Sheela Foam Limited (NSE: SFL) Q4 2025 Earnings Call dated May. 15, 2025
Corporate Participants:
Rahul Gautam — Executive Chairman
Amit Kumar Gupta — Chief Financial Officer
Rakesh Chahar — Whole-Time Director
Tushaar Gautam — Managing Director
Analysts:
Ritesh Shah — Analyst
Arun Malhotra — Analyst
Aishwarya Mahesh — Analyst
Rahul Agarwal — Analyst
Nikhil Upadhyay — Analyst
Varun Singh — Analyst
Jaineel Jhaveri — Analyst
Rachana — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to Sheela Foam Limited Q4 and FY ’25 Earnings Conference Call hosted by Investec Capital Services India Private Limited. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded.
I now hand the conference over to Mr Ritesh Shah, Head, Mid-market Coverage and ASG from Investec. Thank you, and over to you, sir.
Ritesh Shah — Analyst
Thank you,. Welcome all for conference call. We have with us senior management of the company, including Mr Rahul Gautam, Executive Chairman; Mr Tushar Gautam, Managing Director; Mr Amit Kumar Gupta, Group CFO; and Mr Rakesh Shah, Director.
Rahuji, I would request you to start with some initial remarks, post which we can have a Q&A session. Over to you, sir.
Rahul Gautam — Executive Chairman
Thank you so much. Thank you, Ritesh. Thank you. Thanks a lot. So good evening, everyone, and thank you for joining us for our earnings conference call for the 4th-quarter and financial year ending 2025. Along with me today, we have Mr Tsar, Mr Rakesh Shahar and Mr Amit Gupta. Let me first take you all through the major developments in the company for the periods under review and then Amit will take you through the financials.
In the 4th-quarter, on a Y-on-Y basis, we saw strong growth in our standalone business. As part of integration plan, most of Kirlon brand sales were routed through SFL through, aiding in revenue growth. Our focus driven marketing and consumer engagement strategy also played a pivotal role to ramp-up the sales.
Financial year 2025 marks the first full-year of the combined operations for the Indian business, that is Sheila and Enterprise Limited. I’m happy to report that our strategic plans are playing out as planned. The various initiatives taken across the company on cost rationalization have already and will continue to improve profitability in coming quarters.
In FY ’25, the gross margins of 42.5% reflect annual cost-saving run-rate of INR120 crores. Additional savings of another INR130 crores have already been executed and the impact of which we will soon see and will get reflected in our performance in coming times. The headwinds in consumer durables are known to everyone, impacted the sales of FY ’25, thereby limiting — limiting us to achieve evasive double-digit EBITDA margins that we were looking for.
On the metal side for FY ’25, we achieved a high-volume growth on a year-on-year basis. However, the same is not yet reflecting in revenue growth due to expansion of volume-driven the e-commerce business and the small town initiatives that we have taken are in that category — in those categories. To ensure greater market penetration, we focused on expanding our network of showrooms.
I’m happy to share that we added nearly 400 exclusive showrooms and appointed 1,700 dealers in FY ’25. Showroom expansion remains a key focus area for us in FY ’26 as well, wherein we plan to add more than 1,000 new touch points. We are enhancing our presence in MBOs which allow for a higher counter share. Wherever possible, we are adding new distributor-owned outlets under both Sleepwell and.
We also continue to witness widespread adoption of small-town initiatives, which are now available in more than 4,000 towns in India and is showing very encouraging growth levels. The company is focusing on appointing these STI-specific distributors who will work solely in this category. And I just repeat that, that these will be over and above the existing distribution system that we have.
In the B2B segment, technical foam had steady volumes in FY ’25. We maintained our share in the auto lamination industry. We are also developing new products for industries such as the aviation industry, ceramic filters, acoustics, that is the gensets and the silencing of the gensets as also footwear insoles. We are also leveraging the furniture form or cushioning under the KEL or under the brand to gain strong footroll in the north and west of India.
Our Comfort foam segment has had strong growth both in terms of revenues as well as volume during the year. Here, we have expanded our dealer network by adding nearly 1,000 plus new dealers. So as I’m mentioning that the volume definitely has gone up, but because of lower raw-material prices, the value or the top-line is yet to reflect the increase in the market that — or increase in the market-share that we have.
Now demonstrated a strong performance during this year. It achieved its full first year of positive profitability in FY ’25. The existing ARR in March ’25 stood at an INR300 crores. The ASP crossed above INR1 lakh in FY ’25, which demonstrates a healthy penetration and adoption of Ferlanco’s offerings.
Furthermore, we launched Furlanco in few new cities, including Indor, Kolkata and Ahmedabad. To appeal to our GenZ audience, they’ve also launched new product portfolios those cater to their and needs, which are very different from and coming to the performance of, which is our IC initiative. The growth journey continues in FY ’25 with revenues growing by 61% year-on-year with EBITDA margins of around 28%. We onboarded several new clients across PSUs, MSMEs, along with the private — along with the other private domains.
To conclude, we are on-track to unlock the full potential of the Indian business in view of further streamlining and rationalizing our India operations, we have monetized three manufacturing facilities, namely in Bangalore, Rajpura in Punjab and in. Through these concerted efforts, our manufacturing facilities, which were hovering around 18 are now rationalized to 12 and we strongly believe that these 12 are good enough to cater to the needs and requirements of both the brands and of the comfort phones and the — and the B2B businesses at least for the next three years.
On the international front, in the Australian business, we were able to receive the price increase. It took a little bit of time, but finally able to receive the price increases from our majority of our customers, thereby improving profitability. We are also onboarding alternate raw-material suppliers, which will further enhance business profitability.
In Spain, the capacity expansion contributed to volume growth of more than 15% during the year. However, the revenue for reasons which I mentioned before, where the raw-material prices are — are very low, the revenue was limited by lower raw-material prices. Utilizing the enhanced capacity led to increased overheads, which in-turn impacted our margins and profitability for the year. As we wait and as we see that the raw-material prices are beginning to move-up, these issues will get sorted-out. As I look-back in the last few quarters, clearly the impacts of acquisition have stabilized and definitely the worst is behind us.
With those words, I hand you over to Amit to take you through the financials.
Amit Kumar Gupta — Chief Financial Officer
Thank you, sir, and good evening, everyone. I am Amit Kumar Gupta. Let me take you through the financial performance for the 4th-quarter and financial year ending 2025. For the 4th-quarter under review, on a standalone basis, we reported revenues of INR6,91 crore. EBITDA for the quarter stood at INR46 crores with EBITDA margins at 6.6% for the quarter. Net profit was reported at INR12 crores. For the financial year ended 2025, the standalone revenue was around INR2,600 crores. EBITDA for the period was at INR235 crores and EBITDA margin reported at 9.1%. Net profit was reported at INR112 crores.
On a consolidated basis for the 4th-quarter, we reported revenues of INR850 crores. EBITDA for the quarter stood at INR69 crores and EBITDA margins were reported at 8.1%. Net profit stood at INR22 crores. For the financial year ended 2025, we reported consolidated revenues at around INR3,500 crores. EBITDA for the period stood at around INR300 crores with EBITDA margins at around 8.3%. Net profit stood around INR100 crores.
One thing that I would like to mention here, though on an operational front, we performed better in 2025, improving our gross margin. And the flow of profitability to the bottom-line was limited because primarily because of enhanced interest cost on the debt that we had undertaken for loan purchase and also on incremental depreciation since, it was the first full-year of with us, the depreciation for the entire year was combined. However, we believe that in the next two to three years with our growth targets that we have, as the top-line grows and we are able to repay the debt, we should be able to reach profitability matrices which were better than what we enjoyed in the past.
With that, we can now open the floor to questions-and-answer session.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on your touchstone telephone. If you wish to withdraw yourself from the question queue, you may press star and 2. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Arun Malotha from Capgro Capital. Please go-ahead.
Arun Malhotra
Yeah, good afternoon. Just wanted to understand, I think we have seen a couple of quarters after the merger has happened, we are still not seeing the profitability. Is there any structural problem with the business itself? That’s one. And second, hopefully, the synergies should have come by now and we should have seen higher margins, but that is nowhere to be seen.
Rahul Gautam
Thank you for the question and this is something which we discuss and talk about all-the-time. Our analysis is that there is no issue with any structural or there is no structural problem. It is just that the two companies which are operating in completely different manners have to be integrated.
On the back-end side of it, there was not much of an issue because of production and manufacturing is very similar. However, it’s on the front-end part of it. There was one, which was going directly to the dealers and to the customers, while for Sheila, it was through distributors, etc. Now to merge those things together to find out which is the best route to the market, et-cetera, it has taken a little bit of time, but there is no structural problem.
And I appreciate your point-of-view of saying that for post — I mean, somewhere the lower performance of the company seems to be coinciding with the acquisition part. But to us, we believe that it’s a bit of a coincidence. Many things have kind of happened together. But otherwise, as we kind of come out of it, as we conclude the acquisition and the integration, we believe that the worst is behind as people move forward.
Amit Kumar Gupta
And also on the synergy front, yes, on synergies front, as you mentioned, so we currently are looking at it very closely and that’s why we can say that around INR120 crores worth of run-rate by end March ’25 is already there, which to some extent is also reflected in the gross margins of the company. However — and also if we go down below the gross margins with combined overheads of Shila Foam and Karlon, during the year, we were in the process of pruning the same and creating it into one organization and optimal overhead structure.
We have been able to a large extent successful as you would have seen that we have reduced our number of plants from 18 to 12. All those administrative overheads and manpower cost in those plants have gone away. But they have taken place over the entire last year. So full-year reflection would come for the first time this year.
In 4th-quarter, we were pretty confident that it would be reflected. But unfortunately, there were certain tailwinds because of the environment in the consumer space because of which our top-line was restricted to the amount at which it is. Had we been able to achieve even 10% higher than this, we would have achieved our double-digit margins, which we are looking-forward to in the coming quarters.
Arun Malhotra
Sure, sure. I appreciate the confidence which you are showing and you have also shown in the past. But since it is not reflected in the numbers, I am again repeating the same thing, the market is now losing the credibility, which can be seen from the past performance of the stock, which is now below the IPO price last four, five years, the stock has — the stock performance is negative. So are we also concerned about the shareholders? And you’re trying to do something in that direction.
Rahul Gautam
So we are definitely concerned about all the shareholders and you know what you have stated is is based on numbers and on fact that this is how it has kind of panned out. But I mean the confidence that you talk about it, I don’t want to Call-IT confident, but I just want to say that it’s a positive — very positive outlook that we have here.
And undoubtedly, it has it has taken far more as far as effort and energy and time was concerned in integrating the two. I say it but at the same time I also see that two organizations of this level and this set of complexities, we have done reasonably well for integrating them. And now that we are almost at the flag end of it, it should only — it should show positive part.
Arun Malhotra
Sure. And last thing is, let’s say, I take you forward — forward for three years, what could be the shape of the business in terms of profitability, margins, growth? What is the — what are the industry trends, which you think being a market-leader now with the consolidated entity, you could actually capture those margins, profitability and the market shares on the growth. I’m three years forward aims. Yeah.
Rahul Gautam
Yeah, yeah. So I would say that, look, as far as the general uncertainty about everything is concerned that’s ever-increasing. But having said that, if you just look at the areas or the market size or the potential of the market size that exists, I think it doesn’t matter if the conditions get very adverse or very bad, still there would be enough for us to grow.
So whatever is our — is our targets that we have taken for and I would let Amit answer that have we have taken forward, if we should be least impacted by environment changes. Of course, availability of raw materials, any logistics issue happening globally, et-cetera, those could for a little while impact. But otherwise, as far as the markets, the markets in India are concerned, we all know that should be there. But I mean it’s just what we have projected.
Amit Kumar Gupta
And yeah. So Sanjay, I think the — I can give you simple numbers, but that won’t help. So let me give you a little bit of how we intend to approach this particular thing and keep the place where we are looking to reach. So if you see during the last one year, our business from — structurally, that is the operating business has become more efficient. Yeah, it has become more profitable. Our problem simply has can you hear me? Am I audible?
Arun Malhotra
Yes. Yes, I can hear you.
Rahul Gautam
Yeah, so for somebody else should.
Amit Kumar Gupta
So now since both the organizations have now been combined, the next job for us was to create an overhead structure, which was optimum for a organization of our size. In that also, we have been pretty successful. If I compare on a like-to-like basis, our cost in-spite of inflation have not gone up.
Now the important thing that we need to work on now is how do we increase our top-line. And I think we have taken positive steps in this direction in the last one year. Our share on the online segment has gone up. We are currently around INR175 crores to INR200 crores on the online segment. Historically, we could touch only 100, 100 tons and also in the small town initiative, we are — we will be touching very soon INR100 crore mark-on that particular segment. So this helps us in two-ways. One, it increases, gives us additional revenue. And secondly, it gives us additional market where we are selling our products.
So if you see, we are moving in a direction where growth should come and we should further strengthen our leadership position. Now given this background, we believe and we being a company which is at 30% plus contribution margin company, we have our products are of such nature. I believe that as soon as we are able to achieve some growth on the top-line, this would definitely be reflected in the bottom-line and that is what our focus area now is for this year as well as for the next two years.
To give you numbers and I have given it in the past also, I would retain my number that we intend to grow in India by around 15% per annum for the next two, three years. And our EBITDA margins should be somewhere around 13% 14-odd percent in three years. If you ask me, maybe it’s at a 15%, that’s my internal target, but you can take it, it will definitely be higher than 12-odd percent. The only thing is that we should be growing now from here from a top-line perspective, which we are pretty confident of.
Arun Malhotra
Thank you.
Amit Kumar Gupta
Thank you.
Operator
Thank you. The next question is from the line of from iThought PMS. Please go-ahead.
Aishwarya Mahesh
Hi, sir. Am I audible?
Rahul Gautam
Yes. Please go-ahead.
Aishwarya Mahesh
Yes. So my question is regarding the top-line because business in itself is like a moderate growing business because if I buy a mattress, let’s say one mattress is for about 35,000 or something, it will go and it will last for me up to seven to 10 years around there. So what generally happens is we can see that the top-line is moderate growing. And I was expecting a conservative number, but then you did the guidance was given that we will be performing about 14% to 16% up and we did perform somewhere near to that at least 12% from last year.
And what I’m trying to understand is that since you have onboarded new products and your new products in the Tarang and Aram in the rural area, but that cost would be like much lower than the cost of mattresses which is available in Tier-1 cities. So unless we do good in volume terms over there, there or you know it’s still like a moderate growth. Then how will we be achieving the guidance which we are giving today? And the other cost — other question is regarding debt because this year, since the interest costs are higher, in how many years will we be having more debt? That’s another question sir.
Rahul Gautam
Okay,, thanks, so I’ll let Mr Rakesh Shahar answer this as to the impact of Aram and Tarang and you said that the costs in the Tier-1 cities is lower than the cost of Aram and. So yeah. So and is high, that’s right. I mean there were other mattresses available, which are lower than that price and therefore, how do you intend to compete? Is my understanding right?
Aishwarya Mahesh
Yes, yes, sir.
Rakesh Chahar
Okay. So we have a — we have a large EVO network, which is almost about 2,500 showrooms. So there, the journey will be of premiumization. So there is already a program that we have initiated to upsell, which is both on the product side and also the softer issues with the retail partners that how do we engage consumers, elevate their interest in sleep and the role of a mattress in good sleep and therefore able to sell a high mattress. So that’s the journey as far as the showrooms are concerned, we will show.
As far as the Tarang and Aram are concerned, I mean, it has market in the rural area and also the smaller shops in the urban area. So we are — we have put a structure in-place because we are very weak in the urban area. We were only driving this product so-far on the rural side. So recently we have introduced it in the urban side, restricting it to a level where the small country shops can carry it because normally the mattres are sold along with the furniture. So they will have both different treatment from our types over premiumization in the EPOs where 75% business is coming, that will not get impacted. And here, we will get additional sales where we are not present today. So that’s how we are looking at it.
Rahul Gautam
Okay. And Amit, can you respond to her question on the interest part of it. As we go-forward, there is a large interest component which is there. And till when will that kind of continue and when will we be able to clear that.
Amit Kumar Gupta
So, there are — we currently have a debt of around INR700 crores INR750 crores on our Indian balance sheet against which we have a cash of around INR450 crores. We expect to generate with a level of profitability around INR100 crores to INR150 crores per annum for the next and growing at the rate at which it should grow for the next two to three years. In addition, we are also monetizing certain real-estate, which is because of the closure of plant which Rahul ji mentioned in the part of his speech, which should spend us around INR200 crores and this is we are trying to monetize in the next one year, that is in the current financial year.
So I believe that with all this, we should be able to deleverage our Indian balance sheet fully in the next two to three years after which the interest component which you currently see at around INR100 odd crores should be reduced only to working capital interest of INR10 crores, crores per annum. So that should be the trajectory of it.
Aishwarya Mahesh
Understand, sir. I have a last question regarding the other D2C brands which are actually raising money to break the market-share because they are not profitable yet, but they are creating market-share. Share and you are giving some various schemes, which actually customers are lowered by. So what I want to understand is that are we still open for any other acquisitions as a company, not just for the mattresses or any other product which will complement the business?
Rahul Gautam
No, at the moment, we are not looking at any other acquisition. We would want to settle this down. I think dealing with two large brands and get them to move to their destinies, it’s going to be a task. And I think all efforts and all resources of the company should be focused on that.
Amit Kumar Gupta
And secondly, if you see, we are now leader span India. So routes in the north and the West and third on routes in the south and the east. At any point of time, it would always make sense for us to do an organic growth rather than spending too much money on an.
Now, as you mentioned that there are people who are competing with us and they, they may, they are they may take a little bit of our size I can tell you that they can — they are only present in top-tier urban places where they can make a chipping impact. The way we are countering and the way mentioned that we are opening showrooms. We opened around 700 last year. We will open around 1,000 in the current year. So we are growing much faster than them. And apart from that, we are again creating market development strategies on the online and the FTI segment.
So being a leader, yes, we cannot behave like them because their are much lower. We need to develop PAN across the country. So we need to follow different strategies. But I can tell you that with these strategies, our objective is to get a very strong foothold in the country, which we can do for the strength of the two core brands and keep growing. The other brands may also grow, but yes, the market is very large for accommodating them as well.
Aishwarya Mahesh
Thank you so much for answering the questions, sir. Thank you.
Operator
Thank you. The next question is from the line of Rahul Agrawal from Asset. Please go-ahead.
Rahul Agarwal
Yeah, hi. Very good evening, sir. Sir, few questions or a few clarifications. Firstly, you gave a guidance of 15% CAGR with 13% 14% margins. I believe that is more for the mattress only, right? It doesn’t include the B2B part. Is that correct?
Rahul Gautam
, you’ll have to speak up a little louder. The voice is just not coming through.
Rahul Agarwal
Is still better?
Rahul Gautam
A little better.
Rahul Agarwal
Okay. Firstly, some questions and some clarifications. I wanted to clarify that the 15% CAGR growth on revenues and 13% to 14% margins. This is only for the mattress business. It doesn’t include the B2B part. Is that correct?
Amit Kumar Gupta
No, that’s incorrect. Mattress should grow even higher. See, this is a combined growth for the entire India business, including the B2C, B2C and B2B businesses. So B2B businesses will have — are expected to have a little bit lower-growth because we have segments like technical depend on End-User industry. But metrics should be higher because we combine one organic growth of the industry coupled with growth in the new markets that we have opened, which is FTI and maybe online segment.
Rahul Gautam
So in short, it is for the entire business. Entire India business. That’s right.
Rahul Agarwal
Got it. Perfect. And then now just further breaking it down into B2C and B2B. B2C essentially because of the mix change and higher-growth into smaller towns as well as Aram and Tarang, obviously, we are looking at a bit lower ASPs. So my belief is that increment growth on mattress, which will be higher than 15%. So let’s say, for the sake of discussion, it’s 16% 17% Y-o-Y on a CAGR basis should largely be driven by volume. Is that understanding correct?
Amit Kumar Gupta
So volume growth will be higher than value growth. You are right because there are different segments and different price categories. That way you are right.
Rahul Agarwal
Okay. Okay. I get it. And on the B2B side, though on a full-year basis, I believe the numbers are okay. But when I look at the trends, it looks like the ASPs are up, but the volumes are down meaningfully in 4th-quarter. So is it more seasonal or is it any other reason why the foam, the B2B volumes are down this quarter on a Y-o-Y basis?
Amit Kumar Gupta
Yeah. So two reasons I can tell you. First, I will, I’m. So two reasons I can tell you. One, we took certain price increases in this quarter in matrices specifically. And second, 3rd-quarter online was the highest, which to some extent impacts the ASP. So in the 4th-quarter, that impact was a little bit lesser and that’s why we could see better ASPs in 4th-quarter than the 3rd-quarter.
Rahul Agarwal
So actually my question was on ASPs for B2B products, not for the mattress. My question is, I’ll just repeat myself on B2B, on the 4th-quarter performance, what I see is the pricing has actually gone up, the selling price on a tonnage basis has gone up, while the volumes are down like almost 15% 30% maybe for some segments. Any particular reason for that? That was the question.
Amit Kumar Gupta
So I’ll tell you, so if you see there were certain price increases in B2B segments also. We should have taken these price increases in the earlier quarter that would have impacted, but there is a combination of impact on opposite side, one raw-material raw-material prices were coming down. So because of that there was pressure on pricing. And on the other hand, we took price increases to compensate for what we should have done in the previous quarter. The volumes are different and especially, you will see that in comfort foam. But other than comfort foam, I think volumes and values should matter, right?
Rahul Agarwal
Yeah. Okay. So is this price hike decently absorbed in the market on the B2B side? And incrementally, we should see like a steady 8%, 10% CAGR on volumes irrespective of what happens to the price because that anyway out of anybody’s control. Is that understanding correct?
Rahul Gautam
Yes, that understanding is correct.
Rahul Agarwal
Okay, perfect. And just few clarifications. On the notes to accounts, there was adjustment on goodwill purely coming from accounted as other income for working capital adjustments. There was something written on the government grants of INR46 crores and then we have this asset sales of INR45 crores, which are supposed to happen at about INR200 crores over the next 12 months is what you will try for. So asset sale is pretty clear, but could you clarify on the goodwill adjustments, where-is it booked as other income. And as for government grants, what is that about and how will that get accounted for this?
Amit Kumar Gupta
So I’ll take the government grant first. This government brand is on Jabalpur plant. We got a total incentive of around INR45.7 crores, you can look at the MOOC to the financial statements which we released. This is to be received over a period of seven years based on which an income of — operating income of INR7.25 crores has been booked in the current quarter. So this is the income for the financial year ’24 ’25. Since we got the letter in the current quarter, we could not have booked it earlier. We booked it in this quarter.
Rahul Agarwal
So this is booked as revenue, is it? Is this booked as revenue or is it booked as other income?
Amit Kumar Gupta
It is booked, I will have to check, okay, no problem, we can move forward. Yeah. The second part is you are referring to adjustment on account of acquisition. So we estimated a definite amount of money which we should have received on account of indebtedness and working capital from the seller. These are estimated initially when you account for based on purchase price allocation at the time when we did the acquisition.
However, things had become pretty clear by the 3rd-quarter. And in the 3rd-quarter, we adjusted goodwill to reflect the real position which we were leading to in discussions and negotiations with the suppliers. So the liability that we had created was adjusted with goodwill to the amount that we needed to pay them, we needed to pay amount, so that liability was reduced.
Rahul Agarwal
So this is — is this a cash inflow in any manner or this INR36 crores?
Amit Kumar Gupta
INR35 crores is not a goodwill adjustment. So you are mixing two things. Goodwill adjustment is a INR30 crores, which we did in-quarter three. This INR35 crores is the amount that we received on account of imaged and spoiled inventory, which was there in the warehouses, which we discovered when we cleared the warehouses.
So when we cleared the warehouses, we found that there were wraps of matrices which were lying in the bottom for years and they were not of that value. We put a claim on the sellers and we could realize INR35 crores under that. However, as per accounting, if you receive any money from sellers, you cannot account for it in raw-material. You have to account it as other operating income. We could have adjusted it to consideration, but that was allowed only till 12 months. So we accounted it as other operating income, which is appearing there.
Rahul Agarwal
Perfect. So this really helps for getting into so many details and I’ll get back-in the queue, sir. Thank you so much and all the best. Sir.
Amit Kumar Gupta
No, also Rahul, you can also call me in case you need more clarification, please.
Rahul Agarwal
Thank you.
Operator
The next question is from the line of Hitesh Shah from Investec. Please go-ahead.
Ritesh Shah
Yeah, hi, sir. Thanks for the opportunity. Sir. Couple of questions. First to start with distribution. I think, sir, you indicated a number, we added 400 exclusive showrooms. I think after that the number was given 700. My question was, is it possible if you can quantify the actual number for EBOs, FBOs that we have right now? And basically you indicated a target, I’m not sure whether it was 400 or 700.
Amit Kumar Gupta
Think you are right, it was 400. Maybe I spelt it longer than 700 so 400 is clarify.
Ritesh Shah
Perfect. And right now. Yeah. Okay. Here it is gone. Yeah, number sir. Basically where we are on absolute number from account standpoint.
Rakesh Chahar
So the absolute numbers would be like we have if we have showrooms which are which are a display format for retail, there we have a total of about 2,500 in and around 500 in. So it’s about 3,000 showroom formats. If you talk about the overall the network, that is about 11,000, both and Karnan put together. So 3,000 and 3,000 outlets, they constitute about 70% of the business.
Ritesh Shah
Sure. Sir, would it be possible for you to break the revenue-based on the different channels? So I think for D2C, Amit, it did indicate that we are looking at like INR175 crore to INR200 crores. But would it be — would you be comfortable to break it up between, say, EBO, MBO, D2C, small town initiatives? And basically it gives us a yardstick to understand how the company is doing.
Rakesh Chahar
So we can indicate broad percentages what we are looking at, but getting down to the channel would be too much going down in the retail.
Amit Kumar Gupta
So Ritesh, we can’t exclusively discuss the numbers. You know that these are trade elements, but I understand your concern and maybe Rakesh, you can give broad percentage.
Rakesh Chahar
Or I can also — Ritesh, I can also — we can discuss this on one-on-one. So there are see — on a macro-level, there is a B2C, which is — which we Call-IT a journal trade. This is about channels. So there is an initiative to get — drive growth there. Then we have the e-com bit where I mean, we have space for much faster growth to where we’ve taken a much higher number. The STI is a category creation. So it has reached at a run-rate of INR5 crores where we have a bigger target to grow there. So it is structured like that.
As far as the B2B and comfort foam business is concerned, they are also a — there is a growth plan around that, which is both new categories, application development. So that also is a vicinity of about 12% to 15%. But the dependency is on the user industry, but our initiatives are aligned to get about 12% to 15% there. So as some total of all these verticals, it comes to about 15%. That’s what Amit indicated.
Ritesh Shah
Sure. That’s helpful. Sir, my third question was on synergy. We have indicated that INR120 crores is already in the numbers and INR130 crores is already executed and we expect it to be reflected. So the question is, can we detail out the split of INR130 crores is already executed, what is the pipeline that we are looking at? Is it on the front-end side or on the back-end side? So what is it that has been achieved? What is it that is spending and timelines?
Amit Kumar Gupta
Yeah. So Ritesh, one — I will not discuss INR120 crores because that is already done and that is there. Part of it — major part of it is in operating margins, some part of it is in freight and the closure of certain units and saving of overheads on account administrative costs on account of that.
Now let’s talk of the remaining INR130 crore that is there. So the major portion of the remaining INR130 crores would come out like there was one of the biggest units which is under closure currently. We started it in the — towards the later end of March. We had to give certain notices, et etc month this month. So that should fully happen maybe by the end of June. So you will — we will have some part of that impact in June and the second-quarter, it will be full impact for that.
There are certain technical improvements or innovations that we are introducing in this, which I spoke last-time in the call also that is around INR40 crores INR45-odd crores of savings would come out of it. It was being used in Karlon earlier that is being used in Europe and America also. We have ordered two new machines for it, which would take around four to six months-to come. So part of it is executed, part of it would be executed once those machines come to India and are installed. So those benefits you will be able to see the second part of it in the 3rd-quarter, but the first part of it, it should be visible to you from the first-quarter itself.
Then there are certain initiatives in freight. Freight is again also in two-parts. We have already implemented major part of savings on freight. However, there are components in freight, since we have higher volumes, how we can increase the efficiency of utilizing in the truck, truck that we are doing currently, we are using bigger size of trucks. There is some INR5 crove crores of savings coming out of that. Additionally, we have a lot of inter-unit freight. So what we were doing now, it has increased overnight with coming in of Jabalpur because we now home from Javalpur to most of our units have been cheaper.
We are compressing that foam and sending it to our other units. We had a compressor which is currently compressing and so part of that saving is realized. But we have also ordered a new compressor, which would entail more savings on this particular front. In addition to this, there are similar two, three other savings. I would — I cannot give you all details of that.
But yes, why I said that these have already been put — executed is that they have already been put into that mode. We have done what we could have done in the 4th-quarter or in the first-quarter that we are doing. And gradually over the period of the year, most of it should come in the first two quarters, but some part of it you will be visible in the last two quarters.
Ritesh Shah
This is quite useful. I’ll just add two more and I’ll join back the queue. Sir, earlier we had indicated broad numbers around RN and Karan, it’s there surprisingly even EBOs in the marketplace. So is this something which is by design? And I think in the last call, you had indicated 7% of the volumes was current, please correct me if I’m wrong. I just wanted to know the run-rate and when should we see this number say a year out or two years out?
Rakesh Chahar
So the number would still be around 6%, 7% the year gone by. We see this number within the portfolio growing up because there the numbers are going to grow rapidly. So we see it growing to, say, 12% to 15% in this year.
Ritesh Shah
Sure. And last question for Rahul, sir, how do you see the competitive intensity in the marketplace? If you could provide some color on different categories and what’s our strategy on pricing and discounting in the marketplace? Thank you so much.
Rahul Gautam
Thanks, Vitesh. I think you’re putting the most difficult question to me, you know. So let’s look at the online and offline as two separate things. There is a lot of activity on the online stuff, and so are we participating in that because that whole segment is growing at a fast or faster pace than what the offline one is going. On the offline side, I don’t see that there is too much of activity. I see that we are doing our bit and if I can hazard a guess, we would have actually increased our market-share in the last year or so.
There is, of course, a bit of unorganized sector which is there and that unorganized sector, the numbers are little difficult, but just keeping you know making a good intelligent guess our sleepwell and activities have been by far the most and have also shown better results. Online, I’m saying the whole segment is growing and everyone is participating growing. There are some few newer brands which have come in. And now the only problem is on it on their profitability and sustainability and all that stuff. So we can — we can probably talk about it maybe another three, four months down the line as to where they stand here.
Ritesh Shah
Sure, thank you so much. I’ll jump back the queue. Thank you.
Operator
Thank you. The next question is from the line of Nikhil from SIMPL. Please go-ahead.
Nikhil Upadhyay
Yeah. Thank you. Thanks a lot. You have given a good quite a detailed explanation on the cost side. But continuing on that, if we look at from our presentation for India business, if I look at our expenses as a percentage of revenue, we are around 34% 35% and three pre-acquisition, it was in the range of 25% 28%. And you mentioned that we eventually want to reach that 13% to 15% EBITDA margin.
So my question is, is this an ambition to reach that 13% to 15% completely dependent on our ability to grow at, 12%, 15% or is there more on the cost side which can help us or bring down our total expenses down because you’ve mentioned INR130 crores is already realized, but still we are in that single-digit EBITDA margin and maybe INR120 crores, another may be realized. But I’m not clear how that ambition of 13% to 15% will be achieved in the year.
Rahul Gautam
So Nikhil, there is — there is no doubt that the sales have not kept up or the top-line has not kept up to the level that we wanted. A lot of this will be contributed by as soon as we start achieving the top-line that we want. And on the other expenses part of it, I think there is a constant battle that goes on. There is a process which is in-place for reducing the expenses and each one of the departments does their little bit and we see that happening on a month-to-month basis.
On the — the other part where it can get contributed is the synergy side and synergies, Amit has already explained that where the 100 — the balance 130 is to kind of come in. Once all these three things kick-in, which is existing departments or functions, reduction in expenses, which is, as I said, a constant process that goes on. We may have been a little distracted by the acquisition or the focus may have been more on integration part of it, but that’s now back and that process will be on.
The second is the INR130 crores that Amit has already explained as to where and the already execution has taken place and that has to come in. And add to that, the sales are going up and we would — or we should be meeting the top-line targets or the EBITDA targets that we are looking at.
Amit Kumar Gupta
One additional thing I’d like to mention, the percentage that you are referring to, please appreciate that this is the first full-year when Karlon is being consolidated. Karlon was a INR850 crore company and so its overhead percentage was higher than the other. So in-spite of inflation for one year, in-spite of additional overhead, we have been able to maintain it at the same percent, which means same absolute value since the top-line is constant.
So you would appreciate that a lot of efforts or a lot of savings would have gone into the company to offset those higher levels. So it’s not that savings are not there, savings are there in overheads also because a lot of plant closures have taken place, rate rationalizations have taken place and they are reflected in the number that you just cited.
Nikhil Upadhyay
Okay. So would it be right to say that bringing the trade rationalization, the route-to-market changes, probably we’ve grown lesser than the industry in last one year?
Rahul Gautam
So I think we would be about the same.
Amit Kumar Gupta
So in terms of volume, we have grown and that is what the entire industry has faced. So we have grown better than industry because there were two additional segments in which we grew. Internet, we grew by 80%. STI that was a new, whatever we gained was an incremental. So our growth definitely is much higher than what the industry would have done.
Nikhil Upadhyay
But sir, then I removed the e-com business and the other segments, the GT channel or the MBO channel, would have been — would have seen a degrowth in that case because — so based on the numbers of sales of Karlon, which we used to retail, which we used to report and if I do a rough back of calculation, it seems like a lot of growth has only come from those two segments while the MDO channel, which was our strength of the EDO channel has not performed at all. So would it be true for the industry also or I understand because bringing these integrations, we brought some changes and that’s why we have seen some loss of share or is it the industry has also not grown in those.
Rakesh Chahar
So if you look at the the we Call-IT general rate like EBOs and MBO. So there on numbers we have grown by about 13%. What has happened there is that the ASP has gone down and therefore in value it is very flattish. The on the other side, which is the e-com and the SP. So there we have grown substantially and that has been added together and it also adversely impact the ASP. So I think what really was kind of coming in the value gray growth is the ASP at our APOs and NBOs. So that is something which because of the market conditions, because of the getting this thing. So that is plus some products that we had introduced to compete with them in the market. I mean, it is a combination of many things.
But there was some course correction that was required, which has already been initiated just about a month and a half back. And we’ve already started seeing the results on the ASP going up at our EBOs. So that’s the purpose of EPO. We invest into EVO to basically premiumize and to increase the ASP, which has not happened in the last year. So that’s how the situation is.
Nikhil Upadhyay
Okay. Sure. Last question, and this is slightly a longer-term or your vision. See, we have a very strong right to win in the India business with significant market-share, good brands and there is a possibility or a runway for growth, say, for five, 10 years, even if we remove the near-term ups and downs.
In this whole scheme of things, when we look at Australia and Spain, they are segment where when we bought them, they were at INR300 crores INR400 crores. Today also they are at INR400 crores. Similarly, Spain, which was INR350 is still at INR350. So and probably whatever price we have paid-for the acquisition we had recovered probably now.
So in next five years, what’s their role in the whole scheme of this business? Like when we have a larger opportunity and we’ve done our acquisition and our energies towards making these acquisitions successful, what’s the role these two entities will play now?
Rahul Gautam
It’s a very good question, Nikhil. Let me just say that when these were acquired, which was — Australia was done in 2005 and Spain was done in 2019, each one of them added-value as far as our business was concerned. There was a lot of cross learning, there were technologies, there were mattress technologies, et-cetera, which were there to come.
Today, if we review that position today, I think the question that you are raising, I would agree with that, that we must raise that question as to what kind of value are these kind of — of course, each one of them has a different. I mean, Australia plays a different value and our role and Spain plays a different role. But that question must be asked.
And I would say that for Australia, we can — we are probably in the right time to raise that. As Spain being part of that largest European market that is there and there is a lot of turmoil going on in Europe. I would hold-on for another year or so to really look at even to raise this question that we have, but in short, you’re saying in five years what do you see them, their role will diminish will diminish with time or their contribution will diminish with time. And it will get restricted to whatever they are doing catering for the local markets, etc.
And you’re quite right that the real potential lies here in this country and with the position that we have with the two strong brands and with all the base work that has been done, we should see the next four to five years of good run.
Nikhil Upadhyay
One thing because
Operator
I’m sorry to interrupt. MR. Nikhil, can you please come back-in the queue for further questions? Yeah. Thank you. Thank you. The next question is from the line of Arun Singh from AAA PMS. Please go-ahead.
Varun Singh
Yeah, thank you very much. Am I audible?
Rahul Gautam
Yes, please.
Varun Singh
Yes, sir. Yes, yes, yes. So thank you for the opportunity to ask a question. First, Rahul, sir, no, I just wanted to enquire your mind that in the mattress segment where we are putting so much of hard work, it is heartening to say that there is a 20% volume growth when maybe so many other consumer sector is facing slowdown. So we have been able to deliver a such a good growth rate, maybe lower than what we would have expected, but still it is quite positive. However, given that there is only 6% value growth in this segment and so much of opportunity, excitement and energy, et-cetera that we are that is out there.
And even if I remember correctly, you know, during last conference call — result conference call, we were guiding for 17% 18% kind of revenue growth in the mattress segment and so assuming that let’s say, even if we are able to achieve 15% revenue growth and I break that number down 15% to two-parts, one may be with assuming it grows by 20%. So our core matrics segment, other 90% of the revenue pie, that must grow minimum 14 odd percentage in value in value terms to achieve the to 15% revenue growth.
So, I mean, please help us understand that how much comfortable you think this minimum 14% 15% growth excluding Taran is a possibility for FY ’26, it may be a possibility, but you know, for the first-quarter itself, like given that April has already gone by and 50% of May month is also done. So for us, sir, do you think that delivering 15% revenue growth in Mattress is a quite a fair aspect?
Rahul Gautam
I think it’s a fair asp rate it’s a fair aspect and maybe really breaking it down into details and into days and weeks and how we may not be able to do that but it’s a fair aspect it.
Varun Singh
All right, all right. And sir, second question is the other 50% of the business, which is B2B and also, I mean, let’s talk about the India B2B business, given that deflation explains a maximum part of value growth decline, you know, what would explain, you know this business will be growing by minimum 10% in FY ’26, starting from Q1, Q1 itself. I mean, how do you look at the B2B, which is again a larger part of our business in the deflationary situation given raw-material is likely to stay deflationary? That’s my second question.
Rahul Gautam
So on the B2B side, our growth rates are quite dependent on the industries that we cater to, whether it’s the auto industry or the shoe industry, industry, toys industry, et-cetera. But some newer applications we forge and we — newer industries get created. For example, we’re doing something for the aviation industry or the toys industry, which is certainly picking-up as far as India is concerned, so a lot of whom would go into it.
But by and large, in the near-future, you would see that the growth of the product or the growth will be completely dependent on the growth of the industry, that the user industry. And like you said that this is deflationary, the raw materials and in these B2B businesses, the selling prices are always based on the raw materials plus margin. So that’s why that the top-line may appear a little subdued or may appear subdued.
But the industries that we cater to, they are — they are quite robust. You know that whether it’s say it’s the auto industry or industry or maybe go through little ups and downs, but otherwise, they are here to stay and they are here for their products to be consumed.
Varun Singh
Understood, sir. And just one last question, if I may on our EBITDA margin guidance. Yeah, I remember correctly during last call, we like 10% was the expectation from the 4th-quarter. But unfortunately because of the subdued demand situation and deflationary environment, et-cetera, we could actually achieve this odd percent compared to 10%. So for FY ’26 and again starting from Q1 FY ’26 itself, you know, I mean, how much confidence do you think 10% EBITDA margin in the degree of conservativeness you would — you would think such.
Rahul Gautam
So it’s — I mean that will be tough to give exactly what is the confidence level or what — but we stay absolutely positive in that direction. That’s all I can say. Confidence or any kind of guesswork or not guesswork, but any kind of numbers, it may be a little awkward at this time, but otherwise, we remain positive for that.
Varun Singh
Okay, sir. That’s all from my side. Wish you all the best. Thank you very much.
Operator
Thank you. The next question is from the line of Janil from J&J Holdings. Please go-ahead.
Jaineel Jhaveri
Yeah, hi. Thank you for taking my question. So my first question was regarding the CEO. He was a professional CEO that had been brought into the company. He stayed for almost two years, I think, or 1.5 years or two years. So I just wanted to know and now I think the management has moved back to the — to a family person. So I just wanted to know that has there been a shift in thought process or are we going to look for a professional CEO again? Anything regarding that.
Rahul Gautam
So we’ve not — we’re not in the right time or right position to answer that question. But all I can say is that when the CEO was hired, we had many things which began to happen one after the other and the CEO was also hired with a certain commitment to him as the acquisition happened, the integration happened and all the changes in the market that began to happen. So that was the reason that we kind of disengaged with each other.
So as far as reverting back to an older gentleman or to somebody who’ve been there in the company or it’s no change of any business policies or it’s no change of doing business, but it’s just to stabilize it. And we have been — and through this entire call, we have been talking about what kind of instability of an acquisition like this brings about. So at this point of time, we are just saying that we want to stabilize it, get it to moving in the direction and at a rate at which we want.
As far as the CEO part is concerned, that was always with future in mind. And I hope that you will appreciate that if we — if and when we start even thinking about it, it does take — it does take a couple of months-to find, settle somebody and then there is a settling in time and we don’t want any kind of a disruption at the moment to happen. We want things to stabilize and then we’ll move on. In any case, as I said, CEO was more with a future in mind.
Jaineel Jhaveri
Right. No, I just wanted to understand your thought process and this is helpful.
Rahul Gautam
No, no, sure. I fully appreciate that these are issues which would you keep going on in the mind. So it’s good that you’ve it.
Jaineel Jhaveri
And one other thing and this may be just something that you — I mean just some thought that I had was in terms of even the kind of questions that other participants have asked and you know that I’ve been following the company for some time now. You know, is there any thought process on like restructuring the company or like maybe demerging the mattress business?
Why I asked this is because a lot of the value in the share price is going or gone because of things that you know are maybe not even core to the company, maybe something like the part of the business or even Europe and Australia. So is there any thought process? And then you have this one beautiful part of the business, which all have grown even including the acquisition. So is there any thought process on maybe demerging that out?
Rahul Gautam
Sure, it’s a brilliant question. And let me just say that there are many people who would think and probably in other countries, it does happen that the mattress business and the other foam business are fundamentally different businesses. But the way that things have grown in India, from the form business that the mattress business evolved and grew.
It’s also coincidental that the shops or the areas where it was peddled or it was sold to the customers or with the consumers were also same and similar. Therefore, would someday the two businesses be different? Probably, yes, but that someday is quite far away. It’s not good, but I understand and appreciate that there is a fundamental difference in the nature that the way the two products sell and except that they are in the same place and the raw-material parts of that are.
The other things that you said about Europe, I have already answered the question on Europe and Australia. They had a role to fulfill. There is some which has happened and some we’ll have to see how it will kind of evolves. But as time goes by, the company is very clear on two things. Number-one, the priority is the India business. Number two, the priority within the India business is the mattress business.
Therefore, if you will look a few years down the line or even a few quarters down the line, you would find that percentages or percentage of mattresses or branded mattresses in the India business will keep on increasing. The percentage of India business in the entire business of Shila will keep on increasing. So that direction will happen. Now someday will those two businesses split or not? Now someday it will, but I don’t know when. When it may be quite some time down the line. At the moment, there are synergies in doing them together from the point-of-sale, from transportation perspective, from the ingredients, from the infills, all these kind of thing, there is a lot of synergy there but fundamentally a little different.
Operator
Okay, thank you. That was — that was super helpful. Thank you so much and good luck. Thank you. The next question is from the line of Rajna from SIMPL. Please go-ahead. No, ma’am, your voice is coming very low.
Rachana
Hello.
Operator
Yes, please go-ahead.
Rachana
Okay. Sir, during some recent channel checks, we saw that products were not present in, EBOs and MBOs and vice-versa. Now this phase is a concern, especially since now we are talking about opening new showrooms. Given that existing showrooms are still underperforming to generate revenue, it’s a bit difficult to believe that the showroom expansion can drive meaningful growth in future. In this con — in this context, I just wanted to understand what concrete steps are we taking to improve and performance within the existing retail before investing in new showroom open.
Rahul Gautam
Tushar are you there?
Tushaar Gautam
Yes I’m here.
Rahul Gautam
So can you ask that question please?
Tushaar Gautam
Yes absolutely. So we can think of it in two or three sort of two or three areas. One is sleepers started with a large set of EBOs and there the primary role is from a growth perspective is to get same-store growth, right? So there are a set of initiatives that we need to take there. The expansion that Rakesh you talked about is primarily going to be led by EBOs where had a very weak EBO network, whether in South, West, East, more especially in the North. So that’s the second pillar of growth.
Same-store growth stays an important parameter for all of us to drive various initiatives there and we’ve had decent success in the last year, year and a half on all same-store growth. As far as the EVO network is concerned, expansion will always get you additional growth, like I said, from, which is geographical expansion, but also both from and in new areas and new markets, new housing developments as cities are expanding and there are micro markets getting developed. So that kind of expansion will always get you growth.
A same-store will — in our experience, when you convert an MBO or a new-store or you’ve built a new-store, you get about two to three years of very good growth and then it becomes a bit a bit incremental in the sense that footfalls start to get saturated and all of this, all of those things start to happen.
The big lever there which exploring and I’m not committing anything on that at the moment is with the acquisition, is there a role for to play in our existing EVOs to drive footfalls? So those are the three or four broad areas where how we see the EVO network growing across both brands and of course, leveraging furniture as a category with the brand to see if we can scale that up. Does that answer your question?
Rachana
Yes. Okay. One more question I needed to add. Can you talk about the economics of and Aram brand separately, since we always mentioned that these brands are a volume-driven business and also what capacity utilization would it add to breakeven and eventually how does it add-up to our ambition of reaching 14% to 15% of EBITDA level.
Tushaar Gautam
So they are not — they around at a percentage margin level are exactly the same as the current business. There is no difference at all. Okay of course, the absolute — absolute margins are lower because the price points are lower. But as a percentage, they are not lower at all. Capacity, like we’ve always explained, in our business capacity has extremely limited role to play. The capacity utilization has got very, very, very small, very small implications on overall margins.
Having said that, the primary capacity that was put in for Tarangaram and some other products was in Jabalpur, which was a very, very new technology, the technology. That’s something that has scaled-up to about 60% of current capacity already and very quickly we will get to 70%
Rachana
Hello. Yes. I had one more question if I can add-in. Yeah. Now we have this is on the e-commerce business. We have the advantage of diversified warehouses, manufacturing facilities, well-known brands and a large sort of basket. But still on e-commerce, we found that new-age players could make a dent. So what would have been done differently and what is our approach now since both Colon and have a good brand equity at consumer level. So logically, do we see our e-com business growing stronger over the years?
Tushaar Gautam
That’s. E-com will grow stronger for sure. I think in hindsight, what could have been done differently is to not allow the other people to grow so much before we started to take the right actions. We did that about a year, year and a half ago. Last 12 months, Amit, correct me if I’m wrong, we’ve had close to 100% growth.
So targets, targets and ambition currently is to continue maybe not 100%, but 60%, 70%, 80% of growth level target for both brands put together on the e-comm platform as well as brand.com. the only other thing I would say there is, I mean, for the last three, four months, Sheila form mattress brands at least on one of the platforms have been number-one and we expect to continue that journey and also expand that on the other platform. Well, on platforms, we will very quickly get to either number-one or number two brand.com there is still some work to be done and that’s the work we are putting in now for the next 12, 18 months.
Rachana
Thank you. Thank you, sir.
Operator
Ladies and gentlemen, due to time constraints, this was the last question for today’s conference call. I now hand the conference over to Mr Ritesh Shah for closing comments.
Ritesh Shah
Hi, sir, I thought I will take the last question. Sir, can I take one last question if it’s okay, sir, otherwise close the call.
Rahul Gautam
Go-ahead. Yeah, yeah, yeah, yeah. Yeah. First, yeah, just two questions. One is for Sushar, how should we look at the future of incremental equity will we look to buy into it basically and the funding part of it? That’s one. And second question, three parts for Amit ji. CapEx number for the next fiscal and if you’d like to qualify A&P as a percentage of sales at discounts and rebates as a percentage of sales that we had for this year and if there is any broad guideline on those numbers for next year, that would be great. Thank you so much.
Tushaar Gautam
With this, I would only say as far as Solenco is concerned, I can comment a little more on the opportunity. As far as the investment and financials and all of that, is the right person to speak about that. So I’ll leave that to him. But like I said in the previous question, I think we’ve done a few pilots, good results, which is can we leverage the current Sheila EBO network to expand their footprint into Folenco offline and therefore get far more footfalls, both for the mattress business as well as for as a brand. I think those green shoots are there for sure. We need to put all of that together in the next two or three months and see how we can scale that up. From a business perspective, investment into Folenco further investment and the dynamics, I will leave to Amit you to comment.
Amit Kumar Gupta
Yeah. Sure. Is that okay, Ritesh? Sure. Thank you so much, Asha. Thanks. Thanks. Yeah. So Ritesh, on the capex front, this year we are targeting including everything we should not exceed INR75 crores of capex in India and overseas should be very notional because their capex is really over. What was the second question that you asked about percentages? I could not gather that fully.
Ritesh Shah
A&P as a percentage of sales and discounts and rebates as a percentage of sales.
Amit Kumar Gupta
So I would say overall this should be say maybe a percentage over of what we have spent last year. But that will mostly come out from the incremental sales that we would be doing.
Ritesh Shah
Sure. Thank you so much, Amit. Rahul, I would request you for closing remarks. Thank you so much.
Rahul Gautam
Thank you, Rite. Thank you very much for conducting a great conference. I mean it gives a good feeling for all of us here. And thank you all who are participating in this earnings con-call. I hope that me, Tushar, Rakesh, Amit, we have been able to answer your questions satisfactorily. If you have any further questions or would like to know more about the company, please reach-out to our investment relationship managers, that is Valorem Advisors or to any one of us. And like always, I would say that it has been a great learning exercise for us. So thank you very much and good night. Enjoy it.
Operator
Thank you. On behalf of Investec Capital Services India Private Limited. That concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.
Amit Kumar Gupta
Thank you.
Rahul Gautam
Thank you.