Revenue momentum lifted operating margin to 12.94% in Q2FY27
Sequential revenue growth of +26.85% outpaced expense growth of +22.58%, while management cited commodity costs as a gross-margin drag.
Filed 02 Nov 2026, 13:32 IST · Eureka Forbes Ltd (EUREKAFORB)
Key takeaways
- Revenue grew +26.85% sequentially, ahead of expense growth of +22.58%, lifting operating margin by 3.03 percentage points to 12.94%.
- Net profit rose +30.02% sequentially even as other income fell -76.54%; other income still contributed 6.39% of pre-tax profit.
- Management said EBITDA margin reached a lifetime high of 13.6% despite inflationary pressure, while commodity costs reduced gross margin by 138 basis points year on year.
Price around the results
Products drove the sequential acceleration
Consolidated revenue rose +26.85% sequentially to Rs 888.47 cr, with revenue growth outpacing expenses and operating profit rising +65.72%. Management said the Products Business grew in the high teens year on year across categories, while service revenue remained broadly in line with recent quarters and filter growth accelerated. The presentation also said Water Purifiers delivered high-teens growth and market-share gains.
Margin expansion came despite commodity inflation
Expenses grew +22.58%, slower than revenue, which expanded operating margin by 3.03 percentage points from Q1FY27. Management said significant inflationary pressure persisted, and the presentation attributed a 138-basis-point year-on-year decline in gross margin to higher commodity costs. It nevertheless said EBITDA margin reached a lifetime high of 13.6%.
Lower other income did not prevent profit growth
Pre-tax profit rose +29.37% sequentially and net profit increased +30.02%, helped by the operating improvement rather than non-operating income: other income fell -76.54% and represented 6.39% of pre-tax profit. The tax rate declined by 0.38 percentage points to 25.24%, providing a modest additional lift to net profit. Interest expense increased +92.66% and depreciation rose +7.61%.
Margin was just above the sector median
Eureka Forbes' 12.94% operating margin was 0.20 percentage points above the 12.74% median for the 153 Consumer Discretionary peers that had reported the quarter. The sequential improvement from 9.91% in Q1FY27 is clear, but the available trend covers only one prior quarter and does not establish a longer margin direction.
Management is adding categories and new products
Management said it expects a meaningful step-up in growth in FY27 and increasing confidence in sustaining a higher growth trajectory over the medium term. The presentation said the company is investing in category creation for water softeners and air purifiers, and described its transformation strategy as becoming a D2C health and hygiene technology leader. It also said three new robotics SKUs were launched during the festive season.
Q2FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q2FY27 | Q1FY27 | QoQ |
|---|---|---|---|
| Revenue | ₹888 cr | ₹700 cr | +26.85% |
| Other income | ₹6 cr | ₹27 cr | -76.54% |
| Expenses | ₹773 cr | ₹631 cr | +22.58% |
| Operating profit | ₹115 cr | ₹69 cr | +65.72% |
| Operating margin (%) | 12.94% | 9.91% | — |
| Interest | ₹2 cr | ₹1 cr | +92.66% |
| Depreciation | ₹20 cr | ₹19 cr | +7.61% |
| Profit before tax | ₹99 cr | ₹77 cr | +29.37% |
| Tax | ₹25 cr | ₹20 cr | +27.46% |
| Net profit | ₹74 cr | ₹57 cr | +30.02% |
| EPS (₹) | ₹3.81 | ₹2.93 | +30.03% |
Operating margin of 12.94% compares with a Consumer Discretionary sector median of 12.74% across 153 peers that have reported Q2FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- The Products Business grew in the high teens year on year across categories.
- Service revenue remained broadly in line with recent quarters, while filter business growth accelerated.
Guidance & outlook
- Management expects a meaningful step-up in growth in FY27.
- Management expects to sustain a higher growth trajectory over the medium term.
- The company remains focused on delivering sustainable profitable growth over the long term.
Expansion
- The company is investing in category creation for water softeners and air purifiers.
New products
- The company launched three new robotics SKUs during the festive season.
New initiatives
- EFL's transformation strategy is to become a D2C health and hygiene technology leader.
Competition
- Water Purifiers delivered high-teens growth and strong market share gains.
Problems & risks
- The company faced significant inflationary pressures during the quarter.
- Gross margin declined primarily because of a significant increase in commodity costs.
What to watch
- Whether operating margin holds above 12.94% after rising 3.03 percentage points sequentially.
- Whether revenue growth remains ahead of expense growth, following +26.85% versus +22.58% in Q2FY27.
- Whether other income remains a limited profit contributor after accounting for 6.39% of pre-tax profit this quarter.