Founded in 1982, Eureka Forbes is India's largest electric water purifier (EWP) maker with a 40-45 per cent share of the Rs 4,900 crore organised market, maintaining a 10-12 percentage point lead over its nearest rival. With penetration levels at just 6 per cent, Nuvama expects Eureka Forbes to be the biggest beneficiary of category tailwinds driven by urbanisation, rising piped water access, and health awareness.
The brokerage projects a 14 per cent revenue CAGR for FY25-28, with Ebitda/PAT growing at 24 per cent/31 per cent CAGR respectively, aided by strong operating leverage and cost optimisation. After-sales service, which already contributes a third of revenues, is expected to be a key growth driver, with Nuvama forecasting a 25 per cent-plus CAGR in segment profit over the same period.
Eureka Forbes also leads the vacuum cleaner (VC) category, commanding a 60-70 per cent market share in a Rs 600 crore segment with less than 2 per cent penetration. Alongside 30 new product launches in FY25, expanded R&D, higher capex, and foray into smart connected appliances, the company is seen strengthening its growth runway.
Nuvama highlights Eureka Forbes' strong free cash flow generation-projecting a 24 per cent CAGR in FCF over FY25-28 with FCF-to-revenue ratios above peers-as evidence of its robust financial model.
"Eureka Forbes offers a strong compounding opportunity in consumer durables. With leadership in two underpenetrated categories and an expanding after-sales ecosystem, we see scope for sustained earnings outperformance," Nuvama said.