Sheela Foam (SFL) Q2 25/26 earnings summary

Executive summary

• Q2 and H1 FY26 saw robust growth, with consolidated revenue reaching INR 1,696 crore in H1 and the Kurlon merger finalized and integrated, restating comparative financials accordingly.

• Mattress business volumes grew 13% in Q2 and 11% in H1 year-over-year, with strong e-commerce and new showroom launches driving double-digit growth for Sleepwell and Kurlon brands.

• Leadership changes included the CMD devoting more time to operations and elevation of key executives to guide strategy.

• Furlenco added 34,000 customers in H1, now present in 29 cities, with increased profitability and an annualized revenue run rate above INR 350 crore.

• The Board approved the amalgamation of Kurlon Enterprise Limited and its subsidiaries, effective October 20, 2023, with results restated using the pooling of interest method.

Financial highlights

• Consolidated revenue grew 5% year-over-year to INR 1,696 crore in H1 FY26, with core EBITDA up 31% to INR 177 crore and margin expansion to 10.4% from 8.3%.

• Mattress value growth was 11%, foam business value growth 3% despite lower raw material costs.

• Normalized PAT for H1 was INR 35 crore, adjusted for INR 18 crore of one-time MTM losses; reported PAT was INR 17 crore.

• Net worth as of September 30, 2025, stood at INR 3,087.10 crore.

• Cash flow from operating activities for H1 FY26 was INR 117.80 crore.

Outlook and guidance

• Expectation of higher growth in India versus overseas, with India business anticipated to outpace international segments.

• Top-line growth target of 12%-15% and profitability margins expected to reach 12%-15% in the next year.

• E-commerce revenue targeted at INR 200-250 crore for FY26, with a goal of 30% market share in coming years.

• Tarang and Aaram expected to reach INR 120-125 crore in revenue for the full year.

• Continued focus on operational efficiency and integration of acquired businesses.