Eureka Forbes Limited - Q1 FY27 Earnings Call Summary Thursday, August 13, 2026, 2:00 PM IST
Event Participants
Executives
2 Gaurav Khandelwal, Pratik Pota
Analysts
8 Achal Lohade, Anjali Mohta, Keshav Lahoti, Mayur Parkeria, Sameer Gupta, Siddhartha Bera, Umang Mehta, Vikram Kotak
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue | ₹701 crores | +15.3% YoY; broad-based growth led by water purifiers (high teens) with double-digit volume growth |
| Product business growth | High teens YoY | Water purifiers volume-led; robotics driven by premiumization mix; softeners volume-led |
| Gross margin | 58.4% | -131 bps YoY; commodity cost inflation and adverse currency movements, partially offset by COGS savings and product mix |
| Employee cost | ₹90 crores | +10.7% YoY; normal annual increments; productivity-led efficiencies expected to kick in over time |
| Service charges | ₹83 crores | +2.7% YoY; softer service bookings growth due to AMC price hike deferrals; ongoing leakage curbs |
| Other expenses (incl. ANSP) | ₹162 crores | +21.4% YoY; higher advertising/sales promotion, largely focused in-store investments in modern retail |
| ESOP charges | ₹6.6 crores | +16.2% YoY; fresh employee grants and expanded ESOP coverage |
| Adjusted EBITDA | ₹74 crores (10.5% margin) | EBITDA +10.5% YoY; margin -46 bps YoY on gross margin drag and higher growth investments, partially offset by operating leverage |
| Adjusted PBT | ₹61 crores | Q1 FY27; includes one-time gratuity reversal of ₹19.5 crores |
| Reported PAT | ₹55 crores | +44% YoY; includes one-time gain of ₹19.5 crores on gratuity reversal |
| Adjusted PAT (ex one-off) | ₹41 crores | +6.1% YoY, excluding the one-time gratuity reversal |
| Net cash surplus | ₹425 crores | Strong balance sheet; selective investments in long-term growth areas |
Geographic & Segment Commentary
Water Purifiers: High-teens revenue growth on double-digit volume growth, ahead of category with healthy market share gains. Growth driven by economy range momentum, expanded stainless steel portfolio, and premium offerings in hot water, UTC, and IoT-connected purifiers.
Robotics: Strong growth driven by increasing premiumization and shift toward fully automatic cleaning; the top-end automatic cleaning station launched last year did exceptionally well. New campaign featuring Shraddha Kapoor launched to accelerate category adoption and strengthen leadership.
Water Softeners & Emerging Categories: Strong double-digit growth across all emerging categories; softeners specifically delivered volume-led growth, reflecting growing category relevance and potential.
Service Business: Revenue growth in line with recent quarters (similar to Q4 FY26); AMC bookings moderated after 3-12% price increase as customers deferred renewals; filter portfolio grew well with continued awareness investments.
Distribution & Channels: Retail, direct, and e-commerce all delivered strong double-digit growth; in-store visibility and promoter presence increased significantly in modern trade.
Company-Specific & Strategic Commentary
FY30 Ambition: Management reaffirmed the north-star target of 2x revenue and 3x EBITDA from FY25 to FY30 (revenue CAGR of 17-18%, reaching ₹5,400-5,600 crores), with Q1 FY27 performance building confidence in delivering this ambition.
Product Innovation – Filter Life Leadership: Launched India's first 4-year filter life water purifiers (Glow 4X and Ritz Pro 4X, stainless steel, priced ~₹22,000-₹25,000) on e-commerce 45 days before peers followed. Earlier 2-year filter life range drove ~70% first-time category entrants.
Filter Portfolio Revamp: Simplified the filter range from 65 SKUs to 5 universal filter kits, created a new open distribution ecosystem for filters/spares, and ran the "Stop, Check, Relax" digital campaign; encouraging early signs of traction.
D2C Platform Development: Leveraging India's oldest physical D2C franchise with 40 years of in-home access, 50 million customer first-party data, and 2.5 million monthly active users; cross-category ownership is currently below 1%, representing the key monetization runway.
Robotics Strategic Playbook: Full-stack portfolio spanning ₹15,000-₹1 lakh, India-specific feature curation, 19,500 PIN-code service network, D2C cross-sell, feet-on-street demos, and offline distribution moat; targeting ₹1,000 crore revenue by FY30.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| EBITDA margin (FY27) | Broadly in line with last year | Q1 always carries higher upfront ANSP; cost workstreams across COGS and OpEx, operating leverage from stepped-up growth; all-time reference: Q1 FY26 -50 bps YoY ended FY26 with +55 bps expansion |
| Revenue growth (FY27) | Clear step-up vs FY26 | Strong Q1 start with momentum across all categories; water purifier category growing high teens; management confident given plans lined up |
| ESOP expense (FY27) | ₹25-26 crores | Driven by fresh grants and expanded ESOP coverage |
| ANSP spends (FY27) | Ahead of revenue growth | Focused on in-store presence (availability, visibility, promoters) and consumer finance adoption to convert at point of sale |
| Service revenue growth (Q2 FY27) | Similar to Q1 levels | Supported by deferred liability balance (annuity stream into FY27); dependent on AMC bookings normalization and filter business scale-up; softness could play out later in the year |
| FY30 ambition | 2x revenue, 3x EBITDA (FY25-FY30) | Revenue CAGR of 17-18%; product categories growing ahead of average; filter business expected to grow ahead of AMC within the service mix |
Risks & Constraints
| Risk | Context |
|---|---|
| Commodity & currency cost inflation | Input costs remain elevated with no meaningful near-term reduction seen; gross margin fell 131 bps YoY in Q1; ongoing West Asia geopolitical crisis and currency volatility continue to pressure costs; management is pursuing COGS savings programs and measured price hikes |
| AMC price increase impacting service bookings | 3-12% price hike led to renewal deferrals; if bookings don't normalize, could dampen service revenue growth in 2H FY27; management expects deferral impact to mitigate over time, with filter business acting as compensating growth driver |
| Competitive intensity in categories | New players entering water and robotics categories; management's stance is to protect growth momentum by avoiding aggressive price hikes, accepting short-term gross margin pressure to drive market share gains |
| FY27 margin delivery dependency | Margin guidance assumes cost workstreams and operating leverage materialize; if commodity costs don't correct and AMC booking softness persists, holding margins in line with last year becomes more challenging |
Q&A Highlights
Service Business: Growth Drivers & Pricing Impact
- Question: Service growth appears flattish — when should pickup materialize, and what was the AMC price increase quantum? (Siddhartha Bera, Nomura)
- Answer: AMC price increase band was 3-12% (single-year vs multi-year AMCs); some deferral and postponement of renewals observed, expected to normalize over time. Targeted interventions include renewal-focused outreach, out-of-warranty conversion workflows, and filter portfolio expansion with new distribution. (Pratik Pota)
- Answer: Service revenue growth was similar to Q4, not flat; deferred liability balance (annuity stream) starts contributing to revenue in FY27, providing forward visibility. (Gaurav Khandelwal)
Growth Composition (Volume vs Price)
- Question: Of the 15.3% revenue growth, how much is pricing vs volume? (Keshav Lahoti, HDFC Securities)
- Answer: Water purifier growth was volume-led (double-digit volume growth with some price impact); cleaning portfolio (robotics) was driven by premiumization and mix shift toward the top-end automatic cleaning station; softeners were volume-led. (Pratik Pota)
Pricing Strategy & Margin Management
Question: Any further price hikes planned given elevated costs? (Siddhartha Bera, Nomura)
Answer: Management is being calibrated and measured; absolute cost increase has been covered (though not fully in percentage terms); bias is toward not disturbing strong demand momentum. Portfolio spread across price points and business mix helps manage gross margins. (Gaurav Khandelwal)
Question: How to hold EBITDA margins in line with last year despite ANSP ahead of revenue growth and no further price hikes? (Sameer Gupta, IIFL)
Answer: Q1 always carries more than usual ANSP spend — a conscious upfronting decision; cost workstreams across COGS and OpEx plus operating leverage from higher growth should offset; reference point: Q1 FY26 margins were down 50 bps YoY but FY26 ended with ~55 bps expansion. If commodity costs correct, savings will be passed on to consumers to drive growth and share. (Gaurav Khandelwal); (Pratik Pota)
Product Innovation: 4-Year Filter Life & Competitive Response
Question: How does the 4-year filter life launch compare to peers, and what is the strategy on TCO reduction? (Umang Mehta, Kotak Securities)
Answer: Eureka Forbes was first in India to launch 4-year filter life purifiers (Glow 4X and Ritz Pro 4X, stainless steel, ~₹22,000-₹25,000) ~45 days ago, with competitors following recently. Previous initiatives include ₹699 tiered AMCs and 2-year filter life range, of which ~70% of buyers were first-time category entrants. (Pratik Pota)
Question: Rationale for AMC price hikes when pricing is a known category barrier? (Umang Mehta, Kotak Securities)
Answer: Pricing had been held for a long time despite inflation in fuel and labor; increase was calibrated with analytics on price-sensitive segments. Unlike products, AMC price increases caused booking deferrals, but management expects normalization. Filter business (65→5 universal kits) is showing encouraging traction. (Pratik Pota)
Robotics: Category Outlook & Competitive Playbook
- Question: How will the robotics category evolve over 3 years, and what is Eureka's USP against new entrants? (Vikram Kotak, Ace Lansdowne)
- Answer: Robotics is analogous to washing machines 30 years ago, replacing manual labor; category has moved from online-only to offline expansion in modern and traditional trade. Eureka's right to win: full portfolio spanning ₹15,000-₹1 lakh, India-specific features (corner cleaning, under-sofa, dust efficacy), 19,500 PIN-code service network, brand equity, 50-million customer D2C database, feet-on-street demos, and offline distribution as a moat against online-only newcomers. FY30 target: ₹1,000 crore revenue. (Pratik Pota)
FY30 Ambition: Mix & Margin Trajectory
- Question: In the FY30 2x revenue ambition, will product revenue CAGR outpace service, and is the annual 50 bps margin expansion paused? (Mayur Parkeria, Wealth Managers India)
- Answer: Emerging product categories (robotics, air purifiers, softeners) will grow ahead of the company average; service is not just AMC — filter business (large TAM, low penetration, low share) will grow ahead of AMC. On margins: this is an unusually challenging year (commodity, forex, geopolitics); holding margins in line with last year is a good outcome, with the opportunity to make up the expansion next year. (Pratik Pota); (Gaurav Khandelwal)
Market Share & Competitive Defense
Question: Were market share gains organic or aided by competitor supply disruptions from the West Asia crisis? (Sameer Gupta, IIFL)
Answer: There were no supply constraints from any competitor; gains were driven by strong consumer propositions, enhanced point-of-sale investments (promoters, visibility), and disciplined execution in a competitive playing field. (Pratik Pota)
Question: How will Eureka defend share against new entrants, especially given rising total cost of ownership? (Anjali Mohta, Mirania Family Office)
Answer: New competitors help grow the low-penetration category; Eureka's two strategic directions: penetration (affordable AquaGuard Sure, 2-year and 4-year filter life products) and premiumization (India's first hot-water purifier, hot/cold/ambient purifier, largest IoT-connected range, under-counter products). Category growth has accelerated from FY24 onward; FY30 ambition translates to 17-18% CAGR from the FY25 base of ~₹5,400-5,600 crores. (Pratik Pota)
D2C Platform Development
- Question: Where are we in the D2C journey toward FY30? (Vikram Kotak, Ace Lansdowne)
- Answer: Eureka is India's oldest D2C company in a physical sense — 40 years of in-home access through direct sales and post-sales service, with first-party data on 50 million customers; digital platform has ~2.5 million monthly active users (organic). Cross-category ownership is under 1%, representing a significant monetization runway; D2C engine delivered strong growth in Q1, with specific initiatives planned for the balance of the year. (Pratik Pota)
Key Takeaway
Eureka Forbes delivered a strong Q1 FY27 with revenue of ₹701 crores, up 15.3% YoY, driven by high-teens product growth led by water purifiers (double-digit volumes) and emerging categories — robotics and softeners. Adjusted EBITDA margin declined 46 bps to 10.5%, reflecting 131 bps gross margin compression from commodity/forex costs and higher in-store ANSP investments, partially offset by operating leverage; reported PAT grew 44% to ₹55 crores (ex one-off gratuity reversal of ₹19.5 crores, +6.1% to ₹41 crores). Management reaffirmed FY30 targets of 2x revenue (17-18% CAGR) and 3x EBITDA, with FY27 EBITDA margins guided broadly in line with last year and a clear step-up in full-year growth. Key watch points: AMC price hikes (3-12%) caused renewal deferrals that could pressure service growth in 2H FY27, while the filter portfolio revamp (65→5 universal kits), first-mover 4-year filter life launches, and the D2C engine (2.5M MAU, 50M customer database) remain central to the growth strategy — with robotics targeted at ₹1,000 crore revenue by FY30.