Sheela Foam (SFL) Q3 25/26 earnings summary

Executive summary

• Completed Kurlon merger and integration, restoring consolidated core EBITDA margins to pre-acquisition levels of 10% for the last nine months and achieving significant operational turnaround.

• Consolidated revenue grew 7% YoY to INR 2,771 crore for nine months, with Q3 revenue up 11% YoY to INR 1,074 crore and core EBITDA margin at 10.9%.

• Mattress volumes grew 11% YoY for nine months, with foam volumes up 12% and e-commerce revenues surging 53% YoY to INR 180 crore.

• International businesses in Australia and Spain delivered improved EBITDA margins, with Australia at 12% in Q3 and 9.8% for nine months, and Spain at 10% in Q3 and 9.7% for nine months.

• Furlenco achieved an annualized revenue run rate of INR 400 crore and PAT of INR 18 crore for nine months, with equity stake reduced to 34.53% after new share issuance.

Financial highlights

• Standalone revenue for nine months increased 6% YoY to INR 2,143 crore; consolidated revenue at INR 2,771 crore.

• Core consolidated EBITDA margin at 10.9% for Q3 and 10.6% for nine months, up 213 bps YoY.

• Q3 consolidated PAT at INR 53 crore, tripling YoY; nine-month PAT at INR 69 crore; cash EPS at INR 19.

• Net debt reduced to INR 600-650 crore consolidated, with India at <INR 300 crore and overseas at INR 325-350 crore.

• Standalone and consolidated net worth as of December 31, 2025: INR 2,837.73 crore and INR 3,150.73 crore, respectively.

Outlook and guidance

• Targeting 15% revenue growth and 15% EBITDA margin for India business over the medium term, with margin improvement expected to reach 14-15% by FY 2028.

• Price increases of 4-5% in Q3 expected to support Q4 revenue and profitability.

• Targeting ~700 new showrooms in FY26, with 607 already launched in nine months.

• Maintenance CapEx expected at 30-40% of total CapEx, with total annual CapEx around INR 125 crore.

• Management is evaluating the impact of new Indian labour codes, but expects no material effect.