Financial & Sustainability review of India's top home textile firms

Trident Group, a prominent conglomerate in the home textiles industry, is renowned for its broad product range and strong market presence. The company offers a diverse selection of home textiles, including bed linens, towels, and other fabric-based items. With large-scale manufacturing facilities and significant investments in technology and infrastructure, Trident Group is strategically positioned to leverage its scale for a competitive edge. Its commitment to sustainability is demonstrated through ongoing efforts to improve waste management and recycling practices, reflecting a deep dedication to environmental stewardship. Trident’s financial performance further highlights its influential role in the industry, with substantial revenues and operational efficiencies underscoring its market impact.

In contrast, Indo Count, while smaller in scale, has carved out a prominent position within the home textiles sector through its focus on innovation and operational efficiency. Specialising in high-quality bed linen and other textile products, Indo Count utilises advanced technology to maintain a diverse and competitive product lineup. The company’s commitment to sustainability is similarly robust, with initiatives aimed at managing waste and improving recycling practices. Despite its comparatively smaller size, Indo Count’s effective cost management and strategic market positioning have facilitated steady growth and a strong market presence.

By focusing on actionable recommendations, both companies can enhance their revenue potential while advancing their ESG goals, ultimately strengthening their market standing and ensuring long-term viability.

Exhibit 1: Sales Revenue of Indo Count and Trident from FY 2015-2024 (in $ million)

Source: Companies’ annual reports, F2F analysis

The financial data for Indo Count and Trident provides a snapshot of the performance of these two companies, highlighting key areas of their financial health and operational efficiency. It is important to note that the Trident Group shows more fluctuations concerning sales as compared to Indo Count which shows a linear trend in growth. Both the companies have shown a positive outlook for the FY 2023-2024.

Sales and Revenue: Indo Count’s sales stand at ₹3557.07 crore (~$423.66 million), which is significantly lower than Trident’s ₹6808.83 crore (~$811.31 million). This indicates that Trident has a higher revenue base, potentially reflecting a larger market share or more extensive product offering.

Exhibit 2: Power and Fuel of Indo Count and Trident (in $ million)

Source: Companies annual reports, F2F Analysis

Table 1: Overall Costs of Trident Group and Indo Count (for FY 2023-2024)

Source: Company annual reports, F2F analysis

Trident’s cost structure reveals significantly higher expenses compared to Indo Count, reflecting its larger scale of operations. In FY 2023-24, raw material costs for Trident stand at ₹3551.67 crore (~$423.34 million), more than double Indo Count’s ₹1725.6 crore (~$205.88 million). Power and fuel costs follow a similar pattern, with Trident incurring ₹594.2 crore (~$70.85 million) versus Indo Count’s ₹198.73 crore (~$23.71 million). Operational expenses further highlight this disparity: Trident’s employee costs are ₹876.85 crore (~$104.50 million), significantly higher than Indo Count’s ₹312.54 crore (~$37.27 million). Conversely, Indo Count’s selling and administrative expenses are ₹329.13 crore (~$39.24 million), exceeding Trident’s ₹456.19 crore (~$54.37 million) when considered relative to sales revenue. This suggests that Trident may manage operational efficiency better despite its higher overall costs.

In terms of profitability, Indo Count achieved a profit before tax of ₹450.31 crore (~$53.73 million), slightly below Trident’s ₹476.85 crore (~$56.86 million) in FY 2023-24, indicating effective cost management despite lower sales. After taxes, Indo Count’s net profit was ₹337.93 crore (~$40.26 million), compared to Trident’s ₹349.52 crore (~$41.70 million), showing both companies are profitable with Trident slightly outperforming in net profit. Additionally, Trident distributed a significantly higher dividend of ₹183.46 crore (~$21.84 million) versus Indo Count’s ₹43.57 crore (~$5.19 million), suggesting a stronger capacity to return value to shareholders.Top of FormBottom of Form

While Trident operates on a larger scale with higher revenues and costs, both companies are performing well in terms of profitability. Indo Count’s ability to achieve a profit before tax close to that of Trident with substantially lower sales reflects operational efficiency and cost management. The higher dividend and other income figures for Trident suggest a robust financial position and effective shareholder value distribution. Overall, both companies demonstrate strong financial health, but Trident’s larger scale and higher profitability metrics highlight its significant market position and operational scale.

Sustainability Metrics

Table 2: Waste Generation of Trident Group and Indo Count (for FY 2023-2024)

Source: Companies Annual Reports, F2F analysis

In comparing the waste management practices of Indo Count and Trident for FY 2023-24 and FY 2022-23, several key differences and similarities emerge. Table 2 illustrates the sustainability practices of Trident and Indo Count, focusing on the waste generated by each company. Waste generation is a key indicator of sustainability, as lower waste output often reflects more efficient production processes and effective waste management practices.

For Indo Count, the total waste generated in FY 2023-24 amounts to 18,767.1 metric tonnes, a significant increase from 7,184.7 metric tonnes in FY 2022-23. This substantial rise is driven by increases in plastic waste, e-waste, battery waste, and other hazardous and non-hazardous waste. Indo Count’s waste intensity per rupee of turnover is 0.00000056, slightly higher than the previous year’s 0.00000047, indicating a marginal increase in waste generation relative to revenue. The company has a waste intensity of 0.000180 MT/million metres, up from 0.000169 MT/million metres. Notably, Indo Count’s recycling efforts have increased to 2,031.3 metric tonnes, with a substantial rise in re-used waste, totalling 14,216.3 metric tonnes. However, the company disposed of 2,519.7 metric tonnes of waste, with a significant portion going to landfills (2,255.1 metric tonnes).

Trident, on the other hand, generated 251,613.40 metric tonnes of waste in FY 2023-24, up from 209,710.06 metric tonnes in FY 2022-23. This increase is reflected across various waste categories, including plastic, e-waste, and other hazardous wastes. Trident’s waste intensity per rupee of turnover is 0.0000037, compared to 0.0000033 in the previous year, reflecting a slight increase. The waste intensity in terms of physical output is 0.79 MT/million metres, up from 0.70 MT/million metres. Trident’s recycling efforts have also seen a significant increase, with 68,192.09 metric tonnes of waste recycled in FY 2023-24 compared to 53,444.72 metric tonnes in FY 2022-23. The company re-used 5,622.23 metric tonnes of process waste and engaged in other recovery operations such as waste-to-energy. Trident disposed of 173,495.37 metric tonnes of waste, with a substantial amount going to landfills (170,786.09 metric tonnes), and a smaller portion incinerated (31.22 metric tonnes).

Overall, while both companies show an increase in total waste generated and waste intensity, Trident appears to have a more comprehensive waste management strategy with higher recycling and recovery figures. Indo Count’s higher disposal rates and waste intensity suggest a need for improved waste reduction and management practices. Trident Group also has a lower risk ESG rating of 15.4 and ranks 68 out of 211 textile and apparel companies according to Morningstar’s Sustainalytics. Indo Count, despite its low risk in ESG ratings, stands 119 out of 211 textile firms with a rating of 18.2.

The Way Forward

To enhance both financial performance and sustainability practices, Indo Count and Trident should focus on several key areas. Indo Count, despite its lower sales, demonstrates effective cost management and profitability and should continue to explore opportunities for market expansion and product innovation to boost revenue. In contrast, Trident, with its larger scale and higher costs, should focus on robust cost control measures and strategic investments to improve profitability and manage increased expenses.

Both companies should also intensify their efforts in sustainability: Indo Count needs to address the rise in total waste by implementing comprehensive waste reduction programmes and optimising production processes, while Trident should enhance its recycling and waste diversion strategies and invest in advanced recycling technologies. Both firms should regularly monitor their waste intensity metrics and benchmark against industry standards to drive improvements. Additionally, developing long-term strategies that integrate financial and sustainability goals and maintaining transparent communication with stakeholders will be crucial for their continued success and positive environmental impact.

Fibre2fashion News Desk (NS)