Eureka Forbes: A Strong Buy with Potential 66% Upside in the Health and Hygiene Sector

India’s health and hygiene sector has seen significant growth, driven by improved access to clean water, rising urban incomes, and growing awareness of household cleanliness. One of the country’s most recognizable brands in this sector, Eureka Forbes Limited, has delivered impressive results for FY26, marking its second consecutive year of double-digit revenue growth and margin expansion.

Eureka Forbes Limited reported revenue of Rs 683.8 crore in Q4 FY26, up 11.6% year-on-year. This growth was primarily driven by double-digit gains in the water purifier segment, strong momentum in emerging categories such as robotics and air purifiers, and continued traction in the service business. For the full year FY26, revenue reached Rs 2,710.5 crore, growing 11.3% over FY25’s Rs 2,436.1 crore, marking the second consecutive year of double-digit topline expansion.

The company’s adjusted EBITDA for Q4 FY26 stood at Rs 90.2 crore, up 13.1% year-on-year, with the adjusted EBITDA margin expanding 17 basis points to 13.2%—the highest-ever quarterly margin the company has reported. For the full year, adjusted EBITDA rose 16.4% to Rs 331.9 crore, with margins improving 55 basis points to 12.2%. This marks three consecutive years of margin expansion, even as the company increased its advertising and sales promotion spends, which rose to Rs 293.7 crore in FY26 from Rs 259.5 crore in FY25.

Adjusted profit before tax for Q4 FY26 grew 8.1% year-on-year to Rs 73.5 crore. Reported PAT for the quarter stood at Rs 51.1 crore. For the full year, PAT before exceptional items grew 19.3% to Rs 190.2 crore. However, reported PAT for FY26 came in at Rs 160.2 crore, a decline of 1.9% over FY25’s Rs 163.3 crore, due to a one-time exceptional charge of Rs 40.4 crore (pre-tax) related to new Labour Codes.

Net surplus touched an all-time high of Rs 443 crore at the end of FY26, up from Rs 284 crore in FY25. Free cash flows for the year stood at Rs 237 crore, ahead of reported profits—reflecting the company’s negative working capital model. Capex for the year was Rs 84 crore, up 53% year-on-year, as the company accelerates investments in product development and service infrastructure. The company has also implemented calibrated price increases of up to 10% effective April 1, 2026, in response to input cost pressures from the West Asia crisis.

Nuvama has maintained a Buy rating with a target price of Rs 760, implying an upside of around 66%. The brokerage pointed to strong quarterly revenue growth, water purifier momentum, and accelerating service bookings as key drivers. It also noted that management expects growth in the next fiscal year to be even higher than what was recently achieved.

JM Financial also has a Buy rating with a target of Rs 660, projecting a potential upside of 45%. The brokerage noted that the earnings print was broadly in line with expectations, with double-digit growth in core products. While near-term margin pressure from input costs remains a watch point, it expects price hikes and efficiency programmes to sustain profitability and believes the current valuation is not demanding given the expected acceleration in the service business.

Eureka Forbes Limited is India’s leading health and hygiene brand with over four decades of experience. The company offers water purifiers, vacuum cleaners, and air purifiers across direct, retail, e-commerce, and institutional channels, backed by one of the most expansive service networks in India.