Wakefit Q1 FY27: Growth Holds Up, Margins Improve, and Offline Expansion Accelerates

Wakefit Innovations Limited began FY27 with Revenue from Operations of INR 404.9 crore in Q1 FY27, delivering 16.6% year-on-year growth. Profitability also moved up. Reported EBITDA (excluding other income) rose to INR 56.4 crore, with a 13.9% margin, while Operating EBITDA (before Ind AS 116 lease adjustments, ESOPs and other non-operating items) increased to INR 36.8 crore at a 9.1% margin.

The quarter is notable because it came with supply chain disruption and volatility in key foam inputs such as polyol and TDI, triggered by geopolitical developments in the Middle East. Management indicated it responded with calibrated pricing actions and supplier management, while also continuing to invest in its omnichannel store rollout.

A quarter led by mattresses, with omnichannel momentum

Wakefit’s three core categories remained mattresses, furniture, and furnishings and decor. In Q1 FY27, mattresses contributed about 66% of revenue and grew 27.3% year on year. Furniture contributed about 28%, while furnishings and decor contributed about 6.3%.

The management commentary positioned mattresses as the stable growth and cash-generation engine. The longer-term intent is to increase the contribution of furniture and furnishings over the next three to four years, using a larger offline footprint to support cross-sell across categories.

Channel performance also highlighted the company’s shift from pure-play D2C into a tighter omnichannel model. In Q1 FY27, online channels contributed 52.7% of revenue and offline channels 47.3%. Own channels contributed 72.3% of revenue, while external channels contributed 27.7%.

Managing input-cost volatility without losing momentum

Management described Q1 FY27 as a quarter with significant volatility in raw material prices, particularly polyol and TDI, as well as logistics costs linked to the Middle East situation. It noted that the full impact of increased raw material costs would reflect in H1 FY27.

On the earnings call, management explained that roughly two-thirds of the quarter’s growth was volume-driven and one-third was driven by pricing actions. It also stated that the company had maintained supply stability better than the unorganized sector because of raw material planning, supplier relationships, and inventory management.

The company also highlighted that some raw materials saw very sharp spot increases, but Wakefit’s effective inflation was lower due to procurement relationships, and its consumer price response was implemented in two increases of about 5% each.

Looking ahead, management indicated that, versus Q1 FY27 levels, overall H1 FY27 could see around 100 basis points impact on contribution margins, assuming no further escalation.

COCO expansion becomes the central execution lever

Wakefit’s offline footprint continued to expand rapidly. The company added 27 COCO stores during Q1 FY27 to reach 165 active stores, spanning 100 cities. It also expanded its MBO network to 2,250 stores across 701 cities.

Management reiterated it remains on track to add nearly 80 COCO stores during FY27. It also guided FY27 capex at around INR 100 to 120 crore, with about 80% allocated towards retail expansion, particularly the jumbo store format, and the remaining 20% towards manufacturing automation and other business upgrades.

The call also provided early color on jumbo stores. Management said civil work for the first jumbo store in Bengaluru is underway, with a targeted go-live of June-July next year, and the second store targeted for August-September next year.

What to track from here

Wakefit’s Q1 FY27 performance combined double-digit growth, stronger operating margins, and accelerating offline rollout. The key swing factor for the near term remains raw material volatility and how quickly pricing and sourcing actions offset it through H1 FY27.

Equally important is execution on store rollout and unit economics as the network scales. Management emphasized that stores are asset-light with limited inventory display and that new stores tend to lift the overall demand in a geography by supporting both offline and online purchases.

The quarter’s underlying message was disciplined execution. The company is expanding physical reach to strengthen brand salience, increase cross-sell, and gradually broaden the revenue base beyond mattresses, while keeping a close watch on input costs and channel dynamics.