Sleepwell: Unveiling Strategic Growth Plans

Ashwin Thakker

— 2 min read

Key Facts on Outlook:

  • Targeting 15% revenue growth annually over the next three years.
  • Aiming for 14-15% EBITDA margin within three years.
  • Expected Rs. 60 crores in Kurlon integration savings by FY26 end.
  • Forecast 50% e-commerce value growth for FY26 (to Rs. 300 crores).
  • Plans to open approximately 1,000 new showrooms in the current fiscal year.
  • Projected Rs. 100+ crores revenue from Tarang/Aaram mattresses in FY26.
  • Furlenco revenue projected Rs. 370 crores for FY26, targeting Rs. 500-550 crores by FY27.
  • Targeting Rs. 300-350 crores in net debt reduction through asset monetization.

Sheela Foam Limited's Q1 FY26 earnings call revealed robust growth plans, targeting 15% revenue growth and 14-15% EBITDA margins within three years. Strategic initiatives, including Kurlon integration benefits, e-commerce expansion, and new showrooms, are set to drive sustained profitability and market penetration, laying a strong foundation for future success.

Expanding Market Reach & Sales Outlook

Sheela Foam is aggressively expanding its market reach, with plans to open approximately 1,000 new showrooms in the current fiscal year, primarily for the Kurlon brand in North and West India. The company anticipates over Rs. 100 crores in revenue from its value-driven Tarang and Aaram mattresses in FY26, a segment that has shown substantial year-on-year volume growth of around 60%. E-commerce is also a significant driver, with an expected 50% value growth in FY26, building on Rs. 200 crores in FY25. Management highlighted,

Our mattress volumes in Q1 FY '26 grew by 10% year-on-year.

This broad strategy underscores a commitment to market penetration.

Enhancing Profitability & Financial Health

The management articulated a clear path to enhanced profitability, targeting a 14-15% EBITDA margin within three years. This is supported by significant cost optimization from the Kurlon integration, with Rs. 60 crores in balanced savings expected by FY26 end. Fixed costs are anticipated to remain flat in FY26, absorbing inflationary pressures due to these savings. The company aims to reduce its net debt by Rs. 300-350 crores, primarily through asset monetization. The CFO noted,

The further improvement in profitability will primarily come from the growth of top lines.

This financial discipline is key to long-term value.

Sheela Foam Limited presented a compelling forward-looking strategy. Key takeaways include aggressive top-line growth targets, significant margin expansion driven by integration synergies and cost control, and a clear debt reduction plan. These initiatives, coupled with strategic market penetration efforts and a focus on profitable growth, position the company for sustained success in the coming years.

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