Target: ₹830
CMP: ₹607.45
We are initiating coverage of Eureka Forbes Ltd with a Buy rating and a target price of ₹830 per share, valuing the stock at 45x Mar-28E AEPS (excluding intangible amortisation and 50 per cent of performance-linked ESOP costs).
Post its acquisition by Advent International in 2022, Eureka has undergone a major turnaround under the new management, rebounding from a decade of muted growth. The product business CAGR has seen high teens in recent quarters, and the services segment is gaining momentum, as bookings have grown from double digits
in Q1FY26 to high teens in Q2FY26. We remain positive on Eureka’s growth prospects, owing to its high brand equity, capable management team, and asset-light business mode.
We expect Eureka to achieve revenue/EBITDA/APAT CAGRs of 14/23/27 per cent respectively, over FY25–28E, led by sustained momentum in water purifiers, recovery in the service business, and strong traction in vacuum cleaners. Given these, Eureka Forbes is our top pick within the consumer durables sector.
Key risks are intense competition, possible promoter stake sale, potential changes in the promoter could impact on the company’s growth trajectory, loss of key managerial personnel, industry slowdown and service business revival.