Nuvama retains 'Buy' on Eureka Forbes post Q2, sees 28% upside; here's why

Nuvama has retained its 'Buy' tag on the stock, revising the target price to ₹750 per share from ₹700 per share, following a 32 per cent year-on-year jump in PAT to ₹61.6 crore in Q2FY26

Analysts at Nuvama Institutional Equities remained upbeat on health and hygiene player Eureka Forbes after the company announced its financial results for the second quarter of FY26 (Q2FY26).

 

The brokerage has retained its ‘Buy’ rating on the stock, revising the target price to ₹750 per share from ₹700 per share, following a 32 per cent year-on-year jump in Profit After Tax (PAT) to ₹61.6 crore in Q2FY26 from ₹46.7 crore in Q2FY25.

 

During the quarter, the company’s revenue from operations rose 14.9 per cent Y-o-Y to ₹773.4 crore, driven by high-teens growth in its products business. Adjusted earnings before interest, taxes, depreciation, and amortisation (Ebitda) increased 31.1 per cent Y-o-Y to ₹101.6 crore from ₹77.5 crore in Q2FY25, while the adjusted Ebitda margin expanded 162 basis points Y-o-Y to 13.1 per cent.

 

 

While calling the Q2FY26 results robust, Nuvama highlighted that Eureka expects to sustain strong growth momentum through strategic initiatives focused on premiumisation, channel expansion, and strengthening its core water and cleaning product portfolio.

 

Following the Q2 beat, Nuvama has revised its FY26E/FY27E EPS estimates upward by 4 per cent and 1 per cent, respectively. The Dec-26E target price is now ₹750, based on 42x Dec-27E EPS (up from ₹700 earlier). At the current market price, the stock trades at 40x FY27E EPS, offering a potential upside of 28 per cent. “This implies over 20 per cent compounding over three–four years. Key risk: irrational competitive intensity,” the brokerage said in its report.

 

Eureka’s service transformation is well underway, according to Nuvama, with high-teens growth in both AMC bookings and filter replacements. The company is leveraging its large installed base outside AMC, driving monetisation through filters and expanding the service ecosystem. “Customer satisfaction scores are at all-time highs. Digital and operational enhancements, including improved spares availability and optimised technician allocation, are driving faster issue resolution,” the brokerage added.

 

Innovations such as two-year filter life products, Nuvama believes, are broadening category adoption, while the company remains ready to explore rental or subscription models if required. Overall, services are evolving into a significant growth lever, complementing the product business.