Eureka Forbes FY24 Annual Report Takeaways - Delivering On Expected Lines; Maintain 'Buy': ICICI Securities

ICICI Securities Report

Eureka Forbes Ltd.’s FY24 annual report primarily highlights its transformational journey during phase-1. We note:

1. Strong investments in distribution expansion (at 36% CAGR over FY22-24) have started yielding positive results (volume growth and market share gains in FY24) and may continue to drive growth in FY24-26E.

2. The company is focusing on category creation to increase penetration via launch of affordable products to attract new customers, and higher media campaigns.

3. Cost optimisation is leading to Ebitda margin expansion (~420 bps expansion over FY22- 24), and

4. Stock option allotment has also been executed at manager level which largely comprises performance based options.

Following strong recovery in volume, market share and margin expansion in phase-1 of transformation, we believe Eureka is better placed to address issues at its service business (~36% of continuing business revenue).

We remain constructive on Eureka Forbes considering the achievements in phase1 of transformation.

We raise FY25/26E earnings by 1.9%/2.0%, respectively. Maintain Buy with DCF-based revised target price of Rs 660 (implied P/E of 69 times on FY26E EPS).

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.