Sheela Foam estimates its railways segment to clock turnover of Rs 400-500 crore within the next 2-3 years. Speaking to CNBC-TV18, Rahul Gautam, CMD of the company emphasized the increasing momentum in supply, projected robust growth in the next 2-3 years.

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Gautam acknowledged that the supply to the Indian Railways has been witnessing a positive trend on a month-on-month (MoM) basis.

“Every month or every quarter is better than the previous one as railways, keep replacing this material with the others, or the others with this material. It is going to be a slow and steady one. It's an established business. There are multiple products which are there and processes which are there but it is a trend that has to eventually get to a Rs 400 500 crore level in about two years’ time,” he said.

Gautam also highlighted the need for stability in demand. He expressed that despite gradual improvements, the company is yet to witness enough stability on the demand front. “Whether it is the supply chain, whether it is the stability of the raw material prices, or the markets in which for us are reflected by the footfalls there seems to be not enough stability on that.”

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However, Gautam expressed optimism about the future, stating that things are gradually improving. He expects the fiscal year 2024 (FY24) to be better for Sheela Foam.

He added, “I am very hopeful that as far as the coming year is concerned, it should be far better than what has been last year. I am sure that it will be a double digit growth whether it will be closer to 10 or closer to 15 I cannot say.”

Gautam stated that TDI prices are on the lower side and are far more stable than what the oscillations used to be. At the moment TDI prices are at around Rs 210 per kg.

Lower TDI prices are expected to positively impact Sheela Foam's margin, leading to improvements.

Additionally, Gautam projected double-digit revenue growth for the company in FY24, indicating a strong business performance in the upcoming fiscal year.

The stock is trading flat on the exchanges at noon on May 18.

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