Shares of Eureka Forbes gained as much as 2.2% to their day’s high of Rs 592 on the NSE on Wednesday, September 17, after Nuvama Institutional Equities initiated coverage with a ‘Buy’ rating and set a twelve-month price target of Rs 700, indicating more than 20% upside from the last close of Rs 579.15 on the BSE.

In its report dated September 16, the domestic brokerage described the company as an “outperformer” within the consumer durables sector, citing its dominant market share, strong innovation pipeline and expanding after-sales network.

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Eureka Forbes is India’s largest electric water purifier company with a 40–45% share of the organised market and also leads in vacuum cleaners with a 60–70% share. Nuvama noted that penetration of electric water purifiers in India remains low at about 6% compared to China and other Asian peers, but urbanisation, greater piped water access and rising health awareness are expected to drive double-digit industry growth.After-sales service contributed 33% of FY25 revenue and delivered higher margins than product sales. The company operates with more than 8,000 technicians across 19,500 pin codes and has strengthened its digital platforms, with over 70% of service bookings now routed via its mobile app compared to 7% two years ago.

Nuvama projects a 14% revenue CAGR for Eureka Forbes through FY28, alongside a 31% CAGR in adjusted profit per share led by margin expansion and operating leverage. EBITDA margins are forecast to rise to 13.8% by FY28, while free cash flow as a share of revenue is expected to reach 9%, well above the sector median. The brokerage also highlighted the company’s debt-free balance sheet and rising liquidity, with net cash seen increasing from Rs 310 crore in FY25 to Rs 1,260 crore by FY28.

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Eureka Forbes has doubled its R&D strength and tripled capex in FY25, launching over 30 new products, including IoT-enabled purifiers and robotic devices. Its omni-channel distribution strategy spans direct sales, retail, ecommerce and B2B channels.Nuvama’s Rs 700 target price is based on a 42x Sep-27E EPS multiple, which translates to a PEG ratio of 1.3 times, below the sector median of 1.9 times. Risks flagged by the brokerage include slower-than-expected scale-up in after-sales services, aggressive competitive activity that could pressure margins, and fake low quality products.

Eureka Forbes shares have risen just 11% in the last 1 year.

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