Sheela Foam (SFL) Q1 25/26 earnings summary

Executive summary

• Q1 FY26 delivered robust growth with consolidated revenue of INR 821.41 crore, driven by 10% mattress volume growth and strong e-commerce expansion, while Kurlon integration contributed to cost savings and margin improvement.

• Mattress volumes grew 10% year-over-year, with Sleepwell up 22% and Kurlon up 6%, supported by integration and channel expansion.

• E-commerce value grew 66% year-over-year, and aggressive retail expansion saw 392-400 new showrooms signed, expanding total touchpoints to about 20,000.

• Kurlon integration led to significant cost savings, network optimization, and improved EBITDA margins above 10%.

• Profit after tax before share of joint venture was INR 5.44 crore, down from INR 46.59 crore in Q1 FY25, impacted by absence of prior year claims and MTM losses.

Financial highlights

• Consolidated revenue reached INR 821.41 crore (up 1% YoY); India business revenue at INR 644 crore (up 5% YoY).

• Core EBITDA for India business grew 47% to INR 75 crore; consolidated core EBITDA up 42% to INR 85 crore, with margins at 11.7% (India) and 10.4% (consolidated).

• Gross margin in India improved to 45.3% (up 0.9% YoY); consolidated gross margin at 43.5%, up 400 bps from pre-acquisition.

• Net profit margin declined to 0.9% from 5.8% YoY; basic and diluted EPS at INR 0.68, down from INR 4.23 in Q1 FY25.

• Adjusted EBITDA excludes INR 10 crore forex loss on hedges and INR 12 crore MTM loss on government bonds.

Outlook and guidance

• Targeting 15% top-line growth over the next three years, with EBITDA margin guidance of 14%-15%.

• Management expects further volume and EBITDA growth with festive season demand and continued e-commerce and network expansion.

• Furlenco projected to reach INR 370 crore revenue in FY26 and INR 500-550 crore by FY27.

• E-commerce expected to grow 50% in FY26.

• Regulatory approvals for amalgamation of Kurlon and Staqo with group entities are pending.