Sheela Foam: Comforting Growth and Strategic Wins in Q3 & 9M FY26

Sheela Foam Limited, a leading name in India's home comfort industry, has reported a robust performance for the third quarter and nine-month period ended December 31, 2025. The company demonstrated significant growth across key financial metrics, driven by strategic initiatives and successful integration efforts. On a consolidated basis, Sheela Foam's revenue from operations grew by 7% year-on-year for the nine-month period, reaching INR 2,771 crore. This top-line expansion was accompanied by an even more impressive surge in profitability, with Core EBITDA increasing by 34% to INR 293 crore, and margins expanding by a substantial 213 basis points to 10.6% for 9M FY26. For Q3 FY26 alone, consolidated revenue grew by 11% to INR 1,074 crore, with Core EBITDA soaring by 39% to INR 117 crore, and margins improving by 220 basis points to 10.9%. The company's net profit (PAT) for Q3 FY26 stood at INR 53 crore, marking a significant jump.

Strategic Integration and Segmental Strength

The successful integration of Kurlon has been a cornerstone of Sheela Foam's recent performance. Management highlighted that Kurlon has emerged as a significant turnaround story, with its combined Indian operations achieving a consolidated core EBITDA margin of 10% for the last nine months, aligning perfectly with SFL's pre-acquisition margins. This synergy has been instrumental in driving the overall profitability. The mattress segment registered an 11% year-on-year volume growth for both Q3 and 9M FY26, while the foam segment saw a 20% volume growth in Q3 FY26 and 12% for the nine-month period. This broad-based volume expansion underscores the strong demand for the company's products.

Sheela Foam is also actively expanding its retail footprint. The company launched 607 net new showrooms in 9M FY26, aiming for approximately 700 by the end of FY26. This expansion, particularly for Kurlon in Northern India, is crucial for deeper market penetration. The e-commerce business demonstrated exceptional growth, soaring by 53% year-on-year in 9M FY26 to achieve net revenues of around INR 180 crore. Furthermore, the unorganized to organized (U2O) segment, formerly known as STI, grew by nearly 100% over the last nine months, reaching a turnover of INR 75 crore through a network of over 8,000 dealers in more than 5,000 towns.

International Turnaround and Digital Leadership

The international business, encompassing operations in Australia and Spain, also showed a marked improvement, delivering a clear turnaround in performance during Q3 FY26. EBITDA margins for both geographies were around 12% in Q3, and approximately 10% for the first nine months. This improvement was attributed to disciplined execution, diversified sourcing from low-cost markets, controlled fixed costs, waste reduction initiatives in Australia, and improved pricing discipline in Spain. The company is also making strides in the GCC region, with local manufacturing partnerships and strengthened digital presence.

Furlenco, the furniture rental business, continues its growth journey, operating at an annualized revenue run rate of INR 400 crore. For the first nine months, Furlenco delivered a PAT of INR 18 crore and generated cash profits of INR 68 crore, which were reinvested for business growth. Sheela Foam's investment of INR 30 crore in Furlenco's recent equity raise, part of a larger 125 crore infusion, is expected to propel Furlenco to a INR 500-550 crore top line. The company's IT and digital solutions subsidiary, Staqo, is also playing a critical role in strengthening enterprises, empowering over 3 lakh subscribers on its Presence360 solution.

Sustainable Practices and Future Outlook

Sheela Foam is deeply committed to sustainability, with ESG initiatives forming a core pillar of its long-term strategy. The company has operationalized a 500kW solar power plant at its Jabalpur facility and plans to install an additional 1,000kW of renewable energy capacity across other locations. A 30kW sewage treatment plant has also been commissioned at Nandigram, reinforcing its commitment to responsible resource management. These efforts align with their sustainable development goals, including gender diversity, solar energy adoption, and waste reduction targets for 2030.

Management expressed confidence in sustaining margins while driving growth, targeting a 15% revenue growth and 15% EBITDA margin for its India business, with EBITDA margins expected to reach 14-15% by FY28. The company's disciplined capital allocation, including asset monetization of INR 100-125 crore to reduce debt, further strengthens its financial position. With robust volume growth, successful strategic integrations, and a clear focus on sustainability and profitability, Sheela Foam is well-positioned for continued success in the evolving home comfort market.