Sheela Foam Limited conducted an investors' conference call on August 05, 2026, hosted by Dolat Capital Markets Limited, to discuss Q1 FY27 financial results. The management team included Chairman and Managing Director Mr. Rahul Gautam, Vice Chairman and Joint Managing Director Mr. Tushaar Gautam, Deputy Managing Director Mr. Rakesh Chahar, and Group CFO Mr. Amit Kumar Gupta.

Financial Performance Highlights

  • Consolidated Milestone: First time in group's history reporting consolidated revenues exceeding INR1,000 crores (INR1,032 crores) and EBITDA exceeding INR100 crores (INR109 crores) in any fiscal year's first quarter
  • Consolidated Growth: Revenue grew 26% year-on-year, EBITDA grew 45% year-on-year with margin expansion of 139 basis points to 10.6% from 9.2% in Q1 FY26
  • Standalone Performance: Indian business delivered revenue growth of 20% and EBITDA growth of 13% year-on-year to INR761 crores and INR68 crores respectively
  • PAT: Group recorded PAT of INR62 crores for the quarter, described as a substantial jump year-on-year

Segment-wise Performance

Indian Business Breakdown:

  • Mattresses value grew 15% with volumes growing 6%
  • Foam business grew 26% in value and 4% in volume terms
  • E-commerce business grew 30% overall with Brand.com sales up 69% and platform sales up 19%
  • U2O (unorganized to organized) business expanded to nearly 10,000 dealers with 81% year-on-year value growth and 19% volume growth

International Subsidiaries:

  • Australia (Joyce): Revenue grew 31% to INR120 crores with EBITDA margin of 12.8% compared to 6.8% in Q1 FY26
  • Spain: Revenue stood at INR133 crores, growth of 54% over last year, with EBITDA margins improving to 14.7% from 5.7% in Q1 FY26
  • Currency changes contributed partially to international growth

Other Businesses:

  • Furlenco: Subscriber base grew 36%, revenue rose 38%, EBITDA grew 65% year-on-year
  • Staqo (IT business): Revenue growth of 67% in Q1 FY27 with EBITDA run rate of 28-30%
  • Presence 360 ERP user base crossed 3.2 lakh users

Operational and Strategic Updates

Raw Material Environment: Company operated amid volatile raw material prices due to Middle East situation, with prices fluctuating in range of +40% to -20% during the period

Inventory Policy:

  • India: Maintains 15-30 days inventory
  • International operations carry higher inventory allowing lower cost inventory to run longer, contributing to higher gross margins
  • Frequency of foam price changes in international market much lower than in India

New Initiatives:

  • Launched sofa beds under both Sleepwell and Kurlon brands as entry into furniture segment
  • Planning to leverage Furlenco's designs, manufacturing and logistics capabilities
  • Extensive EBO and COCO network (3,500 exclusive brand outlets) provides physical footprint
  • U2O business introduced 5 and 6-inch mattresses, well received by value-conscious consumers

Store Expansion:

  • 41 new stores opened, plan to reach 50 stores
  • COCO store capex: INR27 lakh per store plus INR20-22 lakh working capital (total ~INR50 lakh per store)
  • Store sizes: 1,800 to 3,000 square feet depending on location
  • Targeting urban areas where competition has presence

ESG Performance

  • CRISIL ESG ratings: Category upgrade to "strong" in 2026
  • S&P Global Corporate Sustainability Assessment: Moved to 61st percentile from 51st percentile last year
  • Sustainalytics: Category upgrade of risk rating, industry rank improved to 218 from 351
  • Sustainability 2030 roadmap built around 4 United Nations Sustainable Development Goals

Financial Guidance and Outlook

  • Maintained target of 15% EBITDA margin for next year
  • Expect return on capital employed to reach 20-25% range in next 3 years (currently ~10%)
  • Debt reduction: India level debt ~INR300 crores, overseas debt ~INR350 crores
  • Expect to generate INR150-200 crores free cash flow for debt repayment
  • International operations expected to grow at ~5% in local currency terms with 10-12% EBITDA margins

Raw Material and Cost Structure

  • TDI and polyols form 65-70% of COGS
  • Company carries inventory to ensure consistent supply despite raw material volatility
  • Management implementing price increases commensurate with raw material cost changes
  • Expect raw material volatility to continue for couple of months, possibly until October-November 2026

Integration and Synergies

  • Kurlon integration: 96-97% complete with reduction from 21 to 12 operating units
  • 75-80% of synergies realized, 15-20% on way to realization
  • Combined market share in organized mattress market estimated at ~20%

Q&A Session Highlights

  • Volume growth expected to recover in coming quarters with Q3 (festive season) traditionally strongest
  • Furlenco operating profit around INR9 crores per quarter with 35% share to Sheela Foam
  • Employee expense spike in Q4 FY26 due to incentive provisions for higher annual profitability
  • Furniture expansion through shop-in-shop format in 40-50 stores, targeting 100 stores