Sheela Foam Charts Course for Sustained Growth

Ashwin Thakker

— 2 min read

Key Facts on Outlook:

  • Overall Revenue Growth Target: 15% year-on-year for the next three years.
  • Showroom Expansion: 1,000 new showrooms planned for FY26.
  • Value Segment (Tarang & Aaram) Revenue Target: Over Rs. 100 crores in FY26.
  • E-commerce Value Growth: 50% expected in FY26, building on Rs. 200 crores in FY25.
  • Furlenco Revenue Projection: Rs. 370 crores in FY26, escalating to Rs. 500-550 crores by FY27.
  • Core EBITDA Margin Q1 FY26: 11.7% (up from 8.4% in Q1 FY25).
  • Kurlon Integration Savings: Rs. 190 crores (run rate) realized, with an additional Rs. 60 crores expected by FY26 end.
  • Long-term EBITDA Margin Target: 14-15% within three years, driven by operating leverage.
  • Net Debt Reduction Target: Rs. 300-350 crores, aiming for Rs. 300-400 crores net debt through non-core asset monetization.

Sheela Foam delivered robust Q1 FY26 results, signaling a strategic pivot towards accelerated growth and enhanced profitability. With Kurlon integration benefits already visible, the company is set to unlock significant value through aggressive market penetration, new product offerings, and a keen focus on operational efficiencies. This outlook promises a dynamic future.

Driving Revenue Growth and Market Penetration

Sheela Foam projects a sustained 15% year-on-year revenue growth for the next three years, focusing on deeper market penetration. A key initiative includes opening 1,000 new showrooms in FY26, expanding reach for both Sleepwell and Kurlon brands. The value-driven 'Tarang' and 'Aaram' mattress lines are targeted to generate over Rs. 100 crores in FY26 revenue. The e-commerce segment is also expected to achieve 50% value growth in FY26, building on Rs. 200 crores in FY25 revenue. International expansion in Dubai and GCC countries shows promising high gross margins.

Enhancing Profitability and Financial Health

Sheela Foam targets 14-15% EBITDA margins within three years, building on Q1 FY26's 11.7%. Significant cost efficiencies from the Kurlon integration are a key driver, with Rs. 190 crores in run-rate savings already achieved and an additional Rs. 60 crores expected by FY26 end. The company plans to reduce net debt by Rs. 300-350 crores through non-core asset monetization. Furthermore, Furlenco, a strategic investment, is projected to achieve Rs. 370 crores revenue in FY26, rising to Rs. 500-550 crores by FY27, diversifying the group’s growth avenues.

Sheela Foam's Q1 FY26 results and forward-looking guidance indicate a clear path for sustained expansion. Through aggressive market penetration, strategic new product launches, and robust e-commerce growth, coupled with significant operational efficiencies from Kurlon integration, the company is well-positioned for strong revenue and margin growth in the coming years. This comprehensive strategy underlines a positive outlook for shareholders.

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