Wakefit says profit turnaround is no flash in the pan as it ramps up offline push

Wakefit IPO

Wakefit Innovations expects its recent swing back to profitability to sustain as the company accelerates an ambitious offline expansion and pushes deeper into furniture and home-solutions categories. The comment gain significance at a time several new-age companies have seen profits vanish, after the one-time pop in profits ahead of the IPO.

“The profitability is not a flash in the pan,” Executive Director Chaitanya Ramalingegowda said in an interview with Moneycontrol. The company returned to the black in the first half of FY26 after three years of losses, which management attributes to deliberate, long-term capacity building rather than overspending. “The losses came from doing the hard work of building the nuts and bolts for the future,” he said. The digital-first brand is currently open for subscription with its ₹1,289-crore IPO, which closes on December 10.

Offline Retail Becomes the Growth Engine

Although Wakefit built its brand online, its next big bet is unmistakably offline. The company operates about 125 company-owned experience stores and plans to expand sharply using IPO proceeds. The push is driven by customer behaviour: large-ticket furniture and décor purchases still require physical exploration.

“Stores enable consultative, high-involvement conversations that build trust and drive premiumisation,” CEO Ankit Garg said. The outlets run on an asset-light model with minimal display inventory and offer payback periods of under a year — far shorter than typical retail categories. Expansion will focus on Tier-2 and Tier-3 markets such as Jodhpur, Kota and Kashmir, with location decisions guided by data models that forecast revenue and payback.

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Furniture Is Rising Faster and Will Rebalance the Mix

Wakefit crossed ₹1,000 crore in revenue with a 25% CAGR over three years, but management expects the next leg of growth to be driven by a faster-scaling furniture portfolio, higher repeat purchases and same-store sales growth. Mattresses still contribute ~60% of revenue, but furniture is growing 10–15 percentage points faster and is expected to narrow the gap over the next five years.

Customer behaviour has shaped this evolution, Garg said: “People bought mattresses from us and then asked for pillows, bed frames, sofas, lighting. That feedback pushed us from a sleep brand to a full home-solutions company.”

Why Profitability Should Hold Up

A key drag during the loss-making period was the commissioning of a large furniture factory near Hosur, which carried full costs upfront while utilisation took nearly eight quarters to ramp. With the plant now running multiple shifts, fixed-cost absorption has improved, boosting margins. Higher manufacturing integration, in-house logistics and last-mile control have also strengthened unit economics.

Management argues that these structural shifts — not one-off tailwinds — underpin recent profitability. Rising contribution from furniture, better operating leverage and scale-driven efficiencies, they say, will continue to support margins.

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Crowded Market, Clear Positioning

Competition is intensifying with players like Ikea and established e-commerce marketplaces, but Wakefit is betting that design-led affordability, deep integration and customer trust will differentiate it. “We’re not traders; we’re builders,” Ramalingegowda said. “The next phase of growth will be built offline — in more Indian homes and across more rooms than just the bedroom.”