Sheela Foam Q1 FY27 Results (NSE: SFL)
Signal: Margin expansion
The read
The operating inflection continues with EBITDA margin at 12.1%, up 294bps YoY and the fourth consecutive quarter of margin expansion in the recent series, but Q1FY27's 25.6% revenue growth came with a 310bps gross-margin contraction as raw-material intensity rose to 57.6%; the earnings quality is diluted by ₹16.13 crore other income, a ₹6.26 crore exceptional gain and ₹3.11 crore JV profit.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹1,031.94 Cr | +25.6% | -1.7% |
| EBIT | ₹91.15 Cr | N/A | |
| Net profit | ₹62.34 Cr | +851.0% | |
| EPS | ₹5.63 | +838.3% | |
| EBIT margin | 12.1% |
P&L walk
Consolidated revenue grew 25.6% YoY to ₹1031.94 crore, but operating margin fell to 37.0% from 40.1% as raw-material cost rose to 57.6% of revenue from 52.8%; EBITDA still grew to ₹125.03 crore from an implied ₹75.23 crore as employee cost, depreciation and finance cost all declined or grew materially slower than revenue.
Segments
Outside-India revenue was the faster-growing geography at ₹262.73 crore, +42.1% YoY versus India revenue of ₹769.21 crore, +20.8%, although segment profit was not disclosed.
Key positives
- Consolidated revenue reached ₹1031.94 crore, +25.6% YoY, with outside-India revenue growing 42.1% to ₹262.73 crore.
- EBITDA increased to ₹125.03 crore, approximately +66.2% YoY versus revenue growth of 25.6%, a +40.6 percentage-point growth gap; employee cost grew 8.2%, depreciation fell 26.5% and finance cost fell 38.9%.
- EBITDA margin expanded to 12.1% from an implied 9.2% YoY, continuing the margin recovery visible across the last four quarters.
- Interest coverage improved to 5.12x from 1.33x YoY and debt-equity declined to 0.27x from 0.46x.
Key concerns
- Consolidated gross margin fell 310bps YoY to 37.0% as raw-material cost rose to 57.6% of revenue from 52.8%; revenue grew 25.6% while raw-material cost grew about 37.0%, indicating insufficient cost pass-through in the quarter.
- Consolidated PAT of ₹62.34 crore includes ₹16.13 crore other income, equal to 20.3% of PBT, plus a ₹6.26 crore exceptional gain and ₹3.11 crore JV profit.
- Sequential momentum weakened: revenue fell 1.7% from ₹1050.06 crore, EBITDA margin was broadly flat at 12.1% versus 12.0% implied sequentially, and PAT fell 32.1% from ₹91.77 crore.
Earnings quality: includes non-operating other income
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