Sheela Foam Q4 FY26 results: PAT 7x, dividend 20%

Market reaction: stock jumps after earnings

Sheela Foam shares rallied sharply after the company reported a steep year-on-year rise in March-quarter profit. The stock surged 17.30% to ₹637.80 following the results, as investors reacted to a stronger margin profile and a sharp improvement in profitability. The move came alongside commentary that FY26 reflected the benefits of the Kurl-on acquisition and its integration with Sheela Foam.

The Q4 update also arrived amid visible operating traction across mattresses, foam, and newer channels such as e-commerce and the company’s unorganised-to-organised (U2O) initiative. Management positioned the year as one focused on execution, integration benefits, and tighter cost discipline.

Q4 FY26 headline numbers: revenue at ₹1,050 crore

For Q4 FY26, consolidated revenue from operations rose 23.59% year-on-year to ₹1,050.06 crore, supported by higher volume growth in both mattress and foam segments. Consolidated profit after tax (PAT) increased to about ₹92 crore versus about ₹13 crore a year earlier. One report pegged Q4 PAT at ₹91.28 crore, while management commentary and another earnings summary cited ₹92 crore for the quarter.

Profit before exceptional items and tax surged to ₹78.48 crore in Q4 FY26 compared with ₹2.13 crore in Q4 FY25. The company also reported an exceptional loss of ₹15.77 crore during the quarter.

On operating profitability, core EBITDA grew 90% year-on-year to ₹121 crore, while the core EBITDA margin expanded by 400 basis points to 11.5% from 7.5% last year. Management linked the margin expansion to higher volumes, better gross margins and operating leverage.

FY26 performance: revenue ₹3,821 crore, PAT ₹161 crore

For the full year ended March 2026, consolidated revenue from operations increased 11.10% year-on-year to ₹3,820.84 crore. Consolidated PAT rose to about ₹161 crore, with one earnings summary citing ₹161 crore and another placing the full-year net profit at ₹159.61 crore. The stated year-on-year increase in full-year profit was about 78%.

Core EBITDA for FY26 stood at ₹414 crore, and the company highlighted that it crossed ₹400 crore for the first time. The core EBITDA margin for the year expanded to 10.8%, with a stated margin expansion of 261 basis points.

Management attributed the improvement to incremental sales, better gross margins and disciplined control over operating and fixed costs.

Standalone India business: similar growth trajectory

The standalone business, described in the call as the Indian operations, posted the same broad growth rate as the consolidated numbers. Standalone revenue rose 24% year-on-year in Q4 FY26 to ₹819 crore. For FY26, standalone revenue increased 11% to ₹2,962 crore.

Management also highlighted that for the full year, volume growth was around 15% for the India operations. It added that selling prices are “bound to be higher” in FY27 versus FY26, linking this to higher raw material prices.

Segment trends: mattresses steady, foam accelerates

Sheela Foam’s segment commentary showed growth across both major categories.

• Mattress volumes grew 13% year-on-year in Q4 FY26 and 12% for the full year.
• Mattress value growth was 13% in Q4 and 10% for FY26.
• Foam volumes grew 34% year-on-year in Q4 FY26, while foam value growth was 36% aided by better price realisations.
• For FY26, foam volume growth was 18% and foam value growth was 14%.

The company said growth was well distributed across Sleepwell and Kurl-on, supported by deeper distribution, sustained brand investments and sharper channel execution.

Distribution push: 600 net new showrooms, deeper reach

Offline expansion remained a key theme in FY26. The company said it added approximately 600 net new showrooms during the year, strengthening market reach. It specifically pointed to Kurl-on showroom expansion in northern India as gaining traction.

Alongside this, management said it continues to build adjacent home comfort categories, including pillows, as part of a broader “comfort portfolio” approach.

E-commerce and U2O: fast-growing channels

Digital also contributed to the growth mix. The company said sales on its own websites (brand.com) grew 136% year-on-year in FY26, while sales on e-commerce platforms grew 39% year-on-year.

A key growth driver highlighted in the call was the U2O business (earlier referred to as the Small Town India initiative). Management said the channel operates through 8,400 dealers and reaches over 5,000 towns across 24 states. In FY26, U2O delivered volume growth of 65% and value growth of 111% year-on-year.

Dividend: final payout proposed at 20%

The board recommended a dividend of 20% for FY26, subject to shareholder approval. Separately, the company disclosed a final dividend of ₹1 per equity share (face value ₹5) for FY 2025-26, to be paid within 30 days from the date of shareholder approval.

Management linked the dividend recommendation to improved profitability after the Kurl-on integration and a reduction in debt levels, which strengthened cash generation.

Balance sheet update: net debt down ₹156 crore

Sheela Foam also highlighted a net debt reduction of ₹156 crore in FY26. The company framed this as a reflection of underlying cash generation and balance sheet discipline.

Key financial snapshot

What management highlighted about FY26

In the earnings call, chairman and managing director Rahul Gautam said FY26 was a year of realising the benefits of the Kurl-on acquisition and its integration with Sheela Foam. The company said it achieved milestones including its highest-ever annual foam production, highest-ever turnover, and highest-ever EBITDA.

Management also said core EBITDA margins for Q4 climbed to 11.5% and for the full year the core EBITDA margin stood at about 10.7% to 10.8%, indicating the business is in an 11% to 12% margin bracket.

Conclusion

Sheela Foam’s Q4 FY26 results showed a sharp step-up in profitability, driven by higher volumes, margin recovery and operating leverage. The company also paired the stronger earnings with a proposed final dividend and a stated net debt reduction of ₹156 crore. Next, shareholder approval will determine the timing of the final dividend payout, while management commentary suggests pricing and raw material trends will remain central to FY27 execution.