay Store, to market an exclusive range of bed sheets as a premium product — priced between Rs 2,000 and Rs 9,000 — through Indo Count Retail Ventures, in which Dalal holds a 20 per cent stake. In the next five years, the company aims to clock Rs 500 crore in revenues from its Boutique Living brand.

Bringing in innovation in its every day culture has helped Indo Count stay milestones ahead of the competition. While some factors, like cotton prices, are beyond its control, the company says it does everything to ensure that nothing like the forex derivative loss happens anew, even as they integrate more into the global supply chain of their retail partners.

In 2016, Indo Count launched three new lifestyle brands — Boutique Living, Revival and The Pure Collection in the US market. These brands are scheduled to be launched in other markets in 2018.

While Indo Count has carved a distinct niche, challenges in the home market, still persist. Limited visibility and awareness in India are likely to hamper its expansion plans and growth. Not to mention the higher cost of capital and internal duty structure, in turn, resulting in high pricing of essential raw materials for man-made fibres. How Indo Count maintains its growth pace remains to be seen.