Moving Ahead In Style
With a capital-light business model, Indo Count has carved out a profitable niche for itself in the home textiles business
Under the astute leadership of Anil Kumar Jain, chairman of Indo Count Industries., the company made a dramatic turnaround by overcoming challenges and has been growing at a dynamic pace over last few years, thereby boosting stakeholder’s value.
In the past year, the company has expanded its addressable market from $4 billion to $13 billion in the US by diversifying into new products like fashion bedding, institutional linen and utility bedding. The company is also spreading its wings to Europe and Australia. Today, the US accounts for 70 per cent of its revenues, which Jain wants to bring down to 50 per cent in four to five years. “We have already opened offices in Manchester and Melbourne,” he says. “We plan to open an office in Dubai to cater to the Middle East and North Africa region (MENA) region.” Anticipating further growth, the company plans to expand capacity at its existing Kolhapur plant, from 68 million metres to around 100 to 110 million metres over the next two years.
With a capital-light business model, Indo Count has carved out a profitable niche for itself in the home textiles business. It is in this highly competitive and specialised business that Indo Count, run by Anil Kumar Jain, 63, and his son Mohit Jain, 40, has carved a niche for itself.
The shift is remarkable, given that most of India’s textile companies are still in the spinning business and haven’t managed to make the transition to value-added products. Spinning is capital-intensive, where capacity needs to be added at regular intervals. And single-digit margins mean that companies can never earn enough to add this capacity without taking on debt. As a result, profitability is always low. But Indo Count has chosen to build itself differently.
In the last five years, revenues have risen 25.5 per cent annually to Rs 2,070 crore while profits have touched Rs 250 crore in the year ended March 31, 2016. After having established Indo Count as a leading supplier of bed linen, Anil Kumar Jain once again had to brainstorm on the next steps, while leveraging on its existing strengths.
Indo Count is also looking at institutional sales to hotels, a space that has so far been served mainly by Chinese companies. It has also set up B2B showrooms for retailers in New York, Manchester and Melbourne.
For the Indian market, Indo Count has tied up with Asim Dalal, who set up The Bombay Store, to market a range of bed sheets through Indo Count Retail Ventures, in which Dalal holds a 20 per cent stake. In the next five years, the company targets Rs 500 crore in revenues from the Boutique Living brand. Jain’s focus is about staying ahead of the game: For instance, the company recently came out with a patented fabric that absorbs body heat when it is hot and radiates it when it is cool.
Innovations like these help Indo Count stay one step ahead of competition. And while some factors, like cotton prices, are beyond its control, it says it’ll do everything to ensure that nothing like the forex derivative loss happens again, even as they become more and more integrated into the global supply chain of their retail partners.
This article was published in BW Businessworld issue dated 'March 8, 2017' with cover story titled 'India’s Most Valuable CEOs 2017'
Around The World