Eureka Forbes Limited — Q1 FY27 earnings call

Call held 13 Aug 2026

Management summary

Eureka Forbes delivered a solid start to FY27 with revenue growing 15.3% YoY to INR 701 crores, driven by strong performance in its product business, especially water purifiers and emerging categories. Despite healthy market share gains, profitability saw a slight dip with adjusted EBITDA margins at 10.5%, down 46 basis points YoY, primarily due to gross margin compression and planned growth investments. The company maintains a positive outlook for full-year growth and aims to keep EBITDA margins in line with the previous year.

Highlights

  • Revenue grew by 15.3% YoY to INR 701 crores, driven by broad-based growth across product categories.

  • Product business grew by "late teens", with water purifiers growing by "high teens" on double-digit volume growth.

  • Achieved healthy market share gains across the board in a competitive environment.

  • Ended the quarter with a strong net cash surplus of INR 425 crores.

  • Launched 4-year filter life water purifiers, being the first in the country to do so, addressing cost of ownership.

Concerns

  • Adjusted EBITDA margin declined by 46 basis points YoY to 10.5% due to moderation in gross margins and higher growth investments.

  • Gross margins stood at 58.4%, lower by 131 basis points YoY, impacted by higher commodity costs and adverse currency movements.

  • Price increases in AMC led to some moderation/deferral in service bookings growth, though service revenue growth was in line with previous quarters.

Key financials

  1. Revenue ₹701 Cr +15.3%YoY
  2. Adjusted EBITDA ₹74 Cr +10.5%YoY
  3. Adjusted EBITDA Margin 10.5%
  4. Gross Margin 58.4%
  5. Employee Costs ₹90 Cr +10.7%YoY
  6. Other Expenses (incl. A&SP) ₹162 Cr +21.4%YoY
  7. Reported PAT ₹55 Cr +44%YoY
  8. Pre-exceptional PAT ₹41 Cr +6.1%YoY

What they filed

Q1 FY27: revenue up 15.1%, net profit up 46.2% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue673 598 613 608 772 +15%645 +8%684 +12%700 +15%
EBITDA73 59 77 61 98 +34%69 +17%86 +12%69 +13%
Net profit48 35 49 39 63 +31%10 −71%51 +4%57 +46%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Capital allocation

high confidence
  • Liquidity Cash ₹425 Cr The company ended the quarter with a net cash surplus of INR 425 crores.
    Turning to balance sheet. We ended the quarter with a net cash surplus of INR425 crores.

Guidance & targets

Profitability

  • Full year EBITDA margins Profitability · FY27 · High confidence broadly in line with last year
    As shared earlier, we expect full year EBITDA margins to be broadly in line with last year.

    — Pratik Pota / Gaurav Khandelwal

Revenue

  • Full year growth Revenue · FY27 · Medium confidence clear step-up
    Looking ahead, given the strong start in Q1, we are confident of delivering a clear step-up in our FY27 full year growth.

    — Pratik Pota

ESOP Expense

  • Total ESOP expense ESOP Expense · FY27 · High confidence INR 25 crores to INR 26 crores
    We expect ESOP to be in the range of INR25 crores to INR26 crores. We should be in that range.

    — Management

Robotics Business

  • Revenue Robotics Business · by FY30 · High confidence INR 1,000 crores
    So all of these put together give us, we believe, a strong right to win in this category and which is exactly why we said that by FY30, this will be INR1,000 crores business for us going forward.

    — Management

Overall Revenue

  • Revenue scale up Overall Revenue · FY30 (vs FY25) · High confidence 2x revenue
    So, our ambition of 2x revenue from FY25 to FY30 and 3x EBITDA in the same period remains the North Star for us, and we remain confident of delivering that.

    — Management

Overall Profitability

  • EBITDA Overall Profitability · FY30 (vs FY25) · High confidence 3x EBITDA
    So, our ambition of 2x revenue from FY25 to FY30 and 3x EBITDA in the same period remains the North Star for us, and we remain confident of delivering that.

    — Management

A&SP Spend

  • Growth of A&SP spends A&SP Spend · FY27 · High confidence ahead of revenue growth
    I think first, at an overall year level, we do expect our A&SP spends to be ahead of revenue growth. So that is something that we are planning for.

    — Management

What to watch in Q2 FY27

Service Bookings Growth Normalization

Next quarter / Over time
Current Moderated/softer due to AMC price hikes
Target Reduction in deferrals, normalization of bookings growth

Why it matters

Service revenue is a key annuity stream; its recovery is crucial for overall growth and profitability.

When it comes to service bookings, however, given the price increase that we took, we did see some deferral and some postponement of AMC renewals, which we expect to reduce and mitigate and normalize over time.

Risks & concerns

  • Inflationary Pressures and Currency Volatility

    medium

    The operating landscape in Q1 continued to be impacted by inflationary pressures and currency volatility, contributing to moderation in gross margins.

    Management acknowledged

  • Challenging Cost Environment

    medium

    The cost environment remains challenging with no meaningful reduction in input costs, which impacted gross margins.

    Management acknowledged

  • Moderation in Service Bookings due to Price Hikes

    medium

    Price increases implemented in AMC led to some deferral and postponement of AMC renewals, resulting in softer bookings growth for the service segment.

    Management acknowledged

Q&A highlights

7 direct
Service Business Growth and AMC Price Hikes Direct
Our price increase that we took differ from the price increases for a single year AMC versus a multiyear AMC. The price increase, the band was roughly between 3% to 12%. We have, as you're aware, a number of initiatives going on driving our service revenue.

Addresses a key concern about the underperformance of the service segment and explains the impact of price hikes on bookings, while outlining mitigation strategies.

Asked by Siddhartha Bera (Nomura)

Future Price Hikes and Margin Management Direct
See, our current view at this point in time is that there is a momentum that is there in the category and across all the categories in which we are operating. Hence, we are going to be very calibrated and measured about any price hikes... our bias will be towards not disturbing that.

Clarifies the company's cautious approach to further price increases despite cost pressures, prioritizing growth momentum, and indicates focus on internal efficiencies to manage margins.

Asked by Siddhartha Bera (Nomura)

Breakdown of Q1 Growth (Volume vs. Price) Direct
We grew by high teens, like I said, and it was on the back of double-digit volume growth. So therefore, what we saw clearly was a volume-led growth in the case of water with some impact of price coming through.

Provides clarity on the drivers of strong product growth, confirming it was primarily volume-led, which is a positive signal for underlying demand.

Asked by Keshav Lahoti (HDFC Securities)

Innovation in Water Purifiers (Longer Filter Life) Direct
More recently, about 45 days ago, we were the first in the country to launch water purifiers with a four-year life... So, we were the first in the market, more generally, Umang, anything that helps unlock category barriers, that helps get new entrants in, and therefore helps grow the category, will always be to our advantage.

Highlights the company's proactive innovation strategy to address cost of ownership barriers and drive category growth, positioning them as a market leader.

Asked by Umang Mehta (Kotak Securities)

Strategy for Robotics Business and FY30 Target Direct
So all of these put together give us, we believe, a strong right to win in this category and which is exactly why we said that by FY30, this will be INR1,000 crores business for us going forward.

Details the comprehensive strategy for a high-growth emerging category (robotics) and provides a significant long-term revenue target, indicating strong conviction in its potential.

Asked by Vikram Kotak (Ace Lansdowne)

FY27 Margin Outlook vs. Long-Term Margin Expansion Goal Direct
I think you'll appreciate that this year has been extremely unusual... And with that context, we believe that aiming to hold on to margins itself would be a very good outcome to achieve... Our goal position at this point in time, as I mentioned, is to aim for margins same as last year.

Clarifies the near-term margin strategy, indicating a pause in the previous annual margin expansion goal due to an "unusual" cost environment, setting realistic expectations for FY27.

Asked by Mayur Parkeria (Wealth Managers)

Competition and Market Share Defense Strategy Direct
As India's largest and the most trusted water purifier brand, Aquaguard, I think, is at the forefront of driving innovation and driving category growth. We've got two strategic directions when it comes to water purifiers... Notwithstanding the entry of other players, like I said earlier on the call, in quarter 1, we have grown market share.

Addresses concerns about increasing competition by outlining a dual strategy of penetration/affordability and premiumization/differentiation, backed by evidence of market share gains in Q1.

Asked by Anjali Mohata (Melania Family Office)

3 min read 7 chapters

Detailed narrative

Strong Revenue Growth Driven by Product Business

Eureka Forbes reported a robust 15.3% year-on-year revenue growth, reaching INR 701 crores in Q1 FY27. This growth was broad-based, with the overall product business expanding by "late teens" and the water purifier category growing by "high teens" on the back of double-digit volume growth. Emerging categories like robotics and softeners also delivered strong growth, contributing to healthy market share gains across all channels including retail, direct, and e-commerce.

Profitability Moderation Amidst Growth Investments

Adjusted EBITDA margin for Q1 FY27 stood at 10.5%, a decline of 46 basis points year-on-year. This was primarily attributed to a 131 basis points moderation in gross margins, which came in at 58.4%, due to higher commodity costs and adverse currency movements. The company also made planned, deliberately higher growth investments, particularly in advertising and sales promotion (A&SP), which grew 21.4% YoY, focusing on in-store presence.

Strategic Focus on Water Purifier Innovation and Affordability

The company continues to innovate in the water purifier segment, recently becoming the first in the country to launch products with a four-year filter life, such as Glow 4X and Ritz Pro 4X. This initiative, along with segmented AMCs starting as low as INR 699 and products with two-year filter life, aims to reduce the total cost of ownership and attract new customers, thereby expanding the low-penetration category. Management noted that 70% of customers for their 2-year filter life products were first-time category entrants.

Robotics Category: A Key Growth Driver with Ambitious Targets

Robotic vacuum cleaners delivered strong growth, driven by increasing premiumization and a shift towards fully automatic cleaning products. Management highlighted the category's momentum and its transition from online to aggressive offline growth. Eureka Forbes aims to leverage its full portfolio, understanding of Indian consumer needs, vast service network, strong brand reputation, D2C capabilities, and extensive offline presence to make robotics an INR 1,000 crores business by FY30.

Service Business Navigates Price Hike Impact

Service revenue growth tracked at levels seen in recent quarters, but service bookings experienced some moderation and deferral due to price increases ranging from 3% to 12% for AMCs. To mitigate this, the company is focusing on converting out-of-warranty customers to AMC users and driving growth in its filter portfolio, which grew well in Q1. The filter business is seen as a significant opportunity, expected to grow well ahead of AMC growth.

Capital Allocation and Financial Health

Eureka Forbes ended the quarter with a healthy net cash surplus of INR 425 crores, indicating a strong balance sheet. While specific capital expenditure plans were not detailed, the company emphasized continued investment behind brands, innovations, and strengthening distribution capabilities. No specific debt figures, shareholder returns (dividends/buybacks), or M&A activities were discussed for the quarter.

FY27 Outlook and Long-Term Ambitions

For FY27, the company is confident of delivering a "clear step-up" in full-year growth and expects EBITDA margins to be "broadly in line with last year," despite Q1's slight decline. Long-term, Eureka Forbes aims for 2x revenue and 3x EBITDA growth from FY25 to FY30, driven by its core water purifier business and strong performance in emerging categories like robotics, air purifiers, and softeners.

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