Sheela Foam Experiences Quality Grade Adjustment Amid Mixed Financial Performance

Sheela Foam, a small-cap player in the furniture and home furnishing industry, has recently undergone a quality adjustment in its evaluation. The company has shown a mixed performance across key financial metrics. Over the past five years, sales growth has been recorded at 11.50%, while EBIT growth has faced a decline of 16.57%. The company's EBIT to interest ratio stands at 7.67, indicating its ability to cover interest expenses, although its debt to EBITDA ratio is at 7.87, suggesting a notable level of leverage.
In terms of market positioning, Sheela Foam's net debt to equity ratio is relatively low at 0.16, and it maintains a sales to capital employed ratio of 1.03. However, the company has a negative tax ratio, which could raise concerns about its profitability. Institutional holding is at 25.17%, reflecting a moderate level of institutional interest.

When compared to its peers, Sheela Foam's performance appears less favorable. Companies like V-Guard Industries and Bata India have demonstrated stronger quality metrics, while Relaxo Footwear and Campus Activewear maintain average standings. This peer comparison highlights the challenges Sheela Foam faces in enhancing its market position amidst a competitive landscape.