Sheela Foam (SFL) Q1 25/26 earnings summary

Executive summary

• Q1 FY 2026 delivered robust operational and financial performance, with consolidated revenue of INR 821.41 crores, driven by strong mattress volume growth and successful Kurlon integration, which delivered significant cost synergies.

• E-commerce sales surged 66% YoY, with 392–400 new showrooms signed and a total of ~20,000 touchpoints, deepening rural and digital penetration.

• Furlenco, the furniture rental subsidiary, achieved significant subscriber and profit growth, with plans for further capital infusion and expansion; equity stake increased to 43.89% in December 2024.

• ESG initiatives remain a strategic focus, with adoption of four UN Sustainable Development Goals.

• Exceptional income recognized from insurance recoveries for fire losses at Silvassa and Jhagadia plants.

Financial highlights

• Consolidated revenue at INR 821.41 crores (1% YoY growth); India business revenue at INR 644 crores (5% YoY growth).

• Core EBITDA rose 47% YoY to INR 75 crores (India) and 43% YoY to INR 85 crores (consolidated); EBITDA margins improved to 11.7% (India) and 10.4% (consolidated).

• Net profit for the quarter was INR 7 crores, with normalized consolidated PAT at INR 30 crores; net profit margin declined to 0.9% from 5.8% YoY.

• Gross margin reached 43.5% (India 45.3%), up 400 bps from pre-acquisition levels.

• Basic and diluted EPS for the quarter were ₹0.68, down from ₹4.23 in Q1 FY25.

Outlook and guidance

• Management targets 15% annual revenue growth over the next three years, with EBITDA margin guidance of 14%-15%.

• E-commerce expected to grow 50% in FY 2026, with a revenue target of INR 300 crores.

• Furlenco projected to reach INR 370 crores revenue in FY 2026 and INR 550 crores by FY 2027.

• No major CapEx planned before 2029-2030; focus remains on cost optimization and leveraging existing capacity.

• The company continues to pursue regulatory approvals for the amalgamation of Kurlon Enterprise Limited and Staqo World Private Limited.