HDFC Securities Backs Sheela Foam: A Strong Pick in the Home Furnishing Space

October 17, 2025: As part of the top ten Diwali picks, HDFC Securities recommends Sheela Foam Limited, best known for its flagship brand: Sleepwell Mattresses. It is a key player in the branded mattress and polyurethane foam industry. Besides the sectoral trends, HDFC Securities took into account other fundamentals and technical analysis to include Sheela Foam Limited in its Diwali Top Ten recommendations.
The Indian mattress sector is dominated by unorganised players and operates in highly unregulated conditions. Amidst such a set-up, the company has consistently delivered steady growth, supported by strong marketing and strategic acquisitions.

Company Overview

Founded in 1971, Sheela Foam Limited is India’s leading manufacturer of polyurethane foam and related products. Its product portfolio includes mattresses, cushions, pillows, furniture foam, and industrial foam applications. The company’s flagship brand, Sleepwell, has become synonymous with comfort and quality in the Indian market. It also owns the Kurlon brand, acquired in FY23, expanding its retail and manufacturing footprint pan-India.

Recent Stock Performance

Shares of Sheela Foam Limited have shown stable momentum in the past six months. The stock has plummeted by close to 25% in the previous year, thereby giving excellent value for the new investors. The total market cap of the company is close to ₹7.29 thousand crore, and the daily trade volumes have remained robust.

Fundamentals and Valuations of the Stock

The company has posted some strong numbers in the past few years. The year-on-year growth in revenue (FY 2025) was close to 15% with a marginal improvement in EBITDA. The integration of Kurlon Enterprises has expanded the company’s brand portfolio and enhanced distribution strength, making Sheela Foam one of the largest mattress manufacturers in India.
A strong shift towards premium products, such as orthopaedic and latex mattresses, has improved margins. The company continues to leverage brand recall through targeted marketing and digital-first campaigns to capture urban and Tier-II consumer bases. The end consumer has started to trust brands like Sleepwell more than before.
With over 60% of the mattress segment still unorganised, Sheela Foam stands to gain from increasing GST compliance, the growth of e-commerce platforms, and heightened awareness of branded comfort solutions. The company has strengthened its raw material supply chain with captive foam production and exports to 20+ countries. Expansion in the Middle East and Africa is expected to drive incremental revenue.

Key Price Levels to Watch

While the LTP is ₹678, and the target price is ₹837, the recommended buy range by HDFC Securities is ₹678-698.

What Makes Sheela Foal Ltd a Preferred Stock

Even though the stock has not performed well in the past year, the company’s fundamentals are quite strong. The sector (mattresses and home comfort) is also projected to grow at a CAGR of 8-10% in the next five years, as disposable incomes, real estate ownership, and urbanisation are all set to shoot up.
The company’s focus on cost control, backward integration, and brand-led growth provides resilience even amid raw material price fluctuations. With improving margins and higher premium product contribution, earnings visibility remains strong for FY26.

Risks to Consider

In the short to medium term, the stock has not provided exciting returns, and hence an investor should have a long-term view if an investment decision is to be made. Moreover, rising input costs and integration challenges while facing a large unorganised sector are major challenges that can impact the stock price negatively.