Wakefit flags margin pressure from input inflation, shares fall 7%
Shares of the home and sleep solutions company Wakefit Innovations Ltd fell as much as 7% on Friday after warning that a sharp rise in crude oil-related input costs could pressure margins and short-term profitability despite recent price increases. This shows how rising oil prices due to disruptions caused by the US-Iran war are beginning to squeeze consumer businesses beyond traditionally fuel-intensive sectors.
“The combined impact of higher input costs and price pass-through may limit margin expansion in the near term,” Chief Financial Officer Parul Gupta said on an analyst call on Friday.
The company announced net profit on Thursday ₹Compared to a loss of ₹121.8 crore in the fourth quarter of FY26. ₹26.2 crore a year ago due to one-time deferred tax credit. ₹98.1 crore. Net profit increased by 282% respectively ₹31.9 crore in the December quarter.
Wakefit’s shares expired on: ₹134.51 on the National Stock Exchange (NSE) on Friday fell 6.6% on a day when the benchmark Nifty50 closed 0.3% higher. The company’s shares have fallen 28% since January, compared to a 9% decline in the Nifty50.
Wakefit reported an earnings before interest, tax, depreciation and amortization (EBITDA) margin of 6.3% for the quarter. The company said higher spending on advertising and marketing initiatives, combined with increased competitive intensity in the category, led to moderation in margins during the quarter.
Marketing expenses for the reporting quarter accounted for approximately 7.3% of revenue from operations, compared to 5.3% in the previous quarter.
The mattress industry’s key raw materials, including polyol and toluene diisocyanate, are obtained from crude oil. Prices for some raw materials rose by as much as 80 percent, and even 160 percent at one point, compared to pre-war levels, the administration said.
Most of the macro assumptions for India’s outlook this year are built around crude oil prices averaging around $80-85 per barrel, according to a report by Worldpanel by Numerator FMCG Pulse released earlier this week. It warns that if prices remain around the current $100 level for a long period of time, this could significantly change cost structures across sectors.
“We are closely monitoring raw material prices to navigate the volatile environment with prudent price increases and focused cost optimization efforts,” company management said. “We made two measured, calibrated price increases, around 7-8 percent in March and around 7-8 percent in April.”
Wakefit’s revenue from operations increased ₹344 crore in the 4th quarter of FY26. ₹303 crore a year ago. In all FY26, revenue grew 17.5%. ₹1,534 crore ₹1,305 crore in FY25.
India’s home furniture and decor market is estimated to be: ₹790-860 billion in 2024, according to industry estimates.
The industry is currently focusing on massive offline expansion and advertising campaigns, which is not very exciting for analysts. Wakefit recently ran a major campaign featuring actor-comedian Johnny Lever and another campaign for Mother’s Day. Its rival, Sleep Company, went one step ahead with massive advertisements featuring cricketer MS Dhoni.
“We do not expect (Wakefit’s) investment plans to expand its D2C presence through new store additions and marketing investments to provide an immediate clear advantage in competition with unorganized players,” analysts at ICICI Securities said in an IPO note ahead of its IPO in December.
As of the end of March 2026, Wakefit had 139 active company-operated stores in 76 cities. It added a net 34 stores during the year.
