How Eureka Forbes Conquered the Water Purifier Market in India and Became a Stock Market Darling

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How Eureka Forbes Built a Strong Brand, a Diverse Product Portfolio and a Loyal Customer Base in the Water Purifier Market and Boosted its Stock Price

Eureka Forbes is one of the leading companies in the consumer durables sector in India, with a focus on health and hygiene products such as air and water purifiers, vacuum cleaners and air conditioners. The company was founded in 1982 and is a subsidiary of Forbes & Company, which is owned by the Shapoorji Pallonji group. Eureka Forbes has a strong brand reputation, distribution network and sales channel, which gives it an edge over its competitors in the water purifier market. In this blog post, we will analyse how Eureka Forbes has maintained its market leadership, its stock performance and its future prospects.

Eureka Forbes’s market share and product portfolio

According to a report by TechSci Research, Eureka Forbes was the market leader in the reverse osmosis (RO) water purifier segment in India in 2013, with a market share of about 25%, overtaking Kent RO, which had a market share of about 23%. The RO water purifier market in India was estimated to be around ₹6,000 crore in 2013, of which ₹4,500 crore was cornered by organised players. Eureka Forbes and Kent RO together accounted for about 50% of the organised market share.

Eureka Forbes also has a dominant position in the ultraviolet (UV) water purifier segment, with a market share of more than 70%, according to a report by Business Today. The company offers a wide range of water purifiers under its brands Aquaguard, Aquasure and Dr. Aquaguard, catering to different customer segments and price points. The company has over 50 SKUs (stock keeping units) in its product portfolio, which covers various technologies such as RO, UV, gravity-based and hybrid systems. The company also provides after-sales service and maintenance for its products through its network of over 18,000 dealers and service centres across India.

Eureka Forbes’s stock performance and valuation

Eureka Forbes is currently undergoing a process of demerger from its parent company Forbes & Company, which is listed on the Bombay Stock Exchange (BSE) with the code 543482. The demerger is expected to unlock value for the shareholders of both the companies, as Eureka Forbes will become an independent entity with a focused business strategy. The demerger is also seen as a precursor to a possible sale or listing of Eureka Forbes, as the Shapoorji Pallonji group is looking to reduce its debt burden by monetising some of its assets.

According to sources, Eureka Forbes has attracted interest from several global private equity firms and strategic buyers, such as Electrolux, Advent International and Warburg Pincus. The company is reportedly seeking a valuation of around ₹6,000-₹7,000 crore, which implies a multiple of 2.5x-3x of its annual revenue. In FY21, Eureka Forbes reported a revenue of ₹2,857 crore and a net loss of ₹27.86 crore. The company’s revenue grew by 14.3% year-on-year, while its net loss narrowed from ₹44.25 crore in FY20.

Eureka Forbes’s future prospects and challenges

Eureka Forbes has a strong brand recall and customer loyalty in the water purifier market in India, which gives it an advantage over its competitors. The company also has a diversified product portfolio that caters to different customer needs and preferences. The company is investing in research and development to introduce new products and technologies that can enhance its value proposition and differentiation. For instance, the company recently launched the E10S robotic vacuum cleaner with a bagless multi-cyclonic station, which claims to offer superior suction power and dust collection efficiency.

However, Eureka Forbes also faces some challenges in maintaining its market leadership and profitability. The water purifier market in India is highly competitive and fragmented, with many players offering similar products at lower prices. The company also faces regulatory uncertainties regarding the quality standards and environmental impact of water purifiers. Moreover, the company has to deal with the impact of the Covid-19 pandemic on its sales and operations, as well as the rising raw material costs and supply chain disruptions.

Eureka Forbes has to adopt a proactive and innovative approach to overcome these challenges and leverage its strengths. The company has to focus on improving its operational efficiency, cost optimisation and customer retention. The company also has to explore new growth opportunities in emerging markets and segments, such as rural areas, online channels and smart home appliances. The company has to create a strong digital presence and engage with its customers through social media and e-commerce platforms. The company has to also strengthen its corporate governance and transparency to attract potential investors and partners.

Eureka Forbes is a dominant force in the water purifier market in India, with a strong brand equity, distribution network and product portfolio. The company has the potential to grow further and create value for its stakeholders, if it can overcome the challenges and leverage the opportunities in the market. Eureka Forbes is a company that is committed to providing health and hygiene solutions to its customers, and making a positive difference to their lives.

Conclusion

Eureka Forbes is a dominant force in the water purifier market in India, with a strong brand equity, distribution network and product portfolio. The company has the potential to grow further and create value for its stakeholders, if it can overcome the challenges and leverage the opportunities in the market. Eureka Forbes is a company that is committed to providing health and hygiene solutions to its customers, and making a positive difference to their lives.

Water Purifier, Eureka Forbes, Stock Performance, Consumer Durables, Market Leadership, Product Innovation, Health and Hygiene, Brand Equity, Customer Loyalty, Reverse Osmosis, Ultraviolet, Gravity-Based, Demerger, Valuation, Sale or Listing

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