Dealer’s name: Eureka Forbes (Purchase)

CMP: ₹483.30

Eureka Forbes (EUREKAFO), in its first analyst meet submit the demerger, articulated its long-term development technique. It expects development to hinge on product innovation, premiumisation (higher aesthetics/ options), penetration (in all channels), discount in the price of product possession (entry value level of ₹6,499 versus ₹12,000 common value), annual upkeep companies (36 per cent of FY24 income; changing non-Eureka AMC to company-based AMC), and margin enlargement (through product combine, worth engineering, vendor negotiations, automation and value discount in IT and logistics).

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 We consider the technique spans medium-to-longer time period.

The water air purifier market in India at present has a low penetration of 6 per cent versus international gamers – China (21 per cent), Thailand (20 per cent) and South Korea (60 per cent). Likewise, the vacuum cleaner market has a really low penetration price of two per cent in India versus international gamers – China (20 per cent), Hong Kong (80 per cent) and Japan (90 per cent). Air purifiers even have a low penetration price of lower than 1 per cent.

We’re optimistic on EUREKAFO scripting a turnaround, led by continued double-digit quantity development and sharp margin uptick led by value measures. Count on an earnings CAGR of 72 per cent in FY24-26, with an ROE/ROCE of 12/9 per cent in FY25-26.