Sheela Foam's 'IND AA'/Stable Rating Reaffirmed by India Ratings; Issuer Rating Withdrawn
India Ratings has reaffirmed Sheela Foam Limited's (SFL) bank loan facilities and NCDs at 'IND AA'/Stable, while withdrawing the Issuer Rating. SFL's consolidated revenue reached ₹38,208 million in FY26, with projected 10%-12% growth in FY27. Net leverage improved to 1.9x in FY26, expected below 1x by end-FY27. Debt reduced significantly to ₹7,137 million.
Credit ratings are crucial for a company's borrowing costs and investor confidence. A stable and strong rating like 'IND AA' signifies a lower risk for lenders and investors, potentially leading to better access to capital and favorable financing terms, thus having a high impact on the company's financial strategy and operations.
The reaffirmation of a strong credit rating ('IND AA'/Stable) by India Ratings, coupled with positive commentary on improved credit metrics, revenue growth, and debt reduction, indicates a favorable financial outlook for Sheela Foam Limited.
Sheela Foam Limited (SFL) announced on September 08, 2026, that India Ratings and Research (Ind-Ra) has reaffirmed the company's credit rating for its bank loan facilities and non-convertible debentures (NCDs) at IND AA/Stable. The rating agency has also withdrawn the Long-Term Issuer Rating for SFL, a decision consistent with Ind-Ra's policy on rating withdrawals, as per the issuer's specific request.
Ind-Ra's analysis indicates SFL's consolidated revenue grew to ₹38,208 million in FY26, with expectations of a 10%-12% year-on-year growth in Indian operations for FY27. Consolidated EBITDA margins remained stable at 10.6% in Q1FY27, and are expected to improve to 10%-11% in FY27. The company's consolidated net leverage has improved significantly to 1.9x in FY26 from 3.3x in FY25, with an expectation to fall below 1x by end-FY27. The company's gross debt has decreased substantially to ₹7,137 million in FY26 from ₹12,165 million in FY25, with NCDs expected to be fully repaid by mid-FY27.
The rating reaffirms SFL's strengthened market position, driven by increased online branded mattress sales and a growing distribution network. The company's historical success in acquisitions, such as KEL and Joyce Foam, is also noted as a key strength. However, Ind-Ra acknowledges SFL's exposure to economic cyclicality, volatility in raw material costs, and forex risks.
Liquidity is assessed as adequate, with strong cash balances of ₹1,703 million in FY26 and positive free cash flow generation over the past decade. Total debt repayment obligations of ₹4,370 million in FY27 are expected to be met through internal accruals and existing credit lines. Ind-Ra anticipates further improvement in credit metrics, with net adjusted leverage expected to be below 1x by end-FY27.
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Sheela Foam Limited filed this with the NSE as a statutory disclosure, categorised under credit ratings. It is a primary document, not a recommendation, and the desk marks it high impact, which is the band that most often changes something.
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See the model portfoliosA plain-language summary of a public exchange filing by Sheela Foam Limited. Read the original for the full detail.