Synopsis:
Eureka Forbes has planned an ambitious FY30 roadmap, with a goal of doubling revenue and tapping a large under-penetrated market for water and air purification. As a result, the stock has come into the focus of investors.
Eureka Forbes is not making much noise but the fact is that it is preparing for a massive expansion phase, almost doubling its focus on the premium water and air purification segment, as the demand is rising all over India. With a daring revenue target for FY30, the share has become a subject of discussion among investors all of a sudden.
With a market capitalisation of Rs 12,335 crore, the shares of Eureka Forbes Ltd closed at Rs 634.95 per share on Friday, up 0.14 percent from its previous day’s closing price of Rs 634.05 per share. In the last one year, the stock has delivered a return of 3 percent, as compared to NIFTY 50’s return of 6 percent during the same period.
Future Highlights
Eureka Forbes has renewed its long-term market outlook, anticipating superb growth for its core categories till FY’30. The company expects the combined market for water and home-cleaning solutions to grow from Rs 9,749 crore in FY’23 to Rs 26,300 crore by FY’30, thus reflecting a CAGR of 15 percent over that period, which was earlier expected to grow at 13 percent. This upgrade implies increasing consumer spending on hygiene, better penetration of branded appliances, and a shift to premium, technology-led products.
The company expects its flagship water purifier segment to expand to double (from FY23) both in terms of products and services, reaching Rs 10,200 crore and Rs 9,000 crore respectively by FY’30, growing at a CAGR of 13-14 percent during the period. However, it is to be noted that the company has kept its guidance unchanged for this category.
The water softener segment has also been revised upwards, and the expected size for FY’30 has been increased from Rs 1,935 crore to Rs 3,000 crore, thus raising the CAGR from 10 percent to 17 percent.
The vacuum cleaners, air purifiers, and water softeners, which were earlier just the smaller parts of the portfolio, are now expected to grow much faster than before. To that extent, growth expectations for vacuum cleaners have been revised from 17 percent CAGR to 29 percent, while air purifiers have been revised from 18 percent to 25 percent CAGR, signaling stronger demand for premium health and wellness appliances in urban markets. Also, Eureka Forbes has presented a large-scale growth plan for FY30 and is looking to increase its size almost twofold within the next five years.
The firm intends to grow its revenue from Rs 2,436 crores in FY25 to Rs 5,400-5,600 crores by FY30, thus indicating an attractive 17-18 percent CAGR. The profit margin is anticipated to improve even faster, with an adjusted EBITDA estimated to increase from Rs 285 crores to Rs 800-850 crores, thus reflecting a healthy 23-24 percent CAGR.
Moreover, the enterprise is setting a goal for a substantial rise in the adj. EBITDA margin up to approximately 15 percent, where the emphasis on operating leverage, premiumisation, and a stronger service-driven component becomes quite evident. This shows
The overall guidance upgrade that Eureka Forbes is signalling points to the acceleration of category adoption, deeper penetration across Tier II and Tier III regions, and the service revenue base, which is expanding and thus becoming more and more a source of long-term growth for the company.
Product Penetration Highlights
The penetration levels across the core categories of Eureka Forbes are still low, which means that there is a long way ahead for the company to grow. Water purifiers are present in only 6 percent of households, and are expected to gradually increase to 7 percent, while water-purifier services are still at less than 25 percent penetration.
Water softeners have a penetration rate of less than 1 percent, which means that there is a huge untapped potential. Vacuum cleaners, as a result of increasing urban adoption, are only at 2 percent penetration, and air purifiers are still at about 1 percent. These low penetration rates are a sign that even slight increments in household adoption can have a significant impact on the total market expansion in the coming years.
About the Company, Financials and Other Highlights
Eureka Forbes is involved in the production, exchange, rental, sales, and service of vacuum cleaners, water filter cum purifiers, electronic air cleaning systems, and other related products in India and abroad. Additionally, the company offers water solutions.
The company’s customer base comprises consumers, schools, and educational institutions. It also serves retail stores, households, corporate clients, banks, IT companies, hospitals, small and medium enterprises (SMEs), and hotels. Besides that, it caters to government institutions, including railways, armed forces, and different departments, through government e-marts.
It offers various home and health appliances such as water purifiers, vacuum cleaners, and air purifiers, which are primarily concerned with pure water, fresh air, and hygienic living areas. As a way of maintaining the products, the company also sells filters (after servicing) and water softeners for making hard water soft. It has two manufacturing facilities at Dehradun and Bengaluru.
The company holds the position of the biggest electric water purifier company in India and has a 40-45 percent share of the organised market. The company is also the leader in vacuum cleaners with a 60-70 percent share. It has a strong presence of 21,000 outlets across over 2,700 towns and 19,500 pincodes.
Eureka Forbes reported a core revenue of Rs 772 crore in Q2 FY26, a growth of 15 percent as compared to Rs 673 crore in Q2 FY25. Additionally, it grew by 27 percent from Rs 608 crore in Q1 FY26.
Regarding profitability, it reported a net profit of Rs 63 crore in Q2 FY26, a 31 percent increase from Rs 48 crore in Q2 FY25. Additionally, it recorded a growth of 62 percent from Rs 39 crore in Q1 FY26.
Written by Satyajeet Mukherjee
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