01 — At a Glance
The Sleeping Giant That Woke Up With Kurlon
- 52-Week High / Low₹779 / ₹498
- Q3 FY26 Revenue (Consolidated)₹1,074 Cr
- Q3 FY26 PAT (Consolidated)₹52.1 Cr
- Q3 EPS (₹)₹4.80
- Annualised EPS (Q3×4)₹19.20
- Book Value₹283
- Price to Book1.79x
- Dividend Yield0%
- Total Debt₹1,257 Cr
- Mattress Market Share (India)~50%
The Foam Framing: Sheela Foam’s Q3 numbers are what happens when you buy a competitor (Kurlon @ ₹2,035 Cr), integrate it badly, then fix it quietly, then report that PAT jumped 212% YoY. Revenue growth at +11.1% YoY. ROCE at 3.52% (vs industry peers at 15–50%). P/E at 57.7x — meaning the market is either pricing in a miracle or betting that foam inflation is coming. Your bed might be more intelligent than this valuation.
02 — Introduction
The Company That Sells Dreams, But First Drowns In Debt
Welcome to Sheela Foam. Since 1971, they’ve been making polyurethane foam — you know, the spongy stuff that becomes your mattress, your pillow, your car seat, and possibly your worst financial decision at ₹2+ lakhs per bed.
The company operates under three beloved brands: Sleepwell (the OG), Kurlon (the acquisition they’re still digesting like a heavy meal at 2 AM), and Furlenco (furniture renting — because apparently buying a sofa is too 1990s). They’ve got 40% market share in Australia, 50% in India’s organised mattress market, and a debt of ₹1,257 crore that’s been growing like a fungal infection on a damp mattress.
Here’s the drama: In Oct 2023, they bought Kurlon for ₹2,035 crores, funded via debt. The integration was messier than a child’s bed at 6 AM. Q2 FY26 saw ROCE collapse to 3.52%. Management shuffle? Check — MD Nilesh Mazumdar resigned in March 2025, then again in July 2025. Rahul Gautam got promoted to Chairman & MD in November 2025. If they keep reshuffling, the board might start rotating like an earthmotion-foam mattress.
Now, Q3 FY26 shows the turnaround thesis actually working: Kurlon synergies kicking in, EBITDA margins recovering to 10.9% (from 8.3% a year ago), PAT expanding 212% YoY. But there’s a catch — this PAT still trails the company’s pre-Kurlon profitability profile. Welcome to the world where “recovery” means “no longer total disaster.”
Concall Note (Feb 2026): “Cash PAT for 9 months is ₹209 crore, which is cash EPS of ~₹19/share.” Translation: Reported profits are fake; real earnings are hidden in the depreciation line item. Also, management declined to guide on dividend, which every investor heard as “we’re saving cash to service that ₹1.2K crore debt.”
03 — Business Model: WTF Do They Even Do?
They Sell Softness in an Increasingly Hard World
At the core: India’s mattress and foam market is ~₹15,000–20,000 crore annually. Sheela Foam controls roughly 50% of the organized modern mattress segment (Sleepwell + Kurlon combined). The remaining 50%? Unorganized, zero-brand, buy-from-your-local-carpenter mattresses.
Their revenue mix (as of 9M FY26): Mattresses = 49% of sales. Foam (technical grades for auto/furniture) = 20–25%. Furniture cushions and other = rest. Geographically: India dominates at ~74% of revenue. Australia (Joyce Foam subsidiary) is ~12%. Spain (acquired 2019) = ~9%. The Middle East (GCC expansion in progress) = ~5%.
The business is capital-intensive. They operate 24 manufacturing plants globally with capacity of ~187,000 MTPA (metric tons per annum). The KEL acquisition added plants, capacity, and a new distribution model (MBO — multi-brand outlets — vs Sleepwell’s pure EBO model). They’re trying to blend them. Like mixing oil and water, but in foam form.
Mattress49%Revenue Mix
Foam21%Revenue Mix
Other30%Revenue Mix
Market Cap₹5,456 CrDebt: ₹1,257 Cr
U2O Play: “Unorganized to Organized” — a low-price, high-volume play targeting tier-2/3 towns and villages. 9M growth: ~100% YoY. 9M revenue: ₹75 Cr. Management target: ₹120 Cr run-rate. This is Sheela Foam trying to become a Jio of mattresses — disrupt the guy selling mattresses from a dhaba. Smart. Risky on margin if demand doesn’t grow fast enough.
💬 How many mattresses have you bought in your life? Did you choose Sleepwell because it was better, or just because your dad’s friend got a commission? Comment honestly.
04 — Financials Overview
Q3 FY26: The Numbers That Got Rescued
Result type: Quarterly Results | Q3 FY26 EPS: ₹4.80 | Annualised EPS (Q3×4): ₹19.20 | 9M FY26 EPS (rolling): ~₹8.27
| Metric (₹ Cr) |
Q3 FY26
Sep 2025 |
Q3 FY25
Sep 2024 |
Q2 FY26
Jun 2025 |
YoY % |
QoQ % |
| Revenue | 1,074 | 966 | 821 | +11.1% | +30.8% |
| Operating Profit | 114 | 88 | 75 | +29.5% | +52% |
| OPM % | 10.6% | 9.1% | 9.1% | +150 bps | +150 bps |
| PAT | 52.1 | 17 | 7 | +212% | +643% |
| EPS (₹) | 4.80 | 1.54 | 0.60 | +212% | +700% |
The Recovery Story: Q3 PAT at ₹52.1 Cr looks spectacular compared to Q2’s ₹7 Cr (which was borderline catastrophic). The jump is real: lower interest costs (debt paydown), higher operating profitability (Kurlon synergies), and better absorption of Kurlon’s depreciation. But compare to Q3 FY25’s ₹17 Cr and it’s still only 3x growth, not a miracle. OPM at 10.6% is healthy but trails the company’s pre-Kurlon 10–11% profile. The market is pricing in a continuation of margin recovery; any slip will hurt badly at a 57.7x P/E.
05 — Valuation: Fair Value Range Only
What’s This Debt-Laden Foam Maker Actually Worth?
