Eureka Forbes (543482) Q2 24/25 earnings summary

Executive summary

• Achieved fourth consecutive quarter of double-digit revenue growth, with Q2 FY25 revenue up 13.6% year-on-year to INR 672.9 crores and 21.7% sequentially; excluding discontinued operations, revenue grew 14.7%.

• Product business grew over 20% year-on-year, led by innovations in water purifiers and vacuum cleaners, supported by increased marketing and an earlier festive season.

• Strategic focus on innovation, premiumization, and increased advertising spend led to robust consumer response and market share gains.

• Service transformation initiatives expanded the AMC base and improved customer experience metrics.

• Consolidated revenue from operations for Q2 FY25 was ₹67,314 lakhs, up from ₹59,145 lakhs in Q2 FY24.

Financial highlights

• Adjusted EBITDA margin rose to 11.5%, up 106 basis points year-on-year, despite a 40% increase in advertising and sales promotion spend.

• Profit after tax surged 83% year-on-year to INR 46.7 crores.

• Product business grew over 30%, with both electric water purifiers and vacuum cleaners contributing.

• Gross margin for Q2 was 66.3%, down 111 basis points year-on-year due to buyback offers and channel mix.

• H1 FY25 revenue: ₹1,225.7Cr (up 11.7% YoY); adjusted EBITDA: ₹140.9Cr (up 26.3% YoY); PAT: ₹77.7Cr (up 63.4% YoY).

Outlook and guidance

• Confident in sustaining strong, profitable growth through continued focus on product innovation and service transformation.

• Plans to maintain elevated growth investments, especially in advertising and trade promotions.

• Expectation of margin normalization in H2 as festive-related receivables unwind and product-service mix rebalances.

• Board has approved voluntary liquidation of two Dubai-based subsidiaries, subject to regulatory approvals.