Sheela Foam Limited reported a strong performance in the second quarter and first half of FY27, with revenue growing by 19% and 22% respectively. The company announced the full consolidation of Furlenco, a furniture rental company, effective from October 1, 2026. This strategic acquisition is expected to broaden Sheela Foam’s business portfolio and market presence, contributing to future growth. The company also highlighted ongoing market challenges including raw material price increases and supply chain disruptions.
Sheela Foam Reports Strong Q2 and H1 FY27 Financials
Sheela Foam Limited announced its financial results for the second quarter (Q2) and the first half (H1) of the fiscal year 2027, showcasing robust revenue growth. On a consolidated basis, the company’s revenue for Q2 FY27 grew by approximately 19% year-on-year, reaching INR1,045 crores. This marks the third consecutive quarter of over 15% growth and the first time revenue has crossed the INR1,000 crore mark in a Q2. For the first half of FY27, consolidated revenue grew by 22% to INR2,077 crores.
Operating EBITDA for the quarter stood at INR87 crores, largely flat compared to the previous year, influenced by raw material price hikes and promotional expenses. PAT for the quarter surged to INR46 crores, a five-fold increase from the prior year. The H1 PAT rose to INR109 crores, more than six times the previous year’s figure.
Furlenco Acquisition and Strategic Impact
A significant development highlighted in the call is the full consolidation of Furlenco, a furniture rental company, effective from October 1, 2026. Rahul Gautam, Chairman and Managing Director, explained that this move expands Sheela Foam’s reach and diversifies its business model. Furlenco offers a catalog of over 300 products across more than 30 cities, with a subscriber base exceeding 200,000. The business model is asset-based, with high asset utilization.
In FY24, Furlenco had a revenue of INR139 crores and was incurring losses. Post turnaround efforts, it is projected to reach INR500 crores with a 40% EBITDA margin this year, growing almost 4x in revenue in three years. For the first half of FY27, Furlenco’s revenue grew by 34% to INR229 crores, with EBITDA up 69% to INR89 crores.
Market Environment and Outlook
The company discussed the challenging market environment, marked by a 50% increase in crude oil prices and significant raw material cost hikes for polyol (up 65%) and TDI (up 33%) since mid-February. Supply chain disruptions due to geopolitical events also impacted logistics. Despite these challenges, Sheela Foam focused on serving customers and leveraged its brand strength to pass on price increases.
Looking ahead, Sheela Foam anticipates the combined group to close the year with a revenue of around INR5,000 crores and an EBITDA of roughly INR600 crores. The company is also focused on its B2C portfolio and international operations in Australia and Spain.
Financial Details
Amit Kumar Gupta, Group CFO, provided detailed financial insights. Consolidated revenue for the half-year grew 22% to INR2,077 crores, with operating EBITDA up 23% to INR200 crores. Stand-alone revenue grew 17% to INR781 crores for the quarter, with EBITDA at INR61 crores. Segment-wise, mattress sales grew 11% and foam sales grew 26% in H1.
Furlenco, now a subsidiary, reported revenues of INR229 crores and EBITDA of INR89 crores with a margin close to 39% for its standalone operations. The company expects to provide volume growth for the Sleepwell brand and indicated that pricing strategies are being adapted to capture volumes without compromising gross margins.
Debt and Future Plans
Regarding debt, the current consolidated net debt stands at around INR600 crores. With the consolidation of Furlenco, which has a net debt of INR250 crores, the total is expected to be around INR800 crores. The company plans to use free cash flow to reduce debt by INR150-200 crores annually from its existing operations.
The possibility of Furlenco listing in the next year was mentioned, contingent on private equity holders’ rights for an exit route. Sheela Foam aims to create value for shareholders through Furlenco, with a focus on its unique advantage in the furniture value chain.
Source: BSE
