SFL - Sheela Foam

📊 NSE: SFL 🏢 Miscellaneous 📅 Last Updated: 12/14/2025 13:10

💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue grew 5% YoY to INR 1,696 Cr in H1 FY26. Mattress segment registered 11% value growth, while the foam business grew 3% despite lower raw material costs. Furlenco revenue grew 58.18% YoY between FY24 and FY25.

Geographic Revenue Split

Overseas business EBITDA margins improved from 5-6% to over 8% in the first two quarters of FY26, representing a 250-300 basis point improvement.

Profitability Margins

Gross margins are targeted to increase from 44% to 46% through cost savings. EBITDA margins are projected to reach 12-12.5% in FY26 and 14-15% in FY27 as scale increases and fixed costs are absorbed.

EBITDA Margin

Q2 FY26 Core EBITDA margin was 10.0%, up 20 bps from 9.8% in Q2 FY25. Consolidated EBITDA for FY25 was INR 380.84 Cr, down from INR 417.64 Cr in FY24.

Capital Expenditure

No production capacity CAPEX is required as current capacity supports 2x to 2.5x current turnover. Focus is on showroom expansion with 800 units planned for the current year, which have an 18-month payback period.

⚙️ Operational Drivers

Raw Materials

TDI (Toluene Diisocyanate) and Polyol are the primary raw materials.

Capacity Expansion

Current production capacity is sufficient to support 2x to 2.5x the current turnover size. No investment is needed to expand production capacities in the near term.

Raw Material Costs

TDI prices reduced from INR 196 in Q4 FY25 to INR 172 in Q2 FY26 (12.2% decline). Polyol prices reduced from INR 117 to INR 107 (8.5% decline).

Manufacturing Efficiency

EBITDA profitability is expected to improve significantly once top-line growth exceeds 10%, allowing for better absorption of fixed costs and higher flow-through to the bottom line.

📈 Strategic Growth

Expected Growth Rate

12-15%

Growth Strategy

Growth will be achieved by expanding the retail footprint with 800 new showrooms, realizing INR 190 Cr in synergies from the Kurlon acquisition (INR 60 Cr remaining), and scaling the e-commerce segment which reached INR 173 Cr in FY25. Premiumization and D2C website improvements are also key drivers.

Products & Services

Mattresses, Flexible Polyurethane Foam, and Rental Furniture services.

Brand Portfolio

Sleepwell, Kurlon, Furlenco.

New Products/Services

Focus on premium mattresses and expanding the Furlenco furniture rental catalog to reach a INR 500 Cr+ revenue run rate.

Market Expansion

Planned expansion of 800 showrooms in the current year to increase market penetration.

Market Share & Ranking

Targeting a 30% share of the INR 2,000 Cr organized mattress market in the coming years.

Strategic Alliances

Furlenco is utilizing mattresses produced by Sheela Foam to create internal synergies.

🌍 External Factors

Industry Trends

The organized mattress market (INR 2,000 Cr) is growing as consumers shift from unorganized players. SFL is positioning itself for digital dominance and premiumization to capture this shift.

Competitive Landscape

The organized market is approximately INR 2,000 Cr, with SFL aiming for a 30% market share.

Competitive Moat

Brand strength (Sleepwell, Kurlon) and an extensive distribution network of 800+ showrooms provide a durable competitive advantage. The asset-light refurbishment model for manufacturing equipment ensures sustainable revenue with minimal new investment.