Eureka Forbes reports 78% PAT growth in FY25 as operating leverage, product innovation drive transformation

What Drove Eureka Forbes’ 78% PAT Growth in FY25?

Eureka Forbes Limited, one of India‘s foremost health and hygiene companies, reported a 78.4% year-on-year surge in Profit After Tax (PAT) for FY25, reaching ₹163.3 crore. This comes on the back of the company’s ongoing transformation efforts, which have now yielded two consecutive years of sharply improving growth and margin trajectories. For the fourth quarter (Q4 FY25) alone, PAT more than doubled, jumping 137.5% YoY to ₹50.8 crore, marking the sixth straight quarter of double-digit topline growth and the highest profitability margin in the company’s history.

The company posted standalone revenue from operations of ₹2,436.1 crore for the full year, up 11.3% over FY24. Continuing businesses grew even faster, clocking 12% YoY growth, compared to 7.9% in FY24 and just 2.2% in FY23. This consistent acceleration reflects the broad impact of restructuring and innovation-led expansion across its core product verticals—mainly water purifiers, vacuum cleaners, and air purification systems.

How Did Margins and Profitability Improve Across FY25?

Eureka Forbes achieved a notable margin expansion during FY25, with adjusted EBITDA climbing 25.9% YoY to ₹285 crore and EBITDA margins increasing by 136 basis points to 11.7%. The company’s consistent improvement in operational efficiency is evident when compared to its EBITDA margin of just 6.3% in FY23.

The margin improvement was achieved despite a 25.5% YoY increase in advertising and sales promotion (A&SP) expenses to ₹259.5 crore, demonstrating effective cost control and scale benefits. Adjusted Profit Before Tax (PBT), excluding exceptional items and ESOP charges, rose 37.1% YoY to ₹235.9 crore. On a post-exceptional basis, PBT surged to ₹218.9 crore, nearly doubling from ₹122.4 crore in FY24.

What Factors Contributed to Eureka Forbes’ Strong Q4 FY25 Performance?

The January–March 2025 quarter was pivotal for Eureka Forbes, as the company posted ₹612.5 crore in standalone revenue, up 10.8% YoY. Continuing business revenue, excluding discontinued verticals like safety devices and semi-finished goods, grew 10.9%. Adjusted EBITDA for Q4 FY25 rose 28.8% YoY to ₹79.7 crore, with margins hitting an all-time high of 13.0%, a 183-basis-point expansion.

Profit After Tax for the quarter surged 137.5% YoY, from ₹21.4 crore in Q4 FY24 to ₹50.8 crore. Adjacent performance indicators also showed significant progress: ESOP charges were down by over 77%, finance costs declined 32.8%, and other income more than doubled.

CEO Pratik Pota emphasized that the gains were a direct result of strategic transformation efforts that prioritized product innovation, operational efficiency, and investments in long-term capabilities. He highlighted the company’s success in sustaining growth in the high teens within the products business and reaffirmed the strategy of using cost optimization to fund expansion and innovation.

How Is Eureka Forbes Positioning for Future Growth?

Looking ahead, Eureka Forbes is focused on increasing revenue from services, which are expected to become a major driver given industry trends and the company’s pan-India service network. Mr. Pota noted “green shoots” in the service business, suggesting that monetization of this vertical could supplement product-based revenue streams in the near term.

The company is also expected to further intensify its innovation and A&SP investments. In FY25, Eureka Forbes onboarded actress Shraddha Kapoor as the brand ambassador for its robotic vacuum cleaner segment, signaling continued investment in brand positioning and consumer engagement.

In terms of capital allocation, the company generated ₹214 crore in free cash flows—representing 131% of PAT—despite incurring capital expenditures of ₹55 crore. Return on Capital Employed (ROCE) came in at a staggering 353%, driven by structural business advantages such as a negative working capital cycle, low capex intensity, and minimal debt.

What Do Sector Trends and Macro Tailwinds Suggest?

Industry dynamics remain favorable. India’s water purifier and vacuum cleaner markets are expected to grow at 13% and 17% CAGR respectively through FY30. Piped water coverage, increasing urbanization, rising female workforce participation, and greater health consciousness post-pandemic are creating tailwinds for product penetration.

The water purifier services market alone is forecast to triple to ₹9,000 crore by FY30, creating a fertile landscape for recurring service-based revenue. Similarly, vacuum cleaner penetration in India remains abysmally low at 2%, compared to 20% in China and 90% in Japan—leaving ample room for growth. Rising air pollution levels are also driving demand for air purifiers, expected to grow at an 18% CAGR till FY30.

Eureka Forbes, as a market leader in water and air purification as well as vacuum cleaners, is well-positioned to benefit from these trends through its diverse omni-channel presence, direct sales expertise, and one of India’s most extensive service networks.

What Does Investor Sentiment Indicate?

Investor confidence in Eureka Forbes has been bolstered by its consistent delivery on growth and profitability targets. With PAT expanding nearly tenfold over two years and margins touching new highs, the stock has become increasingly attractive among institutional players. As of the last reporting period, the company had minimal leverage on its balance sheet, offering further flexibility for growth initiatives.

The stock’s trajectory is now likely to hinge on its ability to convert service-related “green shoots” into meaningful revenue and expand beyond Tier 1 markets into under-penetrated rural and semi-urban geographies. Analysts may also watch closely for the company’s future guidance on capex, new product launches, and margin outlook amid rising competitive intensity in the consumer durables space.

Strategic Outlook and Sentiment Analysis

Eureka Forbes has delivered one of the most well-rounded earnings performances in the consumer durables segment for FY25. Its 78% jump in PAT, despite a notable rise in marketing expenses, indicates a potent combination of brand strength, product-market fit, and operational discipline. The management’s tone remains cautiously optimistic, balancing confidence in recent transformation outcomes with a focus on deeper service integration and continued innovation.

From a sentiment perspective, the company now appears firmly in the “hold to accumulate” zone for long-term investors, with valuation upside dependent on execution of its service-led strategy and preservation of recent margin gains. Domestic institutional interest remains strong, while Foreign Institutional Investors (FIIs) are likely to seek clarity on export strategies and regional diversification before aggressively scaling positions.

The sustained profitability, lean working capital, strong ROCE, and high free cash flow generation give Eureka Forbes significant leeway to navigate sectoral volatility and maintain a leadership stance in a highly competitive market.