EUREKAFORB - Eureka Forbes

📊 NSE: EUREKAFORB 🏢 Domestic Appliances 📅 Last Updated: 12/13/2025 21:59

💰 Financial Performance

Revenue Growth by Segment

The company achieved a total revenue of INR 2,436 Cr in FY25, representing a 12.0% growth for the continuing business. Revenue contribution by segment in FY25 was: Electric Water Purifiers at 44%, Service (including AMC, filters, and spares) at 33%, Vacuum Cleaners at 14%, and Others (Non-electric purifiers, Air, Softeners, B2B) at 9%. H1 FY26 revenue reached INR 1,381 Cr, a growth of 12.7% YoY.

Geographic Revenue Split

Not disclosed in available documents; however, the company operates primarily in India with its registered office in Mumbai and a nationwide service network for its Aquaguard brand.

Profitability Margins

Gross margins remained range-bound at 56.5% in Q2 FY26, up 25 bps YoY, despite product growth outpacing service growth. Reported PAT for H1 FY26 was INR 100.1 Cr, growing 28.9% YoY. Q2 FY26 PAT grew 32% YoY. FY25 Free Cash Flow (FCF) was INR 214 Cr, representing 131% of PAT.

EBITDA Margin

Adjusted EBITDA margin improved to 11.7% in FY25 from 10.3% in FY24. In Q2 FY26, Adjusted EBITDA crossed INR 100 Cr with a margin of 13.1%, an expansion of 162 bps YoY. H1 FY26 Adjusted EBITDA was INR 168.5 Cr, a 20% YoY growth with margins up 70 bps.

Capital Expenditure

The company maintains high capital efficiency with a Free Cash Flow to Capex ratio of 3.9x in FY25. Specific planned INR Cr for future capex is not disclosed, but a new R&D center is under development for commissioning by Q3 FY26.

Credit Rating & Borrowing

CARE Ratings upgraded the long-term bank facilities and issuer rating to CARE AA; Stable in November 2025, up from CARE AA-; Stable in December 2024. This reflects sustained improvement in scale and profitability. The company moved from a net debt position in FY23 to a net surplus of INR 284 Cr in FY25.

⚙️ Operational Drivers

Raw Materials

Specific raw material names like plastic resins or specialized membranes are not listed, but 'Filters and Spares' are identified as critical components for the service segment (33% of revenue) and a key monetization lever for the out-of-warranty customer base.

Key Suppliers

Not disclosed in available documents; however, management mentioned ongoing vendor renegotiations and institutionalized efficiency benefits on the COGS side to maintain gross margins.

Capacity Expansion

Current capacity in units is not specified, but the company is scaling up with '2x launch' and Robotics investments. A new R&D center is scheduled for commissioning by Q3 FY26 to support product innovation.

Raw Material Costs

COGS savings are driven by a 'War on Waste' program and vendor renegotiations. Gross margins are managed through a healthy product/service mix, keeping them range-bound at approximately 56.5% despite inflationary pressures.

Manufacturing Efficiency

The company reported a Return on Capital Employed (ROCE) of >350% in FY25, indicating extremely high capital and manufacturing efficiency. Operating leverage is driving margin expansion as Opex (ex-A&SP) dropped from 43.9% of revenue in FY23 to 36.0% in FY25.

📈 Strategic Growth

Expected Growth Rate

12%

Growth Strategy

Growth will be achieved by tapping into the large base of out-of-warranty Aquaguard customers for filter replacements, which was previously lost to the local market. The company is also expanding into new categories like Robotics and softeners, increasing A&SP spend (up 25% in FY25) to 10.7% of revenue, and leveraging a new R&D center for faster product launches.

Products & Services

Electric Water Purifiers, Vacuum Cleaners, Air Purifiers, Water Softeners, B2B Water Products, and Service AMCs/Filter replacements.

Brand Portfolio

Aquaguard, Eureka Forbes, EuroChamps (internal talent branding).

New Products/Services

New R&D-led launches and Robotics investments are expected to scale up in FY26. Service revenue from non-AMC customers for filter replacement is a newly targeted growth vector.

Market Expansion

The company is targeting low-penetration categories: Water Purifiers (6-7% penetration), Vacuum Cleaners (<2%), and others (<1%), projecting strong growth over the next 5 years.

Market Share & Ranking

Not disclosed in available documents, though it claims a 'large base' of Aquaguard customers and industry-leading capital efficiency.

Strategic Alliances

The company was acquired by Advent International Corporation, which has driven the transformation journey since FY22.

🌍 External Factors

Industry Trends

The industry is seeing a shift from pure product sales to 'lifetime value' models focusing on recurring service and filter revenue. Categories like water purifiers are projected to grow strongly due to low current penetration (6-7%).

Competitive Landscape

Competitors include organized water purifier brands and a significant unorganized local market for filters and spare parts.

Competitive Moat

The primary moat is the massive installed base of Aquaguard customers and a specialized direct-to-consumer service network. This creates a high-margin annuity stream (33% of revenue) that is difficult for new entrants to replicate at scale.

Macro Economic Sensitivity

The business is sensitive to consumer discretionary spending and urban penetration rates, as its core categories currently have low penetration (under 10%).

Consumer Behavior

There is an increasing trend toward health and hygiene products, and a shift toward professional AMC services over local technicians for water purifier maintenance.

⚖️ Regulatory & Governance

Industry Regulations

Operations comply with the Companies Act, 2013, specifically sections 134, 135 (CSR), and 136 regarding financial disclosures and internal financial controls.

Legal Contingencies

The company reported a net loss of INR 56.46 Lakhs for a non-material subsidiary (Electrical & Electronic Appliances Spare Parts) for the year ended March 31, 2025. No major pending litigation values were disclosed in the provided text.

⚠️ Risk Analysis

Key Uncertainties

The success of the 'filter playbook' to recapture the out-of-warranty market from local players is a key uncertainty. Additionally, the amortization of AMC revenue vs. upfront cost recording can create short-term margin volatility.