Crisil Ratings upgrades ratings of Eureka Forbes to 'AA' with 'stable' outlook
Crisil Ratings stated that the rating upgrade reflects Crisil Ratings? belief that the business risk profile of the Eureka Forbes Group will continue to strengthen over the medium term. The improvement is expected to be driven by sustained growth in the scale of operations and steady improvement in operating profitability.
Operating margins have remained stable over the past quarters (on quarter-on-quarter basis), supported by various cost-rationalisation initiatives, better operating leverage, and optimisation of the cost structure. This stability has been achieved despite the group's continued investments in brand building, advertising, and product innovation.
Revenue growth has also remained healthy, as reflected in 11% growth in fiscal 2026 and 15% growth during the first quarter of fiscal 2027. Growth has been driven by volume-led increase across key categories, improved realisations through the ongoing premiumisation of the product portfolio and the recent price increase and gradually strengthening demand across core product segments.
The business profile continues to benefit from the group's established position in the domestic consumer home appliances market, strong brand equity, extensive distribution and service network, and diversified product portfolio.
Accordingly, Crisil Ratings expects the group to achieve revenue growth of over 13-15% in fiscal 2027 while maintaining operating margins above 12%. This is expected to support an increase in net cash accruals to over Rs 290 crore in fiscal 2027 from Rs 272 (after adjusting for non-cash provisions) crore in fiscal 2026
Additionally, the financial risk profile also remains strong, supported by a comfortable capital structure, conservative financial policy, and robust debt protection metrics. Liquidity remains robust, supported by cash and cash equivalents of over Rs 443 crore and liquid investments of approximately Rs 62 crores as on 31 March 2026.
The rating continues to reflect the group?s healthy market position in the domestic health and hygiene segment, its strong distribution network, healthy financial risk profile and its efficient working capital management.
These rating strengths are partially offset by its susceptibility to fluctuations in raw material prices and intense competition in the consumer home appliances sector in India.
Eureka Forbes, along with its subsidiaries and step-down subsidiaries, is engaged in manufacturing, selling and servicing water purifiers, vacuum cleaners, air purifiers, water softeners, and filters. The group markets its products under the flagship Aquaguard and Forbes brands.
The scrip fell 2.17% to currently trade at Rs 399.75 on the BSE.
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