Duroflex bets on ‘designed to de-stress’ positioning as profitability improves ahead of IPO

As it prepares for a public listing, Duroflex is repositioning itself from a legacy mattress maker into a broader sleep and recovery company, banking on innovation, deeper manufacturing control and a sharper consumer promise to drive growth beyond its southern stronghold.

The 60-year-old company, founded in 1963, has steadily expanded from mattresses into sofas, recliners, smart beds and foam, while sharpening its focus on premiumisation and experience-led retail. “Duroflex has always been built on the spirit of innovation,” said chairman and managing director Jacob George. “From rubberised coir to doctor-recommended mattresses to bed-in-a-box, we’ve consistently done industry-firsts, but always for consumers, not for competition.”

That consumer-first approach is now being anchored around a new brand positioning: “designed to de-stress”, as sleep has become a central pillar of health in post-pandemic India.

Innovation-led growth and new launches

The latest example of this strategy is Airboost, a new mattress launched earlier this week in the mid-premium to premium price band of ₹20,000–₹35,000. Developed through in-house R&D and manufactured using Duroflex’s proprietary “Airknit” technology, the mattress uses nearly one lakh polymer filaments in a king-size version, making it significantly more breathable than conventional mattresses.

“Stress came out as one of the biggest pain points when we spoke to consumers,” said group CEO Sridhar Balakrishnan. “This product wins decisively in alleviating pressure and improving entry sleep, which is critical for deep sleep and recovery.”

Duroflex runs a dedicated sleep lab where mattresses are tested using sensors that track posture, pressure points, breathing, heart rate and blood oxygen levels. “Sleep is a very serious business for us,” George said. “There are people in our labs day and night testing products with medical-grade equipment.”

Strong financial traction ahead of DRHP

According to its draft red herring prospectus (DRHP), revenue from operations rose from ₹10,574.9 million in FY23 to ₹11,342.5 million in FY25. EBITDA nearly doubled in the same period, growing from ₹568.5 million to ₹979.8 million, with margins expanding from 5.38% to 8.64%.

Gross margins remained robust at 42.95% in FY25, among the highest in the organised mattress segment, while profit after tax turned positive at ₹471.6 million, translating into a PAT margin of 4.16%.

Balakrishnan said the company closed FY25 with revenue of ₹1,134 crore, EBITDA of about ₹98 crore and return on capital employed of 14.9%, one of the highest among peers with over ₹500 crore in turnover. “We also added nearly ₹100 crore of cash to the balance sheet last year,” he said.

Retail expansion remains a key growth lever. Duroflex ended FY25 with 71 company-owned, company-operated (COCO) stores and over 5,400 trade outlets, covering 284 towns. The company plans to add around 150 COCO stores over the next three years, with IPO proceeds earmarked largely for store expansion, marketing and general corporate purposes.

Manufacturing is largely in-house, particularly for mattresses and foam. The company operates multiple facilities across Hosur, Indore and Hyderabad, along with 19 warehouses nationwide. In furniture, about 85% of production is in-house, including a 3,00,000 sq. ft. sofa manufacturing plant with a capacity of nearly 80,000 seats per month.

While 65% of revenue still comes from southern India, markets outside the region are emerging as major growth drivers. “We already have 20% market share in the South,” George said. “The real headroom is in the rest of India, where organised penetration is still low.”

Market is shifting

A large part of Duroflex’s growth thesis rests on the gradual shift from an unorganised to a branded mattress and furniture market, a transition the company believes is accelerating. “Ten years ago, health conversations were about diet and exercise. Today, you can’t talk about health without talking about sleep,” Balakrishnan said, adding that rising awareness, higher marketing spends by organised players and greater access to information are pushing consumers to trade up from local, unbranded products.

To address the fragmented market without diluting its core brand, Duroflex operates a house-of-brands strategy. While Duroflex caters to the mid-premium and premium segments, brands like Perfect Rest and Sleepyhead address economy and first-jobber cohorts, and Durofoam targets institutional and foam-focused demand. “This allows us to participate across price points while keeping the equity of Duroflex intact,” Balakrishnan explained.

Duroflex believes it is well-positioned for its next phase. “We’re not worried about the IPO process or scaling challenges,” George said. “What we’re focused on is executing our strategy well.”