Sheela Foam's Strategic Growth Vision Unveiled

Ashwin Thakker

16 Aug 2025 — 2 min read

Key Facts on Outlook:

Sales Outlook:
- Mattress volume growth in Q1 FY26: 10% year-on-year.
- Targeting 1,000 new showrooms in FY26 (234 operationalized in Q1 FY26).
- Tarang & Aaram sales aim for Rs. 100 crore+ in FY26 (from current Rs. 80 crore run rate).
- E-commerce expects 50% value growth in FY26 (after Rs. 200 crore in FY25).
- Overall revenue growth target: 15% annually for the next three years.
- Furlenco revenue projection: Rs. 370 crore for FY26, Rs. 500-550 crore by FY27.
Margin Outlook:
- Q1 FY26 Core EBITDA margin: 11.7% (India business), 10.4% (consolidated).
- Kurlon integration: Rs. 190 crore run rate savings already realized; additional Rs. 60 crore savings by FY26 end.
- Target EBITDA margin: 14-15% within three years, driven by operating leverage and cost optimization.
- Fixed costs expected to remain flat in FY26 due to savings offsetting inflation.

Sheela Foam Limited, parent company of Sleepwell, is setting ambitious targets for sustained growth and enhanced profitability. Following a robust Q1 FY26 performance, the company outlined its strategic vision, aiming for a 15% annual revenue growth over the next three years and a significant increase in EBITDA margins. This outlook is bolstered by channel expansion, new product launches, and successful integration of Kurlon.

Strategic Growth Drivers

Sheela Foam aims for 15% annual revenue growth over three years. A key strategy is expanding its showroom network, planning 1,000 new outlets this fiscal year, with 234 operational in Q1 FY26. Mattress volume grew 10% year-on-year. The popular 'Tarang' and 'Aaram' value mattress brands, seeing 60% year-on-year volume growth, are projected to achieve

revenues of Rs. 100 crores plus

in FY26. E-commerce is also a major growth channel, projected for

50% value growth

in FY26, diversifying sales.

Driving Profitability Through Efficiency

Sheela Foam targets a 14-15% EBITDA margin within three years. This profit enhancement is driven by operating leverage and cost optimization initiatives. The Kurlon integration has significantly contributed, achieving

Rs. 190 crores run rate of the savings.

The company expects

additional Rs. 60 crores

in savings by FY26 end. These efficiencies help maintain fixed costs flat for FY26 despite inflation. Strategic product pricing for new lines, such as Tarang and Aaram, further supports healthy margins, ensuring that the company's expansion is financially sustainable.

Sheela Foam's Q1 FY26 earnings call highlighted a clear path for future growth and improved profitability. Strategic initiatives, including aggressive showroom expansion, strong performance from value segments and e-commerce, and substantial cost savings from the Kurlon integration, position the company for sustained financial health. The focus on 15% revenue growth and 14-15% EBITDA margins underscores a confident outlook.

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