Eureka Forbes Q4FY25: A Clean Sweep with Growth & Margins
Let’s talk about Eureka Forbes Limited (EFL)—you know, the company that probably sold you your first water purifier. Well, they’re not just keeping homes clean anymore—they’re also keeping investors smiling with another impressive financial quarter.
In fact, Q4FY25 marks the sixth consecutive quarter of double-digit growth for EFL.
What’s Working for Eureka Forbes?
A few key highlights right off the bat:
- The adjusted EBITDA margin touched 12.9%—it’s highest ever.
- This was achieved despite a 28% increase in advertising and promotional spends.
- FY25 was marked by product growth acceleration to high teens, improvement in operating margins, and strong free cash flow generation.
- Heading into FY26, the company remains focused on product innovation and strengthening its service offerings.
- Estimated EPS growth stands at 32.6% for FY26E and 37.7% for FY27E.
- As a result, the DCF-based fair value has been revised to ₹800.
Breaking Down Q4FY25
Here’s a snapshot of how the company performed during the quarter:
| Metric | Q4FY25 Performance |
|---|---|
Consolidated Revenue | ₹613 crore (up 10.7% YoY) |
Gross Margin | 59.7% (up 40 bps YoY, 190 bps QoQ) |
EBITDA Margin (ex-ESOP) | 12.9% (up 160 bps YoY) |
Net Cash Position | ₹260 crore (vs ₹120 crore in Mar’24) |
The numbers don’t just indicate growth—they also reflect cost efficiency and financial prudence, with EFL outperforming internal estimates on revenue and margin metrics.
One Thing to Watch
There’s one area to note:
While service revenue has seen year-on-year growth, its contribution to total revenue has come down slightly in FY25.
Q4FY25 Performance Highlights
| Metric | Value | Noteworthy Context |
|---|---|---|
EBITDA Margin | 12.9% | All-time high (excluding ESOP impact) |
A&P Spend Growth | +28% | Despite this increase, margin expansion held |
The margin expansion, even with higher promotional spend, reflects effective cost management and operational efficiency.
Analyst Perspective
At the current market price of ₹595, and with the target revised to ₹800, the outlook is based on the company's recent performance and projected metrics.
The factors that support this view include:
- Continued growth in revenue
- Margin improvement
- Healthy cash reserves
- Earnings visibility backed by operational efficiency
Looking Ahead
FY26 is expected to bring more developments, particularly with new product initiatives and enhanced services taking centre stage. If projections hold, EFL could see EPS expanding by 32.6% in FY26E and 37.7% in FY27E.
Investments in securities market are subject to market risks, read all the related documents carefully before investing. This information is purely backed by KSL research analyst based on research recommendation. Kotak Securities Ltd has registration granted by SEBI, Enlistment as RA and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors. Registered Office: 27 BKC, C 27, G Block, Bandra Kurla Complex, Bandra (E), Mumbai 400051. SEBI Registration No. INZ000200137 (Member of NSE, BSE, MSE, MCX & NCDEX), Member Id: NSE-08081; BSE-673; MSE-1024; MCX-56285; NCDEX-1262. Research Analyst INH000000586; BSE Enlistment No: 5035 for compliance T&C and disclaimers, Visit https://ddei5-0-ctp.trendmicro.com:443/wis/clicktime/v1/query?url=https%3a%2f%2fbit.ly%2flongdisc&umid=818E14E7-34FE-7906-906B-8F0B1C42A394&auth=d2c41a7df2e2ef1fca42bbbefb1c825d24cf1548-36f3d1caa4f5ef82b030dac05eca909befcec775,
