Sheela Foam’s Q2 FY27 Revenue Tops ₹1,000 Crore as Shares Fall 7.6% - Markets and investing

Sheela Foam reported 19% year-over-year revenue growth and a fivefold rise in quarterly profit, while operating EBITDA remained flat amid higher input costs and brand spending.

Sheela Foam reported consolidated revenue of ₹1,045 crore for the second quarter of FY27, up 19% from a year earlier and the first time quarterly revenue crossed ₹1,000 crore. Profit after tax rose to ₹46 crore from ₹10 crore in Q2 FY26, while operating EBITDA was unchanged at ₹87 crore. The company’s shares fell 7.64% to ₹508, compared with the previous close of ₹550.

Management described the quarter as resilient despite steep increases in key raw material costs and soft demand. Chairman and Managing Director Rahul Gautam said polyol prices had risen 65% and TDI prices 33% since mid-February. He said the company passed some cost increases on to customers but also faced affordability limits, and chose to maintain investment in advertising and consumer offers.

Operating EBITDA margin was 8.4%. Reported EBITDA came to ₹83 crore after a one-time ₹7 crore provision related to Australian customer A.H. Beard, which entered administration. For the first half, revenue increased 22% to ₹2,077 crore, operating EBITDA rose 23% to ₹200 crore, and PAT reached ₹109 crore, compared with ₹17 crore in the same period a year earlier.

Sheela Foam said this was its third consecutive quarter of revenue growth above 15%. Management attributed some of the sales growth to price increases, while noting that higher prices and affordability constraints had weighed on volume. It said it had prioritised protecting absolute profitability over pursuing volume at any cost.

Furlenco became a Sheela Foam subsidiary from October 1. The furniture-rental business recorded first-half revenue growth of about 34% to ₹229 crore and EBITDA growth of about 69% to ₹89 crore. Sheela Foam expects Furlenco to contribute ₹500 crore to ₹600 crore in revenue and about ₹200 crore in EBITDA in FY27.

For the combined group, management is targeting approximately ₹5,000 crore in FY27 revenue and around ₹600 crore in EBITDA, with a margin slightly above 12%. Sheela Foam alone is expected to generate ₹4,300 crore to ₹4,400 crore in revenue and ₹400 crore to ₹450 crore in EBITDA. Management said a recovery in margins will depend largely on raw material prices and logistics costs easing.

Sources: Investing.com News.