Eureka Forbes

Eureka Forbes delivered a strong financial performance in FY25, with revenue for its continuing business growing 12% to ₹2,436.1 crores, a significant acceleration from 7.9% in FY24. This growth was broad-based and underpinned by a high-teens increase in the product portfolio. The company achieved an Adjusted EBITDA margin of 11.7% for FY25, an expansion of 136 basis points over FY24, and a Q4 Adjusted EBITDA margin of 13%, up 183 basis points YoY. This margin improvement was driven by operating leverage and a structured cost optimization program, despite a 25% increase in advertising and promotion expenses.

Innovation remained a key growth driver, with Eureka Forbes launching over 30 new products across water, cleaning, and air segments in FY25. These launches included several industry-first products and contributed to the high-teens growth in the product business. The company is strategically focusing on its cleaning portfolio, particularly robotics, which has seen 100% YoY growth for the past three years and is projected to continue growing at 75-110% in the coming years. The aim is to expand robotics' reach from online to offline channels, leveraging the company's strong distribution network.

While the service business had previously trailed product growth, management reported 'green shoots' in FY25, with volumes expanding on unit AMC sales. Interventions such as tiered AMC offerings, D2C investments, and digitalization have improved service quality metrics to lifetime highs. A new technician app, launched approximately three months prior, ensures that pending complaints are resolved before new calls are attended, demonstrating a commitment to improving customer experience and driving service revenue growth.

Eureka Forbes maintains a clear strategic bias towards sustained profitable growth, capitalizing on low category penetration and increasing consumer awareness of health and hygiene. A key focus is on reducing the total cost of ownership for water purifiers to drive penetration and market size expansion. New products like Aura 2x and Aquaguard Enhance NXT, offering a 2-year filter life, are examples of initiatives aimed at making products more affordable and attractive to non-users.

The company is actively working on institutionalizing cost management programs, including addressing legacy IT costs and optimizing COGS. Management acknowledges a competitive landscape with heightened activity from new brands and global players but views this as beneficial for overall category growth. Eureka Forbes believes its comprehensive product portfolio, spanning all price segments, positions it strongly to maintain market leadership and benefit from the growing market.

Advertising and promotion (A&SP) expenses increased by 25% YoY, representing a 121 basis point higher investment in FY25. The company plans to sustain these elevated investment levels to create greater brand awareness and drive category growth, particularly for its cleaning portfolio. The recent signing of Shraddha Kapoor as a brand ambassador for vacuum cleaners aims to further boost visibility and salience, especially for robotics, aligning with the strategy to grow the overall business.