Sheela Foam: Leading the Charge in India’s Booming Mattress Market
The Indian mattress industry is experiencing a strong growth phase, with an increasing number of people demanding better comfort and quality in their sleep products, especially millennials and Gen Z. In 2023, the industry was valued at about ₹25,000 crores, and it’s expected to grow by 10% every year until 2030. The growth is particularly driven by rural areas, which still make up a large portion of the market. At the same time, more consumers are shifting away from traditional, unbranded cotton mattresses toward high-quality, branded options.
Among the leading companies in this organized sector is Sheela Foam Ltd. (SFL), which owns popular mattress brands like Sleepwell and Kurlon. The organized segment, where Sheela Foam is a major player, is growing faster than the unorganized one, thanks to the demand for better products. Sheela Foam is well-positioned to take advantage of this shift and expand its reach across the country.
SHEELA FOAM: A KEY PLAYER IN THE MATTRESS INDUSTRY
Founded in 1971, Sheela Foam has become a leader in India’s mattress market. The company is known for its flagship brand Sleepwell, which holds a significant market share. Recently, Sheela Foam expanded its presence by acquiring Kurlon, another major mattress brand. This acquisition has allowed Sheela Foam to strengthen its position in the market, as Kurlon has a strong presence in the southern parts of India, while Sleepwell dominates the northern and western regions.
By integrating Kurlon, Sheela Foam can now tap into new regions, improve operational efficiency, and save costs. This integration will help boost the company’s growth even further.
PERFORMANCE AND FUTURE GROWTH
Sheela Foam’s performance has shown positive results, especially after acquiring Kurlon. Both Sleepwell and Kurlon saw significant growth, with Sleepwell’s volume increasing by 40% year-over-year and Kurlon growing by 26%. This reflects the successful integration of both brands.
Sheela Foam is also expanding its product offerings beyond mattresses. With a focus on technical foams, which are used in industries like automobile seating, home furnishings, and healthcare, Sheela Foam is diversifying its business to reduce dependence on a single market and open new revenue streams.
Additionally, Sheela Foam has invested in Furlenco, an online furniture company. Increasing its stake in Furlenco from 35% to 45%, the company aims to take advantage of the growing online furniture market. This move is part of Sheela Foam’s broader strategy to diversify its portfolio. Furlenco aims to reach INR 500 crore in revenue by FY28 and is considering an IPO in FY27. The subscriber base has doubled, and the business is now cash-generating.
Consolidated net profit decline attributed to increased interest and depreciation costs from the Kurlon acquisition.
INSIDER DEALS
Promoter acquiring shares Via Market Purchase since Nov,24. The total No. of shares acquired is 180000 worth 14.60 Cr. (0.15% of total Market capitalization). In Aug 20, Promoter Tushar Gautam disposed 10 lacs shares vis Off Market at price of Rs.1358 per share. Now on Nov 24, many other promoters are acquiring shares at the Avg price of Rs. 811 per share.
TECHNICAL ANALYSIS
SFL is facing resistance at ₹973. A close above this level could lead to further upside towards ₹1067-₹1297. Currently, the stock shows a neutral trend and is in an oversold zone, making it a good opportunity to accumulate with low risk. Support is strong at ₹785, offering a solid floor. If SFL breaks the ₹973 resistance, a positive rally is likely.
THE ROAD AHEAD: A BRIGHT FUTURE
As the mattress industry in India continues to grow, Sheela Foam is well-positioned to benefit from this trend. With the growing demand for high-quality mattresses and a shift toward organized brands, Sheela Foam’s commitment to innovation, product quality, and sustainability will continue to drive its success.
The company’s focus on expanding its presence in urban areas, through brands like Tarang and Aram, will help it tap into the growing middle-class population. The integration of Kurlon has already resulted in cost savings and enhanced production capabilities, setting the stage for continued growth.
Sheela Foam is also focusing on technological innovations, like Variable Pressure Foaming (VPF) technology, which will improve the quality and sustainability of its products. The company expects double-digit growth on both a quarterly and yearly basis, targeting a 14-15% CAGR from FY25 to FY27 in the India business, alongside a 14-15% EBITDA margin. The target ROE is set at 18%.
With its strong track record, strategic investments, and focus on sustainability, Sheela Foam is set to lead the Indian mattress market for years to come.
In simple terms, Sheela Foam is not only growing its business in mattresses but also diversifying into other areas like furniture and technical foams. The company’s forward-thinking approach and commitment to quality will help it stay at the top of the mattress industry in India.
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