<h1>Sleepwell's Growth Path Double-Digit Expansion Ahead</h1>

Ashwin Thakker

— 2 min read
  • Targeting 15% annual revenue growth for the next three years.
  • Aiming for 14-15% EBITDA margins within three years.
  • Planned 1,000 new showrooms in FY26, largely for Kurlon expansion.
  • Expects Rs. 100+ crores revenue from value-segment mattresses (Tarang & Aaram) in FY26.
  • Forecasts 50% e-commerce value growth in FY26.
  • Targeting Rs. 300-350 crores debt reduction, aiming for net debt of Rs. 300-400 crores.
  • No major fresh CAPEX until FY29-30.

Sheela Foam, parent company of Sleepwell and Kurlon, shared its strategic vision for growth and profitability in its Q1 FY26 earnings call. With strong 10% mattress volume growth, the company focuses on market penetration, cost control, and expanding across e-commerce and value products, setting the stage for future performance.

Expanding Market Footprint and Sales Channels

Sheela Foam is implementing a clear strategy to broaden its market presence. A core element involves opening approximately 1,000 new showrooms this fiscal year, primarily to enhance the Kurlon brand's reach in North and West India. This initiative uses existing Sleepwell relationships for wider market access.

"In Q1 FY '26, we have already signed up for 392 new showrooms, out of which 234 are already operationalized."

The value-segment mattresses, Tarang and Aaram, are important contributors, projected to yield over Rs. 100 crores in FY26 revenue. E-commerce is another significant growth area, targeted for a 50% value increase in FY26, building on its Rs. 200 crore FY25 revenue. These multi-pronged efforts show a strong focus on consistent sales expansion.

Enhancing Profitability and Financial Health

Sheela Foam's Kurlon integration has notably improved profitability through cost efficiencies. The company has already realized a Rs. 190 crore run rate in savings, with an additional Rs. 60 crore in balanced savings expected by FY26 end. These improvements support the goal to reach 14-15% EBITDA margins within three years, aided by operational leverage from sustained revenue growth.

"The balanced savings of Rs.60 crores would also be realized by the end of FY '26."

Despite raw material price drops affecting the foam segment's value growth, the company remains focused on cost optimization. Financially, Sheela Foam aims to reduce its net debt by Rs. 300-350 crores, using strong PAT generation and non-core asset sales. This careful financial management is important for long-term stability and value creation.

Sheela Foam has a clear plan for profitable expansion. Initiatives like Kurlon integration, channel growth, and a focus on cost efficiencies support its goal for double-digit revenue growth and improved margins. The company's careful financial management, including debt reduction, positions it for strong long-term value creation.

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