Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Sheela Foam Limited (NSE: SFL) Q4 2026 Earnings Call dated May. 15, 2026
Corporate Participants:
Unidentified Speaker
Rahul Gautam — Chairman and Managing Director
Amit Kumar Gupta — Chief Financial Officer
Analysts:
Ritesh Shah — Analyst
Unidentified Participant
Presentation:
Operator
Ladies and gentlemen, good day and welcome to Shield of Home Q4FY26 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 your questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star and zero on your touch on phone. I now hand the conference over to Mr. Ritesh Shah Co Head of Research Analyst Mid Caps Materials and ESG from Investor Capital Services India Private Limited.
Thank you. And over to you sir.
Ritesh Shah — Analyst
Thank you Shailendra. Thank you all for joining on to Shilaform Q4FY26 and FY26 earnings conference call. We have with us Rahulji Chairman and Managing Director. We have with us Rakeshi Deputy MD and Amitji Group cfo. I would request Rahulji to start the call with initial remarks post which we’ll have a Q and A session. Over to you sir. Thank you so much.
Unidentified Speaker
Please go ahead. Sir, line is open. Yeah, hi. Yeah, you can open the lines for the management. Rahulji will have to start with the comments please. Yeah, the line is open. Thank you. Sir, we are unable to hear. Ladies and gentlemen, please be online. But since the management line is back. Over to you sir.
Ritesh Shah — Analyst
Hello. Ravanji. Yeah, hi. Hi. Sir, I think you got disconnected. I would request you to start the call with initial comments post which we’ll have a Q and A session. Sir. Over to you sir. Thank you.
Rahul Gautam — Chairman and Managing Director
Good afternoon ladies and gentlemen. At the outset let me thank you all for attending this conference call to discuss our operational and financial results for quarter four and the financial year ended March 2026. I do hope you’ve gone through the results and the earnings which have been uploaded on the website. FY26 has been a year of implementation of the benefits of the Kerlon acquisition and its integration with Sheilafoam. Both Sleepwell and Curlon brands delivered strong growth and our FOAM segments also recorded commendable momentum.
The broad based performance has translated into a healthy growth across both revenue and profitability. I am pleased to share that the company achieved Several milestones in FY26 including highest ever annual form production, highest ever top line and the highest ever ebitda. This reflects the strength of our integrated platform focused on execution and a continued commitment to a profitable growth. We are also cautious and remain watchful of the evolving situation in the Middle east and its potential implications for raw material availability and the supply chains.
The company till now was able to navigate this environment without any material disruption and I hope that we continue to do that. Our long standing supplier relationships both in domestic and international markets ensure the continued availability of key raw materials such as such as polyol and tdi. This ensured that the customer servicing without disruption and also increased the top line in quarter four. This reflects the resilience of our sourcing network and the strength of our supply chains relationship for Q4 of last year, our Indian operations which are now our standalone business demonstrated a revenue growth of 24% for a full year.
FY26 the growth was 11%. The volume growth for full year was around 15%. This should also further show positive movement as selling prices are bound to be higher in FY27 as compared to FY26 and we are all aware that the higher long steel prices will be contributing to that. The core ebitda margins for Q4 climbed to 11.5% for full year of last fiscal the core EBITDA margin stood at 10.7%. This indicates that we are already in a 11 to 12% bracket and should move further onwards with growth. The Kerlon acquisition has moved beyond integration and is now visibly contributing to the group’s operating performance.
Our segments have also shown healthy growth during the year. Mattress volumes grew by 13% year on year in quarter four FY26 and by 12% for the full year. Value growth in the mattress segment was 13% in Q4 and 10% for FY26. Growth during the year was well distributed across both Sleepwell and Kernon, supported by deeper distribution, sustained brand investments, sharper channel execution and the benefits of a more integrated platform. Operating Platform on the retail side, we added approximately 600 net new showrooms during FY26.
This further strengthens our market reach. Sirloin showroom expansion, particularly in northern India continued to gain encouraging traction. Alongside this we also continue to develop adjacent home comfort categories including pillows, as part of our broader effort to deepen consumer engagement across the comfort portfolio. Our E commerce business also continued to scale strongly during FY26. Sales on our own websites which we call as brand.com grew by 136% year on year and sales on platforms grew by 39% year on year.
This performance has been driven by by a focused digital strategy, targeted consumer marketing, a sharper online portfolio and better alignment between product pricing and fulfillment capabilities. The MyMatters proposition and our online led consumer initiatives have helped strengthen our direct engagement with consumers. Our unorganized to organized business which we earlier used to refer as STI or Small Town India. A Small Town India initiative business now operates through 8,400 dealers and reaches over 5,000 towns across 24 states.
In FY26, this U2O business delivered volume growth of 65% and value growth of 111% on a year on year basis. This growth has been supported by continued product innovation and by strengthening deeper distribution reach in the markets. In phone business for Q4, FY26 volumes grew by 34% while value grew growth was 36% aided by better price realizations. For the full year of last fiscal, volume growth was at 18% while value growth stood at 14%. This growth was supported by a broader customer pipeline, disciplined market development and a continued focus on higher value applications.
Overall, our India business delivered a strong FY26 performance driven by the strength of our brands, expanded distribution reach, sharper channel execution and sustained operating discipline. The year also demonstrates that growth and profitability can move together when the business is integrated well and execution remains consistent. I’m also pleased to share that the Board has recommended a dividend of 20% for FY26 subject to approval of shareholders. This is a significant milestone for the company as the profitability of the business has enhanced.
After successful integration of Curnon and with significant reduction of debt levels, the group has strengthened its cash generation profile enabling it to share profits with shareholders. This marks the first dividend recommended by the company since listing, for that matter, forever. This is the first time the dividend is being recommended. Both Australia and Spain have delivered stellar operating performance during the year. In Australia, Joyce revenue stood at 422 crores in FY26 and EBITDA margins improved to 10% which is a significant improvement of almost 400bps over FY25.
The improvement in profitability profile was due to implementation of strategic yield improvement programs, renegotiating prices with key customers and supply chain restructuring institutes institutionalized in last year. In Spain, revenue stood at 391 crores in FY26 and EBITDA margin of 10.4% for the full year as compared to 8.4% in FY20. So as we clearly see in both Australia and Spain, the EBITDA margins have increased on Ferlenco. I’m happy to share that business is expanding and is well poised on its growth journey.
For FY26, Fylenko reported a revenue of 370 crores, a growth of over 60%. Year on year the company clocked a path of close to 60 crores compared to 3 crores in FY25, thereby marking significant improvement in its performance. Fidenco has been able to achieve this growth while maintaining a stringent cost discipline and fiscal prudence. As I had spoken in our last call about integrating Forlenko and Sheilafoam’s Omni Channel network and establish Forlenko’s presence across Sleepwell and Curlon stores.
I am happy to share that we have encouraging response from customers visiting our 40 plus integrated stores wherein they are able to get offerings from Both Svorlenko and Srira 4. We are constantly increasing such integrated stores and hope to cross 100 stores during current year next Our IT business Stacko has also continued to evolve as a differentiated digital capability within the group with its solutions now supporting enterprise workflows, analytics and technology led decision making across sectors.
During FY26, Stacco delivered a revenue of 70 crores. We see Stacco not merely as a technology subsidiary but as a strategic digital asset that strengthens the Group’s broader capabilities in automation, data intelligence, enterprise efficiency and artificial intelligence. Coming to esg, our focus remains on embedding sustainability into the way we operate rather than treating it as a separate initiative. During FY26 we made steady progress across our identified priorities priorities with continued emphasis on energy efficiency, responsible resource management, waste reduction, workplace inclusion and of course fire safety.
We have already operationalized a 500 kilowatt solar power plant at our Javalpur facility and are progressing with over 1000 kilowatts of additional solar capacity across other manufacturing locations. We’re also able to augment gender diversity in our workforce to around 8% during the year. These actions reflect our commitment to building a more responsible, inclusive and efficient operating platform. Our responsibility extends beyond business performance to the communities we serve and the lives we are able to touch.
Our CSR agenda continues to be anchored around two key areas where we believe we can create meaningful and a lasting impact emotional wellness and skill development. Through our emotional Wellness initiatives, we are able to touch hundreds and thousands of lives across the country, thereby helping build wider awareness and a sustained national conversation around preventive emotional well being in skill development. Our programs across armed forces preparation, fashion designing, paramedical training and software development are focused on equipping young men and women with livelihood linked capabilities.
These initiatives reflect our belief that true value creation is measured by the positive and enduring impact that can be created on the society around us. With this, I will now request our group CFO Mr. Amit Kumar Gupta to take you through our financial highlights over to you Amit.
Amit Kumar Gupta — Chief Financial Officer
Thank you sir. Thank you for your inputs on our business and strategy going forward. Just to update on the financials some numbers here, our volumes and profitability for Q4 and financial year 26 continued strong trajectory supported by healthy growth and sustainable margins on consolidated basis, Revenue grew by 24% year on year in Q4 to 1050 crores. For financial year 26 the consolidated revenue grew by 11% YoY to 3821 crores. On a standalone basis, revenue again grew by 24% YoY in Q4 to 819 crores whereas in the financial year it grew by 11% YUI to 2,962 crores.
Our consolidated core EBITDA stood at 121 crores for the fourth quarter growing by 90% on a year. On year basis, core EBITDA margins improved by around 400 basis points to 11.5% from 7.5% last year. Financial year 26 consolidated core EBITDA stood at 414 crore the bench for the first time we as a company have crossed 400 crores by growing by around 40% YoY with a margin expansion of 261 basis points to 10.8% for the year. This improvement was driven by incremental sales, better gross margins and disciplined control over operating or fixed cost.
I am pleased to share that the Consolidated PAT for Q4 stood at 92 crore representing a 7 times increase on a year on year basis. For financial year 26 the consolidated PAT stood at 161 crores growing by around 78% by year. If you look at the yearly figure of 171 crores out of this 144 crores came in the last two quarters. Only in the first two quarters we had certain impacts for Smart to market on the investments that we have put in government securities. So during the last two quarters we have done 144 crores which means a run rate of more than 70 crores per quarter and with the expected growth we expect to continue the momentum going forward forward.
During financial year 26 the company also reduced net debt by 156 crores reflecting the underlying cash generation of the business and continued focus on balance sheet discipline. At the time of Carlon’s acquisition, the consideration was paid in high was higher than the tangible value of the asset. This is generally the case when you acquire a strong brand which provides returns over a longer period of time. However, to look at the returns from a shorter period of time when we Exclude the intangible portion of the investment and calculate return on capital employed.
We see that it currently stands at around 18% which even before Curlon acquisition was around 17%. This demonstrates that our return matrices have also improved in comparison to what it was before Carlon acquisition. And we are only in the midst of our journey. With this, I request the moderator to open the floor for questions and answers. Thank you.
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 the test on telephone. If you wish to remove yourself from the question queue, you may press star and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from Rahul Agrawal from Itigai Asset. Please go ahead.
Ritesh Shah
Hi sir. Good evening and thank you for the opportunity. Congratulations for a decent performance. Raoji. Just firstly to start with, going forward, fiscal 26 was a year of hard work to get this growth and profitability back. I think keeping the momentum going from here on. What are the top two, three things you’re spending time on or your team is spending time on? In terms of both staying ahead of competition and at the same time improving the return on capital for the business. You could share your top down thoughts for the entire business overall how you’re looking at next two, three years, that will be really helpful.
That’s the first question.
Rahul Gautam
So Amit, do you want to answer that?
Amit Kumar Gupta
Yeah. So Rahulji, as we have outlined in our earlier conversations, also during this call we had taken a target that we we would be first we trying to reach growth rate of around 15% plus now since raw materials have increased last year, this should be better than 15%. And so first and foremost country thing is how we can strengthen our different product lines and our different business lines to deliver the growth that we have committed to the market and consequently improve the profit line also going forward we will be looking into very complementary business lines which are related to us.
And some of them we have already initiated. For example the pillow segment. That’s a market of around 100 crores. But we now were giving out only pillows as cream along with the matrices. Now we will be treating it as a separate category and building it upon. Thirdly, the two segments which are the E commerce segments and U2O segment continue to be, will continue to be our strong focus areas because these are the areas which we need to penetrate deeply. Not only to maintain our leadership status but also to grow further in this country which has around 8,85% of its market currently occupied by unorganized additional metric segment.
So I think not on a one or two year but on a three to five year horizon rate. Our objective would be to get into related product category so that we are a full product player and increase our penetration across the country. Maybe Rakesh has something to say. That’s fine. No, that’s fine. Fine. That would be sufficient. Rahul, in case you have anything addition to ask, please let us know.
Ritesh Shah
Sure. Thank you so much. It gives some clarity. Second was I just wanted to touch upon the input cost information bit of it. If we just talk about where are TDI and Polywell pricing right now and how do you plan to pass it through both for mattresses and chrome segments. We just talk about what kind of pricing we’re looking forward to across segments and is that sufficient enough to let the margin actually sustain or maybe expand going forward? That’s my last question.
Rahul Gautam
That’s like a extremely difficult question and probably multiple questions put all together. Rahul, the pricing of TDI and Polyol is. Is like a crystal ball grazing at the moment or gazing at the moment. And it’s not moving only in one direction but it’s also moving in both directions and moving in large quantities. What used to be some 2, 3, 4, 5 rupees, 10 rupees a kilo in a year that you would see something moving up or down or up and down. Now you suddenly have 40 and 50 rupees at a time happening multiple times in a month.
Therefore to handle that we are learning how to do it. But thankfully some of our segments help us like the B2C segment. There are some others which are stable but. But also move slowly. Don’t move along with the raw material market which is a B2B segment. And then there is also the industrial segment which moves even quicker than the raw material. So it’s a mixed bag. It’s something that we can’t say that we have full handle on but should be able to sail through and believe that as soon as the war kind of finishes off this oscillations or volatility will reduce.
Now you are asking what the future of these prices of the raw materials would be. They are definitely at a high level at the moment. I can only give you a last five years average where Polyol should be and where TDI should be. The Polyol should be around 120 bucks and TDI should be around 240 or something like that. But at the moment they are both above that. We’re very difficult to predict. I cannot, I cannot add anything more. Yeah Takish, you want to add?
Unidentified Participant
Yeah, I can. I can just say that we have been also able to pass on the cost increase due to raw materials across all the channels. B2C side, the industrial foam side and partly also on the B2B side. So we see opportunity also for a margin expansion which we’ve experienced in March and also going forward that opportunity exists. So as a raw material like Raozi rightly put it. So the raw materials definitely are looking down towards now. But it’s a very volatile situation. I mean it’s a function of both availability and the pricing.
So while it is going down because of the demand but the moment somebody picks up good quality it starts looking northwards. So it is. It’s a play of supply chain. Currently
Ritesh Shah
Could you quantify the price hike?
Unidentified Participant
So currently TDI is the main supplier is GNSB. Their price is about 275 and polyol is around 180.
Ritesh Shah
Rakesh, I was actually asking about the price I taken for car mattresses and phone. What is the pass through you’ve taken so far? That’s what I was wanting.
Amit Kumar Gupta
So Ritesh, very difficult to give in percentage terms they are different for different categories. As Rakeshi just mentioned that in matrices we have been able to take decent ones. B2B a little lesser that industrial segment. Yes, we can pass on immediately. But yes, polyol and TDI on an average increased between 25% to 35%. And depending on how much home is consumed in different categories we have been able to increase prices to offset those price increases and to some extent maintain our margins also.
Ritesh Shah
Thank you so much. I’ll get back and with you all the best for the next year.
Amit Kumar Gupta
Thank you.
Operator
Thank you ladies and gentlemen. Reminder to all, please limit your questions to two for participants so that management can adjust more. Participants, should you have a follow up question we will request you to rejoin the queue. The next question is from Arjun Khanna from Kotak Mutual fund. Please go ahead.
Unidentified Participant
Thank you for taking the question and congratulations. Better set of numbers this time around. So the first query is just on the marketing expenses because we’ve been bringing that out historically. I didn’t quite catch it in this presentation. So how much would we have spent in the fourth quarter and how much would we as a percent of sales would be for FY26?
Amit Kumar Gupta
Rahul. Sorry Arjun. For the entire year it should be around 4 1/2 percent. Almost similar to what we did Last year for the last quarter on quarter is a fraction that moved on. I think it would be a little because 4Q3 is the highest percentage we spend upon. So maybe around 4 odd percent.
Unidentified Participant
Helpful sir. The second question is on the depreciation side Just wanted to understand post these changes what outlook do we anticipate for FY26? What should be the number we should work with?
Amit Kumar Gupta
27 or 26?
Unidentified Participant
27. Sorry, 27.
Amit Kumar Gupta
So Rahul, I think at a consolidated level we would be looking for a depreciation based on current assets. And I’m not commenting what incremental depreciation we might have for capital investment that we do next year should be around 140 to 145 crores at a consolidated level.
Unidentified Participant
Sure. So this quarterly run rate of 35 essentially one can annualize this number.
Amit Kumar Gupta
Yes, yes you can.
Unidentified Participant
Sure. And the final bit on Capex for next year. What’s our outlook
Amit Kumar Gupta
Including maintenance and some debottle necking capacities. Because we have grown by around 15% in volume this year and we anticipate even a higher growth in the next year. So we will need certain debottlenecking capex at certain of our facilities to meet this volume. We should be somewhere between 125 to 150 crores.
Unidentified Participant
This is including maintenance capex,
Amit Kumar Gupta
Everything. This is including marketing Capex which is for opening of new stores. This is maintenance capex for all our plants both in India, Australia and Spain. And this is also any new capex we need for rebottlement. Everything included.
Unidentified Participant
Perfect. Thank you so much for answering these questions.
Amit Kumar Gupta
Thank you.
Operator
Thank you. The next question is from Deepali Kumari from Marian Capital Market. Please go ahead.
Unidentified Participant
Thank you so much sir for giving this opportunity. So my first question is the unorganized to organized segment showed a massive growth. So how stable is this month?
Amit Kumar Gupta
Sorry Deepali, you were not very clear. Can you please. We could understand that U2 has shown a high growth but after that what you said. Please can you repeat.
Unidentified Participant
So my question is the unorganized to organization growth. How scalable is this market across many states where you do not have the major.
Operator
Sorry, you are not audible. Please join back. Thank you. The next question is from Amit Mehendale from Robo Capital. Please go ahead sir.
Ritesh Shah
Thank you. My first question on the margins. Is it fair to say that you know in the backdrop of escalation in raw material prices are margins EBITDA margins will be under pressure in Q1 or Q2.
Amit Kumar Gupta
Sorry, I could not get your question. Can you Please repeat.
Ritesh Shah
Yeah. In backdrop of raw material prices. You know our EBITDA margin should be under pressure in Q1 or Q2, right? Because Q4 must be. We must be having stocks at old prices. The inventory may be there, the raw material inventory, but Q1 and Q2 we may have to use the inventory which is bought at higher prices. And I’m assuming that there will be some pressure on the midterm margins in Q1 and Q2.
Amit Kumar Gupta
No. So if you see our gross margins, see what happens is whenever there is a raw material price increase, it is not that we instantly can increase the price of our products to the consumers. Also it’s a process which takes around 10 to 15 days and same is the quantum of inventory that we have. So the higher price inventory almost match up with the increase in the prices. And that’s why you see there is not a very material increase in gross margin in the quarter as compared to the fourth quarter last year it would be almost 50100 basis point improvement.
So technically there was no impact of lower raw material prices when these prices went up. Similarly in the first and the second quarter we don’t expect any impact of higher raw material prices. I don’t say there might not be 50100 basis points. There can be. Prices are very volatile currently, but not more than that. What leads to EBITDA margin and which has been done in the fourth quarter is an increase in volume. We are at 30% plus contribution margin business and whenever there is an increase in volume that directly flows to the bottom line strengthening the EBITDA margin.
And that’s the reason why we will be focusing on growth which we have done last year and we will be doing in the current year year.
Ritesh Shah
I was just trying to figure out, I mean if the poly prices have gone up from say 120 to 180, I’m sure we’ll not be able to pass on such a large increase. I mean even you know like a 20, 25% increase is difficult to pass on. So how are we confident? You know, I’m just.
Unidentified Participant
I’ll take that. I think what rousey mentioned as 120 was the ideal price of polyol and 120 was a price in January. So the price started rising from February and then there was a sharp spike towards end of February when the war started. So the polyol price had gone up to 220. So what Amitji is saying is when it was rising so we were able to pace price increasing. And now the highest price that is it has gone up to its 220 and currently it is at 180. It is oscillating between 200 and 180. So the part price increase has already been taken.
So therefore it will not impact the margins going forward.
Ritesh Shah
Okay, great. And last question. Yeah,
Unidentified Participant
No, go ahead Amit.
Ritesh Shah
Understood. Thanks. My last question is on Perlanco. What is the plan, you know for say next three, four years, how do we see that business going and any long term plans there? Three, four year plans.
Rahul Gautam
So Fernco already is at about 370 crores. Next year’s plan is about 500 crores and it’s tracking well. I think two things that we look forward to. One is that when would be a right time for doing an ipo and we will take our decision somewhere in the next three to four months time.
Ritesh Shah
Right. And the last question is on the debt levels. If you could, you know what could be our debt levels for next two years? 27 and 28.
Amit Kumar Gupta
So to answer that question I’ll divide the debt between two parts. One, the debt which is outstanding on the Indian books and the second the debt which is outstanding in Spain and Australia. Spain and Australia is around 350 odd crores. So that is 350 crores which is self liquidating is being paid off from the cash flows of Australia and Spain itself. The other 300 crores is in India which I think if you see or utilize the entire cash flows what we are anticipating should be paid in the next one, one and a half years.
Ritesh Shah
Okay, great. Thank you very much.
Amit Kumar Gupta
Okay, thank you.
Operator
Thank you sir. Participants, we request you all to please limit your questions to per participant. We have next question from Mr. Pritesh from Lucky. Please go ahead.
Ritesh Shah
So I couldn’t get the the answer on fernlenko. So first 60 crores profit the company and we have about around about 60 plus percent pulling. So what is the course of you know, business plan there and what kind of ROE or roe that business operates at?
Amit Kumar Gupta
So first of all we don’t hold 60%. I’ll just correct that number. We hold around on a fully diluted basis. We hold around 43% in silent. We are the largest shareholder and we hold majority on the board and the shareholder meeting. These two. Yes, we have done 60 crores PAT in the current year. ROE for the company will be different. But I can say that we have done a total investment of around 430crores for our investment. So even if you take thousand crores basis that which is divided into debt and Equity, I think it’s a metric that can vary.
What is important here is return on capital employed. The assets that SRI Lanko has deployed and the type of EBIT that it is getting. The return on capital employed is around 30 to 35% for Landco. Our returns of course will come mainly to the valuation of the company since we are a shareholder. And that will depend upon what price the company gets listed.
Ritesh Shah
So this company is going for ipo?
Amit Kumar Gupta
Not currently, but there are plans to go for IPO once it reaches a threshold type which as Rahulji just mentioned, maybe then one year from now or maybe a little bit later than that.
Ritesh Shah
Okay. And on the. On the debt and the interest cost part. So you said that the debt of India will be repaid in one and a half year.
Amit Kumar Gupta
Yeah. So the cash flow generated. Generated. Will have capacity to repay the India debt in one and a half years. Since it is around 300 crore, whether we will pay or we will utilize that cash for further growth in the business. That’s something different because these are immaterial debts. If you see debt to EBITDA, it is less than 1.
Ritesh Shah
And can you give up the interest cost for the next two years? You know that would be helpful. The way you gave out depreciation costs, maybe you could give out the interest cost.
Amit Kumar Gupta
So at a consolidated level, as I said, if you add up, you will have a debt of around 600 to 700 crores. The interest cost for the debt would be 35 crores and another 15 odd crores for bank charges and other things. So at a consolidated level, finance costs should so a figure of around 50 out crores until and unless we do major changes in the capital structure.
Ritesh Shah
Okay. Okay, done. So thank you.
Operator
Thank you. Thank
Amit Kumar Gupta
You.
Operator
The next question is from Ritesha from Invested Capital Services. Please go ahead.
Ritesh Shah
Thanks for the opportunity. Sir. First question is on U20, if you look at the full year, volume growth is around 65% and value growth is triple one. So sizable difference between value and volume over here. Sir, if you could provide some color on why this gap. What is it that we have changed over the last one year? That’s the first question.
Unidentified Participant
So the volume growth is 61%.
Amit Kumar Gupta
65% and value growth is 111%.
Unidentified Participant
Correct. So Ritesh, what has happened is that we have introduced a higher model. Earlier when we had launched this product, we had launched with only one model. So now we have introduced another model at a higher price point. That is one. And second is there also has been a price increase in both the models. So it is a result of that.
Ritesh Shah
And sir, what would be the volume contribution by percentage for youth for U20 on the total volumes that the company does?
Amit Kumar Gupta
So Ritesh, I’ll have to get back with those. These numbers you generally don’t disclose the distribution of matrix between different categories. But I’ll have to get back with those figures. I’ll talk to you separately on that.
Ritesh Shah
Sure. Answer Just over here, would it be margins accretive or higher than what we report at standalone basis? Over Here specifically for U20
Amit Kumar Gupta
It would be more or less. Margins would be more or less a not lower than the offline metric and much higher than the E Com so it would lie somewhere in between.
Ritesh Shah
Fair enough. Would you like to comment something on E Com? Basically again it has done quite well, 52% value growth. If you could highlight what is our thought process over here because historically we did very well than we scaled it back Again we are back on the panel over here. So how should we look at this part of the business?
Unidentified Participant
So Ritesh, we are on two sides. We have put additional focus on the brand.com side and that is that is one as a platform and second is we have also put focus on kernel. So both these put together has led to substantial growth on the brand.com side. Also on the platform Karnon was lagging behind so we had to make some changes. And in terms of our play on the platforms, so that has also yielded good results. There’s a combination of these two things which has led to this growth.
Ritesh Shah
Sure. And this last question, what is the motivation of changing the depreciation policy right now?
Amit Kumar Gupta
So Ritesh, I think depreciation policy was very skewed whenever we used our foaming machines last. If you see an example of our foaming machine in Greater Noida, it has been installed for last 22 years now and it’s functioning well, producing around 25,000 tons of foam or rather more than that per annum. Generally these machines last for very long, around 40 to 50 years. So if we follow the written down method then potentially it depreciates the machine to the extent of 70, 75% in the first 34 years which does not reflect the actual amortization of the asset on the revenue that it generates and it is it excuse the things so.
And secondly, the second biggest part of our assets is generally plant building and building building and related asset plants don’t get depreciated. Even buildings have a life of 40 to 50 years. So just to align the cost of depreciation which is allocated to business on a year on year basis in line with what with the useful life of that particular asset and what value it delivers over 4050 years. We have realigned the policy to reflect realistic.
Ritesh Shah
Sir, I will call you for this separately. And so just last question. I think we had 40 crores of some synergy savings which were still pending. I think we had given a number of 160 because 4040 was pending. It was contingent on certain new machines. It could just provide some color on the timelines of the incremental synergy pending benefit and by when the machines will come. Thank you.
Amit Kumar Gupta
So you are right. We had said that we will realize a total synergy of 250 crores out of which around 190, 200 we had till 2 quarters back. 40 crores was to come from some new machines which were imported with a new material of malleable fiber to be used as a comfort layer that is currently under installation. It is delayed by a quarter and a half but I think by the mid or end of this quarter that will be installed and we might see that scaling up in the subsequent quarters.
Ritesh Shah
Thank you, sir. Thank you so much.
Amit Kumar Gupta
Thank you.
Operator
Thank you. The next question is from Rishi Modi from RDM Advisory llp. Please go ahead.
Ritesh Shah
Yeah, hi sir. Am I audible?
Amit Kumar Gupta
Yes
Operator
Sir, you are.
Ritesh Shah
Yeah. My first question, we’ve seen impressive volume growth in technical form and comfort form in this quarter. Just wanted to check for any one off B2B orders in technical form or any inventory stocking up by the channel in lieu of price hikes due to crude volatility.
Unidentified Participant
So. As far as the, if I look at the annual picture of both B2B and the comfort zone. So we started putting more focus on these two segments and there were some structural changes in the distribution and also the way we were approaching the market. So one is a function of that. So overall we have grown in both these segments upwards of 15%. Waterfall. There has been a spike which is primarily two reasons. One is whatever step we had taken to build this business further, that is one. And second, when the war broke we were in a much better position to continue serviceability in the market.
So there were finding it difficult to maintain their supply chains. Those orders also got shifted to us. But if you see on an annual basis, I mean these businesses are now at a level of 15% growth on an annual basis. And our plan for the next year is also on the similar line.
Ritesh Shah
Okay, so this customer gain that we have done right, say people who weren’t able to Supply to these guys. Now we’ve gotten them as our clients or incremental volumes from existing clients who were buying from somewhere else. Is that also continuing? Like maybe because we’re giving better service or better pricing or if they have reverted back to their existing suppliers?
Unidentified Participant
Sure. As I said, we had taken these two as also focus businesses where some changes had to be made which took some time. So that was irrespective of the war and the scarcity of raw material. So those actions were already started getting implemented and showing results. Now as far as this was concerned, at the March and the month of April is concerned, this is where some customers who have moved out also started buying. So then obviously we will retain them and that’s what the plan is going forward.
Ritesh Shah
Okay, got it. My second question was on the international piece. Right. So I’ll split Australia. Our gross margins have expanded quarter on quarter while also other expenses have increased quarter on quarter. 50 crores in Q4 versus 42 crores expense in Q3. Is this some declassification or could you help me understand that? And then also on the Spain piece, the gross mark and the fixed expense as a percentage has come to about 20% of our revenue. How much of that is fixed versus variables. So in case things the gross mark like.
I’m just trying to assess the sensitivity here.
Amit Kumar Gupta
Sure. So let’s start with Australia. Australia has shown a steep increase in gross margin in the current year. Current quarter I would say, not the year. Two reasons. One, yes, efficiency measures have been there on for last one year or so. The margins we achieved, EBITDA margins we achieved there last year was 6%. So we were on an improvement spree throughout the year. The methods that were applied was one, creating efficiency with the waste that they created and secondly, taking price hikes with the customers which had not been taken for a very, very long period.
Now this little bit of disruption in the raw material prices created a little bit of plus and minus in Australia, but I think to some extent maybe around 54, 55 odd percent Australia, Australian margins have improved. There may be aberration of 3, 4%. So you should be able to see 4, 5% higher than the normal margins it used to had in the past. Now as far as the fixed costs are concerned, I would request you look at it as a percentage of total revenue because exchange rates have gone differently.
So when you convert a trillion dollar into rupee, which was 55 a year before to 65 now, it’s a different scenario. Right. So 6 first reflect only that portion when you move to Spain. Because Europe was going through challenges. So the pricing realization that could be done in Spain was much better. I would not say 30 to 33% would be a stable sort of margin but I would, I can comment that around between 30 to 32% would be a stable margin. It will not revert to 28, 29 which we had seen in the past.
And yeah, that way the profitability will remain there.
Ritesh Shah
Now is there still scope for cost optimization there or that 20% other expenses is going to largely remain around that 20% mark.
Amit Kumar Gupta
So some minor improvements may happen but broadly it would remain the same. Yet turnover improves because there is a very strict cost control there. If you see the fiscal structure between Australia and Spain, Spain is very small but scope is always there. But I would not say any material sort of. And our intent with both Australia and Spain is also not to go to a profitability of 16, 18% because we don’t, we know those type of profitability don’t survive in those countries. So intent is to retain it between 10 to 12% which to some extent is feasible in these countries and possible.
Ritesh Shah
Okay. Rishi
Operator
Sir, please join. Yeah, just
Ritesh Shah
A quick question. Let me. It’s a continuation on the international piece only you all were planning to sell or you were exploring whether to sell off the international business that’s still in the plans or we are now going to continue with this business.
Rahul Gautam
I think one of the investor conferences I had mentioned this that we are open to that and I think our position remains the same that we are open to that. But that doesn’t mean that we are switched off from it. We will pursue that and wait for right person to come or the right party to come at the right time. But at the moment it’s we still do whatever is necessary to maintain that business.
Ritesh Shah
Got it. Thank you. That’s it from my.
Operator
Thank you. Thank you. Participants are requested to limit your questions to per participant. We have next question from Pallavi Deshpandia from Sanuksha Capital. Please go ahead. Yes, we can.
Unidentified Participant
We just wanted to understand this going back to the previous, you know, inventory question and channel stocking on that comfort form, technical form. I just wanted to. Because the raw material prices have increased so much. Are we saying there was no channel stocking in this quarter?
Amit Kumar Gupta
No Pallavi, as Rakesh sir already mentioned, higher volume because of two reasons. One, the work that has been done throughout the year with the new customers. And second, because some of the fear smaller players have gone out of business and that business came to us so there we don’t anticipate any major channel stocking and foam is a very bulky material. You can’t go beyond the volume to stock foam. It’s very difficult. So we don’t anticipate any choking or blocking of the channels and resulting in any challenges in the subsequent months.
It was a genuine demand in the market which the existing suppliers of those customers could not fulfill, which we went ahead and fulfilled. But that was some part of the growth. The rest part of the growth was our own efforts and what we had been doing in the past.
Operator
Thank you. The next question is from Pritesh Chera from Lucky. Please go ahead.
Ritesh Shah
Just one question and a slightly broader observation. So what specifically since the last two years have we brought in for the volume growths in the India business improving and you know, if you could articulate that and the sustainance of the same. So we have on a double digit number this year as well. So some key points there, sir.
Amit Kumar Gupta
Yeah, see there were multiple things, one very sharp focus on all these. So once we took over Carlon, it was a new animal for us. A very different sort of a company though we used to sell the same products but the companies were very, very different. The way it sold, the way it produced, the way it managed the business. We struggled with it for a year or two and I think you all are witness to this. That’s how we struggled. But that also led us to more detailing and more focused on our existing business.
And we identified certain priorities for ourselves which we had reflected in our commitments to the market. Also of course we could partly meet them going ahead. We hope to meet the full commitment which was growth on one side and profitability on the other side. So a very profitable growth sort of a model. The entire focus and energy of the organization was shifted to these two. The discussions that now we have, the opportunities that now we explore, the push that we give to the market, each and every category, what we study and try to see what best can be done.
I think the level of working and the level of dedication in those have gone up and the focus of the organization to long term planning has solidified. Which also gives us the confidence to tell you that this growth is going to continue in future. Nothing else. I don’t think raw material has changed, I don’t think market has changed, customer has changed or anyone has changed. But yet our way of looking at the business and putting targets in front of ourselves has changed.
Ritesh Shah
Any channel related changes. And since both the brands are operating in different geographies but trying to Also have aspirations in their core geographies.
Unidentified Participant
So the brand wise focus continues because they both have evolved in their own way. So that is one which we have put more focus on. And second is also on the wide basis for channel expansion. The last year also saw a massive expansion covering many areas where we were not represented. There is also a system to look at our channel partners where we are also getting more and more accountability on that side. So since they are because we have now integrated both the brands under the channel partner.
So that piece is also being looked at very closely being monitored and accountability 6 so I think sum total of all these things is we are getting better as far as the channel is concerned
Ritesh Shah
In market shares,
Unidentified Participant
Market share. There is no recent study that there is association used to do it. But our belief is that the. There is a. There is a. I mean we can sense that at least for both the brands and with the U2O kind of initiative and E Com the organized sector play is improving. So which from last couple of years was on the other direction where the unorganized was kind of growing at a faster rate than organized. We are seeing this change now moving more towards organic side.
Ritesh Shah
Okay,
Operator
Thank you. The next question is from Sequent Investment. Please go ahead.
Ritesh Shah
Thank you so much. Thank you for the opportunity. Sir, I wanted to understand on the TDI part, if I heard you right earlier in the call you said that GMXE is a player who is the biggest supplier of TDI. But they had their own factories, you know, closed, you know, during the war. And also what we heard that one of the biggest, probably the biggest player in China and world. And they had also stopped supplying TDI from China. So how have we managed to procure the required amount of TBI quantity?
Unidentified Participant
So. So you’re right. I mean GNFC was shut down first on a technical reason and then later also because of the. In the month of March because of the natural gas energy. So. But the shutdowns were temporary in nature. And during that part the traders who import to cater to the balance 40% of the market they had increased the rates. So the material was available, but it was available at a much higher price. So that is one part. And second, we had about a few months back we had also taken an inconsistent decision to also hedge our risk.
So we had introduced a new supply partner and who was very supportive during this time. And we were able to meet the requirements. So we did not have any stock out situation. Though we had to pay a little more for TDI at few times during the month.
Ritesh Shah
Okay. I mean, was this new supplier Chinese?
Unidentified Participant
So. So it’s a. It’s a mix of both the. Korea, there was some material from Japan which was coming in and also from China. So China it is China shutdown. China also has more than one manufacturer. There are a couple of manufacturers who are there. Some of them, they bring in the material on their own and they supply it locally as per the pricing of the market. And some you can import directly. So it’s a mix of both.
Ritesh Shah
Right. Got it. That’s also my side. And all the best. Thank you.
Unidentified Participant
Yes. Thank you.
Operator
Thank you. Ladies and gentlemen, we will take this as our last question. I would now like to hand the conference over to Mr. Kesha. Please go ahead, sir.
Ritesh Shah
Yeah. Thanks, Shailendra. Thank you all for joining onto the call. Rahulji, if you’d like to please have some closing remarks. Thank you so much for your time here.
Rahul Gautam
Thank you very much for conducting the call. As usual, it has been a lot of incisive questions. And let me just say that we continue to learn as you question us and we keep answering that with that. I would just wish you all, all the best. Have a great weekend and we will soon meet again in another quarter. Thank you very much.
Unidentified Participant
Thank
Amit Kumar Gupta
You.
Unidentified Participant
Thank you.
Operator
Thank you. On behalf of. On behalf of Invested Capital Services India Private Limited, that concludes this conference. Thank you for joining us. And you may now disconnect your lines. Thank you.