Shares of home and sleep solutions company Wakefit Innovations Ltd fell as much as 7% on Friday after it warned that a sharp rise in crude oil-linked input costs could weigh on margins and near-term profitability despite the recent price hikes. This shows how elevated oil prices due to the US-Iran war-led disruptions are starting to squeeze consumer businesses beyond traditionally fuel-intensive sectors.
“The combined impact of higher input costs and price pass-through may constrain margin expansion in the near term,” said Parul Gupta, chief financial officer, in an analyst call on Friday.
The company on Thursday reported a net profit of ₹121.8 crore in the fourth quarter of FY26, as against a loss of ₹26.2 crore a year ago, due to a one-time deferred tax credit of ₹98.1 crore. Sequentially, net profit grew 282% from ₹31.9 crore in the December quarter.
Shares of Wakefit ended at ₹134.51 on the National Stock Exchange (NSE) on Friday, 6.6% lower on a day that saw benchmark Nifty50 close 0.3% higher. Shares of the company have fallen 28% since January, compared to a 9% decline in Nifty50.
Wakefit reported an earnings before interest, tax, depreciation, and amortization (Ebitda) margin of 6.3% in the quarter. The company said higher spending on advertising and marketing initiatives, coupled with heightened competitive intensity in the category, led to moderation in margins during the quarter.
Its marketing spending for the reporting quarter was about 7.3% of the revenue from operations from 5.3% in the previous quarter.
The mattress industry's key raw materials, including polyol and toluene diisocyanate, are derived from crude oil. Prices for some raw materials rose by as much as 80% and even 160% from the pre-war period at one point, the management said.
Most macro assumptions for India’s outlook for the year were built around crude oil prices averaging $80-85 a barrel, according to Worldpanel by Numerator’s FMCG Pulse published earlier this week. If prices hover around the current level of $100 for a prolonged period, it could significantly alter cost structures across sectors, it warns.
“We are closely monitoring raw material prices to navigate the volatile environment with prudent price increases and focused cost optimization efforts,” the company management said. “We have done two measured calibrated price increases of about 7-8% in March and 7-8% in April.”
Wakefit’s revenue from operations rose to ₹344 crore in Q4 FY26 from ₹303 crore a year ago. For the entire FY26, the revenue was up 17.5% at ₹1,534 crore from ₹1,305 crore in FY25.
India’s home furnishings and decor market was estimated at ₹790-860 billion in 2024, according to industry estimates.
The industry is currently focusing on massive offline expansion and advertisement campaigns, which is not exciting analysts. Wakefit recently ran a big campaign featuring actor-comedian Johnny Lever and another for Mother's Day. Its rival Sleep Company went a notch higher with massive ads featuring cricketer M.S. Dhoni.
“We do not expect its (Wakefit's) investment plans to expand D2C presence through new store additions and marketing investments to immediately provide a clear edge in competing with unorganized players,” analysts at ICICI Securities had said in an IPO note ahead of its listing in December.
At the end of March 2026, Wakefit had 139 active company-owned company-operated stores across 76 cities. Over the year, it net added 34 stores.
