Good afternoon, and I welcome you all to the Q1 FY '27 earnings call of Eureka Forbes Limited. The operating landscape in quarter one continued to be impacted by inflationary pressures and currency volatility and associated uncertainty.

Against this backdrop, I'm pleased to share that we delivered a solid start to FY '27. Revenue for the quarter grew by 15.3% year-on-year to ₹701 crore, supported by accelerated and broad-based growth across our product business, especially water.

The water purifier category grew by high teens on the back of a double-digit volume growth. Emerging categories also delivered strong growth, especially on robotics and softeners.

Overall, our product business grew by late teens, and this growth was also broad-based across channels, with retail, direct, and e-commerce all delivering strong double-digit growth. In water purifiers, our growth was driven by strong momentum in the economy range, by an expanded range of stainless steel products, and also by our premium offerings in hot and UTC and IoT.

Our growth was well ahead of the category, leading to healthy market share gains across the board. Our emerging categories continued to perform well during the quarter, with strong growth across all emerging categories.

Within this, robotic vacuum cleaners delivered strong growth, driven by increasing premiumization and shift towards our fully automatic cleaning product. We recently launched a new campaign featuring Shraddha Kapoor for robotics aimed at accelerating category adoption and strengthening our leadership in this fast-growing category.

Water softeners also reported strong double-digit growth, reflecting the growing relevance and the potential of the category. In service, revenue growth tracked at levels seen in the recent quarters.

The price increases implemented in AMC led to some moderation in bookings growth. Our filter portfolio grew well in quarter one.

During the quarter, we further stepped up our awareness campaigns on the importance of installing genuine Aquaguard filters, that in turn helped drive growth in filters. We will stay focused and continue to invest in driving awareness and changing customer behavior.

Additionally, our service KPIs remained strong, and we rolled out a series of digital interventions aimed at improving the customer experience. On the profitability front, the adjusted EBITDA margin came in at 10.5%, a decline of 46 basis points year-on-year, primarily due to a moderation in gross margins and our planned and deliberately higher growth investments.

That said, the underlying drivers of profitability, namely healthy gross margins, operating leverage, and ongoing productivity initiatives remain absolutely intact and continue to provide a strong foundation for the business. We keep investing in driving growth while simultaneously driving stronger execution, productivity, and cost efficiencies.

As shared earlier, we expect full-year EBITDA margins to be broadly in line with last year. Looking ahead, given the strong start in quarter one, we are confident of delivering a clear step-up in our FY '27 full-year growth.

All our broad categories are seeing healthy momentum, and we have strong plans lined up for the future. We believe that the long-term opportunity across all our categories remains significant, supported by low penetration levels and increasing consumer preference and awareness of health and hygiene solutions.

We will continue to invest behind our brands, our innovations, and strengthening our distribution capabilities as we progress through the year. With that, let me hand over to Gaurav for more details on our financial performance.

Thank you, Pratik, and good afternoon, everyone. I will begin by covering our financial performance for the quarter.

Revenue for the quarter stood at ₹701 crore, registering a growth of 15.3% year-on-year. The growth was broad-based and supported by continuing momentum across our product portfolio, with steady contribution from the emerging categories.

Our product business delivered growth in high teens, driven by strong performance in water purifiers, where growth was largely fueled by double-digit volume growth and calibrated price increases at the start of the quarter. Emerging categories also sustained growth momentum, led by higher mix of premium products in robotics and volume-led growth in water softeners.

Our service revenue growth was largely in line with the past few quarters' trends. Moving to profitability.

Our gross margins continue to demonstrate resilience despite a dynamic operating environment. Gross margins for the quarter stood at 58.4%, lower 131 basis points year-on-year, reflecting the impact of higher commodity costs and adverse currency movements.

While the cost environment remains challenging, we are yet to see any meaningful reduction in input costs. Our focus will be on driving our cost savings program and product mix.

Moving on to operating expenses. Employee costs stood at ₹90 crore, an increase of 10.7% year-on-year.

The year-on-year movement primarily reflects normal annual increments. We expect employee cost efficiencies to kick in over a period of time, supported by productivity gains.

ESOP charges increased by 16.2% year-on-year to ₹6.6 crore, primarily attributable to fresh employee grants and expanded ESOP coverage as part of our talent attraction and retention strategy. Service charges grew by 2.7% year-on-year to ₹83 crore, reflecting the relatively softer growth in the underlying service bookings to some extent and our ongoing initiatives to curb leakages.

Other expenses, which include A&SP spends, grew by 21.4% year-on-year to ₹162 crore. This increase is primarily due to higher advertisement and sales promotion expenses with investments focused on strengthening in-store presence in modern retail.

As a result of the above, adjusted EBITDA for the quarter grew by 10.5% year-on-year to ₹74 crore, with adjusted EBITDA margins at 10.5%. Adjusted PBT for Q1 came in at ₹61 crore, while reported PAT grew by 44% to ₹55 crore.

During the quarter, the company recognized a one-time gain of ₹19.5 crore on account of reversal of gratuity expense. Adjusting for this one-off reversal, pre-exceptional PAT grew by 6.1% year-on-year to ₹41 crore.

Turning to the balance sheet. We ended the quarter with a net cash surplus of ₹425 crore.

Our focus continues to be on maintaining a strong balance sheet while investing selectively in areas that can support long-term growth. We remain committed to generating healthy cash flows and sustaining strong capital efficiency metrics.

To summarize, quarter one reflects a strong start to FY '27, a result of strong execution by the company. Looking ahead, in a continuing uncertain environment, our focus will be on stepping up growth for the full year.

We will continue to remain vigilant on costs, and our focus will be on cost efficiencies and productivity improvements with the aim to maintain margins in line with last year. With that, I hand it back to the moderator and open the floor for questions.

Thank you.

Hi, sir. Thanks for the opportunity.

Sir, first question is on the service business. While we have seen very strong momentum and probably improved momentum in the water purifier and other businesses, I think service growth may have been flattish or very marginal growth in my assessment for the quarter.

Some sense when should we see some pick-up here given the initiatives we did last year? If you can also highlight what was the amount of price increases which we took in the AMC and that should ideally reflect in a better growth also going ahead?

Some thoughts there is the first question.

Siddhartha, thank you for the question. I think, like I said in my opening remarks, our service revenue growth tracked in and came in as per the levels of earlier quarters.

When it comes to service bookings, however, given the price increase that we took, we did see some deferral and some postponement of AMC renewals, which we expect to reduce and mitigate and normalize over time. Our price increase that we took deferred from the price increases for a single-year AMC versus a multi-year AMC, but the band was roughly between 3% to 12%.

We have, as you're aware, a number of initiatives going on on driving our service revenue. We have a lot of targeted interventions aimed at customers who are due for the AMC renewal.

We also have a very focused workstream aimed at customers who are out of warranty or out of AMC, but who have a service request or have a complaint. When they land up through our website or they call us, there is a very clear effort aimed at converting them into an AMC user.

In parallel, we also, as you're aware, has stepped up our efforts on driving our filter business. Towards the end of last year, we had launched a simplified assortment of filters.

We had gone down from 65-odd filters to five universal filter kits which are there in the market. We also had reached out to the open ecosystem of distributors of filters and spares and created a new distribution system targeted this market.

We are seeing some encouraging signs there as well, and we expect this to pick up as we go forward.

Siddhartha, also, hi, this is Gaurav. I think just to clarify, I think you made a point that in your assessment, service revenue growth was flat.

No, that is not the case. The revenue growth that we've seen in our service business is very similar to the growth that we saw in quarter four.

I think important to call out, and that you may have noticed as well in the annual reports, where there is a deferred liability balance increase that is there, and that is an annuity stream which starts coming into FY '27. From a revenue growth standpoint, the service business has indeed grown in quarter one, but at levels which are similar to quarter four.

Got it, sir. Second question is on the price hike.

While you mentioned that costs have remained steady, in terms of price hikes, are we planning to take any further price hikes or how are we planning to sort of manage the elevated costs which are there in the current quarter?

See, our current view at this point in time is that there is a momentum that is there in the category and across all the categories in which we are operating. Hence, we're going to be very calibrated and measured about any price hikes.

Yes, while we may not have fully covered for the cost increase in percentage terms, in absolute terms, we have indeed covered for it. We'll be watching the cost very, very closely, and there are ongoing initiatives to offset the impact of costs as we go ahead.

At this point in time, we're going to be more measured as far as consumer price increase is concerned, because we see a very, very strong tailwind as far as growth is concerned, and our bias would be towards not disturbing that. How do we then kind of drive efficiencies from other parts of the business to keep margins?

I think the best reference point is you look at quarter one gross margins. They are at 58.4%.

A combination of business mix, our portfolio spanning across different price points, I think all of it just helps in managing our gross margins.

Got it, sir. Sir, last question is on the A&P.

Overall, other expenditure is up 21% YoY. How much would have been the A&P growth in the current quarter if you can help highlight the numbers?

Siddhartha, we don't give out the segregation for other expenses, but you can attribute almost the entire increase that has happened in other expenses to be mostly led by A&SP. I think within that, if I were to kind of make it even sharper, it's been driven largely by our investments within store.

You will see a lot more of Eureka Forbes in retail outlets now. It's been very, very focused investments in driving in-store investments and consequently the growth.

Got it, sir. Thanks a lot.

I'll come back in the queue.

Sure. Thank you.

Hi, thanks for the opportunity. Sir, happy to see the accelerated growth.

Just wanted to get a sense on this growth. This time after a long, we are seeing a pricing action.

Out of this 15% growth, how much would be a pricing led in this growth?

Keshav, thank you. We are happy with the pick-up and acceleration in the growth.

As I mentioned earlier, this growth has been broad-based across all our categories. What was most encouraging for us was to see the strong turnaround in water purifier growth.

We grew by high teens, like I said, and it was on the back of double-digit volume growth. Therefore, what we saw clearly was a volume-led growth in the case of water, with some impact of price coming through.

We're also happy to have grown ahead of the market and have gained market share. When it comes to our cleaning portfolio, in terms of robotics specifically, the growth was more led by premiumization, where our top-end products, the fully automatic cleaning station that we had launched last year, did exceptionally well, and that drove a shift in mix towards the premium segment.

In the case of softeners, the other emerging category, there was a strong volume tailwind that helped us drive growth. It was for water and for softeners, it was much more volume-led.

In the case of robotics, it was a change in mix towards the premium, which drove the growth.

Got it. Right.

Sir, in service, you highlighted the growth is more in line with last quarter. In spite of we are taking a price hike of 3% to 12%, still the growth is not picking up.

Is it more like a deferral of service revenue or possibly the revenue that is deferred is more like a lost revenue? How should we deal, or possibly we'll get some sort of a pent-up demand, and when should we expect the service to hit the double-digit mark?

One last question on service side. Earlier, we used to talk double-digit growth on service revenue, which we have not heard this time.

Has the scenario changed?

Keshav, on service specifically, like you mentioned, and in my earlier response, we had taken a price increase between 3% to 12% for our single-year and multi-year AMC. We saw that while in the case of products, our price increases went through reasonably smoothly, when it came to our AMC, we found some of our customers postponing their purchase of AMC and waiting for a little bit more time before opting for the AMC.

Therefore, that led to the overall booking growth being softer than what we would have expected, what we would have liked.

Have you seen any revival in the service part in this quarter? Because ideally, if our growth continues at 6% kind of a number what we delivered and possibly a price hike could have 4% to 5% growth also, we could be easily hitting that double-digit mark.

I think Keshav, I'll just make one call out. What you're referring to is the bookings growth.

The revenue growth comes in with a bit of a lag because typically the AMC tenure is of 18 months. There is a lag effect which comes into play as far as AMC bookings are concerned and translating into AMC revenue.

There will be that lag effect which will come into play. Also, I think just to draw attention that from our perspective, there are two drivers for service revenue.

One is AMC. The other is driving the filter sale portfolio.

That is an important part of our portfolio because that is helping us in capture the customer at a stage where maybe the customer has chosen not to opt for an AMC or at a stage where the customer maybe does not want to renew an AMC and is leaking out. That's the other pivot that we've done nearly seven, eight months back, and that is where the focus is.

That is an area where we're investing a lot in driving awareness, and that is an area where we continue to see growth.

Got it. A last question from my side.

What will be the ESOP expense expected for this year?

We expect ESOP to be in the range of ₹25 to ₹26 crore. It should be in that range.

Okay. Fine, sir.

Thank you.

Hi. Thanks for the opportunity, and congrats on a strong top-line print.

My first question was on products. It had two parts.

First is the price hike that you've taken, how is it relative to what peers have taken water purifiers? The second part to it was the recently launched three-year filter life products of peers.

Any thoughts on that, any plan if internally, anything you can share? Yeah.

That's the first question.

Umang, thank you for these two questions and thank you for your compliment. On your first question, the price increase that we took, our peers followed, albeit with a lag, with almost similar price increases.

Though, like I said, there was a lag and of I think roughly a 30-day period when we had pricing ahead of the others. Now, as things stand today, there is again price equilibrium versus competitors.

On your second question, I think it's important to take a step back and look at the water purifier category. We know that in a country like ours, with our water quality that we have, this category has an extreme low penetration, just about 7%.

One of the barriers that we know to be a big one, a significant barrier, is a perceived high cost of ownership. Anything that addresses and tackles this barrier of the high TCO will help drive category growth and will help get new customers in.

Knowing that, as Eureka Forbes, we have done a number of things to reduce the TCO and get new customers in. Going back to three years ago, we had launched our segmented AMCs, our tiered AMCs, with AMC starting as low as ₹699 to, again, reduce the perceived cost of ownership, number one.

Number two, last year, we launched the largest range of water purifiers with two-year filter life, and that helped us, again, reduce the cost of ownership and attract new customers. As we've said earlier, about 70% of customers who entered into this portfolio are first-time category entrants.

That clearly helped us grow the category. More recently, about 45 days ago, we were the first in the country to launch a water purifier with a four-year life.

We launched two products in e-commerce, Glow 4X and Ritz Pro 4X with stainless steel, priced at roughly ₹20,000 and ₹25,000 respectively. They're met with a very, very positive response.

Just to sort of underline the fact that we did this about 45 days back, and our competitors followed more recently. We were the first in the market.

More generally, Umang, anything that helps unlock category barriers, that helps get new entrants in and therefore helps grow the category will always be to our advantage as the largest and the most trusted brand in this category. Our sights are focused on growing the category, and we'll do what it takes to reduce the barriers towards that.

Sure, that is very helpful to know. Sir, second question was on service.

You mentioned about the hikes, right? I just wanted to understand the rationale behind taking them considering that we've accepted in past that it's pricing was a barrier, right, in terms of AMCs.

Why now? The second question was in terms of standalone spares and filters, if you can highlight, have we started to see some traction for the new kits?

Any growth numbers that you can highlight? Yeah.

Umang, I'm sorry, I didn't hear the second part of the question. Can you repeat that, please?

The standalone spares and filters outside the AMC, any growth numbers that you can highlight whether the new range has started to see some traction?

Got it. No, thanks, Umang.

Let me answer your first question on the rationale for price hikes. Look, as you can imagine, we have a full portfolio approach when it comes to pricing, specifically in service and in AMCs.

We had not had price increase for quite some time. In that intervening period, we had seen inflation across fuel, inflation in labor, and we had not passed it on to consumers.

I think things reached a point more recently after the war, etcetera, when we could not hold on to that any longer. Even within that, we did our price increases in a very calibrated way with a lot of analytics on what customer segments were price sensitive and which were not.

That led to the price increase. Yes, unlike in products, in service, we did see some impact of price increase in terms of fresh bookings, but that's more a deferral.

People are waiting for some more time before they renew the AMCs. We expect, like I said earlier, this impact to mitigate and to normalize over time.

On the second question that you had, which is about our non-AMC filters and spares, as I mentioned earlier and as you're aware, we've done a number of things including launch of very simplified portfolio, driving a new distribution in system, and most importantly, driving enhanced consumer awareness. Our digital campaigns have been sustained and in fact increased in quarter one.

We also launched a campaign which was 100 consumer digital campaign. The line was Stop, Check and Relax, about asking customers to stop the technician and check what filter was being installed before they let it go ahead.

I think those campaigns have helped us. We have seen some encouraging signs on filters.

As Gaurav said earlier, we're seeing that part of the business grow well, and we have optimism and we believe strongly that this part of the portfolio will keep growing in the quarters to come.

Got it. Thank you so much, and all the best.

I'll fall back in the queue.

Thanks, Umang.

Yeah. Good afternoon, team.

Thank you for the opportunity. Sir, two questions.

If you could call out what is the A&P spend absolute for the current quarter and the last year same quarter? What kind of spend we are looking at for the full year?

Hi, Achal. We don't give the break-up at a quarterly level as far as A&SP spend is concerned.

I think I'll give some color on this. I think first, at an overall year level, we do expect our A&SP spend to be ahead of revenue growth, so that is something that we are planning for.

Point number two, bulk of these spends are going to be directed very, very specifically on two things. One is in-store presence, which is our availability and our visibility inside the stores, having more promoters, etcetera, etcetera.

The second part is in driving more consumer finance adoption. You will see that the common pattern in both of them is that it's about getting more and more consumers to convert into an Aquaguard purchase.

It's going to be very, very focused investment that we will be doing. Over the past couple of years, we believe we've invested adequately behind the brand, and we believe now is a stage where it's about converting the customer at the point of purchase.

The big picture, you should expect our A&SP spends to increase ahead of revenue growth as far as FY '27 is concerned, but in very, very targeted spaces.

Understood. The second question I have, just on the services piece.

There are two parts to this question. One, you mentioned about the liability part which will get recognized in FY '27 given the deferral accounting.

If you could clarify on that in terms of whether it will have an upside impact on the overall services growth for the year. Number two is that given the weaker bookings, right, did that help in terms of protecting the margins?

Because in last year, given it was the initial year for the services piece where you had called out that the upfront impact is actually more negative than positive at the EBITDA margins. If you could clarify on both these aspects, please.

Yes, Achal. On the first question, yes, the service liability does help in getting revenue in FY '27 and consequently driving growth.

At this point in time, the visibility that is there is that we do expect our growth to continue beyond quarter one as well. Having said that, for a revenue growth to translate, it does require in-year bookings to come in as well.

Given that there is a relative softness that we've seen, and these are initial signs that we've seen as far as AMC bookings are concerned, that impact could play out towards the later part of the year. Having said that, at the same time, we continue to see growth in our filter business.

There is that compensating effect which is there. Big picture at this point in time, the visibility that we have is that from a service revenue growth perspective, we expect our Q2 level growth to be similar to what we've seen in Q1 and not very very different.

Beyond that, we have to see how bookings go and how the filter business scales up. To your second question on softer bookings, whether it helps in service charge, yes, it does indeed help to some extent, and there is a translation of that in the service charge increase.

There is an element which comes into play, but it is not a very, very large impact to drive overall profitability for the quarter.

Got it. Just a clarification on the filter business.

Does it come with the similar margins or it comes at a slightly lower margin?

From a gross margin perspective, it is slightly lower than AMC, but not very off. Filter is also relatively high gross margin business.

Got it. Thank you.

I have more questions, but I'll fall back in the queue. Thank you.

Sure. Thank you.

Hi. Good afternoon, everyone.

Thanks for taking my questions. Firstly, sir, you mentioned in the products business on the market share gains aspect.

Just trying to understand, is there any angle here of other players who might be struggling due to some of supply chain disruptions that happened in 1Q because of the West Asia crisis, which might have resulted in this quarter deep market share gain, or is it more like organic, your own initiatives and efforts which are leading to this gain?

Sameer, thank you for the question. Our market share gains in quarter one in water came on the back of strong consumer propositions, enhanced investments in points of sale through better promoters, more visibility, and disciplined execution.

There was no element of a supply constraint from anybody else which led to this increase. It was a very competitive playing field in quarter one, like it has been in the past, and it was in that context that we gained market share.

Got it, sir. That's very clear.

Second question is, in the initial remarks, you mentioned about EBITDA margin for this year, whether the aspiration to make it in line with last year, and you've also mentioned that the price hikes taken, there is no real plan to take any more as long as the absolute is covered. A&P also you plan to do more than revenue growth.

Just wondering how the margins would be maintained. Is it a year where you would like to squeeze the cost or there are some optimization programs in place specifically for this year?

Just some color on that aspect, sir.

Sameer. No, it's a great question, and before I again get into the full-year view, I think just for clarity, when you look at our quarter one margins, you see a drop of roughly 50 basis points.

You would have noted something similar even in last year, and the reason for that is we consciously upfront our growth investments. That's a very, very conscious choice so that we get the full impact during the course of the year.

Hence, to that extent, quarter one for us is always a more than usual increase in A&SP spends that we do. That's point number one.

The reason why I'm calling it out is that it would not be a similar trajectory in every single quarter. That's one.

Having said that, I think two or three points. Definitely we've got multiple cost workstreams at play covering both COGS and our operating expenses.

That's an ongoing exercise, and our focus is on driving efficiencies to come into play. The second is a higher growth definitely leads to operating leverage.

Even if you were to disaggregate this particular quarter, you see a margin drop of 46 basis points. There is a 130 basis points of gross margin drop, which is there, and despite a higher A&SP investments, you see operating leverage compensate everything else.

That's the math which is there. On one hand, you've got a gross margin drop and a higher A&SP investment, but growth is making sure that operating leverage is addressing most of it.

We believe that with a combination of stepped-up growth that we are quite confident of and our ongoing cost initiatives covering both COGS and OPEX, we should be able to land margins in line with what we are aiming for. The best reference point is same time last year, where we started the year with quarter one margins being down 50 basis points year-on-year, but we ended the year with a margin expansion of nearly 55 basis points.

That's very, very clear, sir. One last question if I may squeeze in with your permission.

Please go ahead.

Yeah. Thanks.

I know it might be a far-fetched scenario, but just in case the prices were to correct, what would be our approach? Do we take reversal of the price hikes that we have already taken?

How does this work in this industry? Is it like whatever price hikes are done, and whenever the commodity costs correct, that is your gain to be had in the P&L, or you do pass it on in some ways, maybe not MRP, but in some other ways?

Sameer, that's a great question, and I love your optimism. We are equally hopeful that some of the cost increases that we've seen start correcting.

If and when it does, you can be sure that we will do whatever it takes to drive growth. As I said earlier to your earlier question, we operate in a competitive category, and therefore, if costs correct, we'll have to pass them on to consumers and make sure we stay competitive and drive growth and drive market share.

Got it, sir. That's all from me.

Thanks a lot.

Yeah. Thank you.

Thanks so much, team Eureka. Two questions.

One is to our journey to 2030 on the EBITDA and sales. Where are we right now?

At what juncture we are in terms of expanding product portfolio and also building the D2C platform? That's my question number one.

Good afternoon, Vikram. Thank you for the question.

As as you're aware and as you just mentioned, we had we had talked about our ambition for FY '30, both on growth and on profitability. With the performance that we delivered in quarter one and with the plans that we have lined up for the rest of the year and beyond, we we are confident of delivering to that ambition through FY '30.

Both when it comes to top line and comes to profitability. Our ambition of 2x revenue from FY '25 to FY '30 and 3x EBITDA in the same period remains the North Star for us, and we remain confident of delivering that.

When it comes to our D2C ambition, again, just to step back and remind ourselves why D2C becomes relevant in our context even more so. We were and we are, in many ways, India's oldest D2C company, albeit in a very physical way, when we had access to consumers' homes.

We had access for 40 years now, both in the direct sales context and also in the regular post-servicing context. We have the first-party data of of 15 million customers, and we know their needs.

We know We have the data. We analyze their requirements, etcetera.

These are happy customers. These are customers who trust us.

By building our D2 We also have, as you're aware, a strong digital platform, which we've built in the last three years. We have nearly 2.5 million monthly active users, and that's organic traffic.

That's very, very valuable. The objective is to make sure we use these assets and the strength that we've got to drive increased cross-selling.

Our our multiple category ownership is less than 1% right now. How do we make sure that we drive cross-category and cross-selling to our installed base of users, also to drive faster upgrades and replacements of Aquaguard itself?

That is the strategic logic behind driving D2C. We're happy with the progress we've made both both last year, and indeed even in quarter one, we saw strong growth come to us from our D2C engine, and we've got a a a full slate of initiatives in play for the balance of the year to scale this up even further.

As you can imagine, this this asset and, this this base of customer data is not available to most other durable companies, certainly not to our competitors. We therefore find it very, very valuable, and we intend to increase our D2C play in the in the quarters to come.

Right. Point.

Second question on the robo vacuum cleaner, a new market, not the old market, and very preferred by the Gen X and the people who are working class. Where do you see 3 years later this market?

Because right now, I see products ranging from 10,000 to 1,50,000, and Eureka is the strongest player. How do you see competitive landscape in 3 years?

What is your going to be USP? Yes, I know you are a great value guy.

You are a great customer service company. Where do you see 3-year landscape?

Is pricing going to go down, or how do you envisage the 3-year from now, the robo market? Looks like a great category, but I think how the pricing, how the competitive density, how the landscape will play out, can you throw some light on that?

It's a little long-term question. Thank you.

No, thanks, Vikram. That's a really good question, a question very close to my heart.

Robotics, as you mentioned, is a segment in momentum. It delivers a convenience and a solution which is analogous in many ways to washing machines, what washing machines delivered 25, 30 years back.

It replaces manual labor. It gives a Plan B for the homemaker when the maid doesn't turn up.

We've seen this category grow consistently across the country. Number one.

Number two, this category, and I think the greatest proof of its potential is the fact that this category is now moved from being a merely online category to now growing aggressively in offline as well. We're seeing modern trade chain shoots take it in growth, both the national chains as well as regional chains.

We're seeing all the top end traditional trade outlets also show strong growth and attraction for the category. I think this category is one of momentum.

As the market leader in this category, our right to win comes from three or four things. First one is ensuring we have a full portfolio play in this segment.

Because as a customer, like in all categories, who's a value-conscious consumer, looking for a very specific Plan B solution, which is convenience when needed, cleaning when needed, to a customer who wants a fully automated, fully convenient cleaning solution, which may end up being their Plan A itself. They may not have domestic help to come to clean.

That will span a price point from between ₹15,000 to ₹75,000, ₹80,000, ₹1 lakh, like you said. We intend to have a portfolio that spans the entire continuum, much like we do in water right now.

Therefore, our right to win comes from having that full-stack portfolio, number one. Number two, an understanding of the Indian consumer need and the Indian consumer's cleaning needs and therefore creating functionalities and features which speak to that.

For example, corner cleaning, for example, cleaning under sofas. Carpet cleaning is not such an important use case for India for obvious reasons, unlike in Europe or in the US, but some of the others, dust cleaning, very superior dust cleaning efficacy becomes a very important feature for India, for instance.

Yeah? A, like I said, a full-stack portfolio.

B, having features curated for Indian consumers' needs. Number three, ensuring that we leverage our vast service network.

Because this is an expensive product, and therefore customers, when they enter the category, are looking for reliable service, and knowing that there's a service network close at hand. That's the third part which will give us the right to win, our own service network that we have across the country, 19,500 pin codes.

That has been expanded to service robotics as well. Fourth, our brand reputation.

Eureka Forbes is as strong a brand as Aquaguard, and to bring that equity to bear again gives us the right to win. Fifth, I think the earlier point about D2C.

The fact that we have a 15 million database of customers, many of them will be early adopters of new categories and innovations. I think this is a great chance for us to reach out to them and cross-sell some of these categories.

Also, will not add to that, Vikram, the fact that we have feet on street as well. We have a fleet of direct sales employees and sales force who can actually go to the customer's home and do a physical demo.

Our large service network who can do exactly the same thing. Put all these strengths together, I think it becomes a very compelling playbook.

Last but not the least, our strong offline presence. Let's say a newcomer who comes, let's say a Chinese brand comes in.

It's easy for them to play merely online. With Amazon, Flipkart, they can do that easily.

Entry barrier is much lower. When it comes to offline, going to 3,000 outlets across the country, having points of sale visibility, having points of sale promoters, of course service network, I think that's a very, very hard strength to replicate quickly.

All of these put together gives us, we believe, a strong right to win in this category. Which is exactly why we've said that by FY '30, this will be a ₹1,000 crore business for us going forward.

That was very passionate and elaborated reply. Thank you, Pratik, for that.

Thank you so much.

Thank you, Vikram.

Good afternoon, sir, and thank you for taking my questions. I apologize for some noise at the background.

I am traveling, if there are more disturbances, please let me know. I hope there's no problem.

With that, actually I had two questions. One is on the long-term plan.

Just wanted to understand, given the fact that services business is taking a little bit more time to show up on the revenues growth side, and when we say 2x revenue growth for FY '30, from I'm not asking for exact numbers, but from an indexation perspective, is it right to understand that compared to FY '25, the products revenues will actually grow much faster than the services CAGR which is going to come, and is it possible to give us some understanding and how will it play out? Let's say, will it be if the product grow 2.5 and this will grow 1.5, or whatever based on proportions which we have, what is the right way to look at this as we go ahead till in the journey of FY '30?

Mayur, thank you for the question. I think like you reminded me and like you said, our FY '30 ambition is to drive a 2x revenue scale up versus FY '25 and a 3x in EBITDA.

This will come through growth in our core category of water purifier and through the growth that we see in our emerging categories, specifically robotics, air purifiers, and softeners. These categories, as I mentioned in my earlier remarks to Vikram as well, some of these categories are growing very, very strongly.

Robotics, for instance, or indeed air purifiers or softeners. These product segments are growing very, very strongly, and we expect that these categories continue to grow ahead of the average.

As we look to FY '30, between all these categories put together and the service growth, we'll deliver the revenue that we spoke about, which is 2x. The service mix may change depending on how the service growth plays out.

Just to remind all of us, service is not just AMCs. We have a big opportunity in filters, which will grow well ahead of our AMC growth.

In many ways, our filter product is much like any other product. It's in a large TAM, large market with low penetration, and where we have a low market share, but a large right to win.

We expect filter growth to clock in ahead of AMC growth. Therefore, between them, we expect the 2x revenue to be closed out.

Okay. Including the filters growth, we believe more or less even the services part or that will continue to have a healthy

Services will grow at a healthy pace between AMC and filters, and that's our conviction through FY '30. Sorry, go on, please.

I have a question on margins, but before that, I forgot to say that the commercial on the filters is quite good. I think we have hit the right chords, and hope that the cost of ownership challenges which is there in the overall product, water purifier as well as in the services AMC piece, we see that playing out a little bit.

You have also mentioned and we see that. Hope as far as the filters are concerned, we get the right pricing as we go ahead, and it's a very, very large as we understand.

Hope you get the right pricing in the right chord, and the commercials do touch the right thing. Wish you all the best for that.

A question on margins, especially for this year. In the past, we have been mentioning that in our journey to 3x profitability growth, the way to look at is we will see a 50 basis points kind of margin expansion in every year as we go ahead in that.

Now for this year, specifically in that journey, will it be right to assume that for this year that aspiration Gaurav just mentioned in the last question that the right way to look at is just 50 basis points. It's in first quarter, but we ended with a 50 basis points up-size while the year ended.

For FY '27, we said that we want to maintain the margins as we go ahead in line with the previous year. For this year, is it right to assume that the journey will be not there given the cost pressures which we have see or we continue to have that aspiration to increase margin in line with just a higher index?

Yeah. No, Mayur, I think from our perspective, the key part has been that over the last three years, we've consistently improved margins.

That always is our goal in position that how do we land with a sustainable, profitable growth. I think you will appreciate that this year has been extremely unusual.

I think just what's happened on the commodity side and the forex side and the ongoing geopolitical crisis, which is not showing any signs of closure. I think it's an extremely unusual year that one is dealing with.

With that context, we believe that being able to hold on to margins itself would be a very good outcome to achieve, because what it does is that with a bigger scale of business as we go into next year, you always get an opportunity then to kind of make up for it. That's the way we are looking about it.

Our goal in position at this point in time, as I mentioned, is to aim for margins same as last year.

Mayur, thank you for your feedback on the advertising campaign. I will convey your appreciation to the marketing team, and I'm sure they'll be very happy.

Thank you.

Hi, thanks for the opportunity. I have one question.

As the category is growing, we can see a lot of new players coming in. What will be Eureka Forbes strategy to defend the existing market share or capture new?

How are we going to differentiate our products from our peers? Just adding to this, now that we have increased the cost of AMC, the total cost of ownership of owning a Eureka product also goes higher.

What is your outlook on this?

Anjali, thank you for the question. On the first point, on the first question, I think it's important to first appreciate and recognize, and we believe that very strongly, that if there are more competitors in the category, it creates excitement.

It drives innovation. It creates much greater consumer interest, and that will help grow the category.

In a category like water purifiers, which has low penetration, anything that helps stimulate growth, I think is great for the category. We welcome all competitors who enter the category.

As India's largest and the most trusted water purifier brand, Aquaguard, I think is at the forefront of driving innovation and driving category growth. We've got two strategic directions when it comes to water purifiers.

The first one is to grow penetration, to drive affordability both in terms of cost of entry and then the cost of ownership. Which is why we have an affordable Aquaguard called Aquaguard Sure, which is a more affordable Aquaguard, most affordable water purifier in the category, which is aimed at attracting non-users into this into the category.

Equally, we've launched a slew of products with two-year filter life, and more recently, like I said earlier on the call, two products in e-commerce with a four-year filter life and a four-year life and a four-year unconditional warranty. These again address the issue of cost of ownership.

That's on the driving penetration part of it and reducing the barriers to entry. Equally, there are customers and consumers looking for premium solutions, looking for differentiated solutions.

For them, we have a range of premium and differentiated offers. Let me give you two examples.

We launched We launched a couple of years ago India's first water purifier with instant hot water. Last year, we launched India's only water purifier that gives hot, cold, and ambient water.

We have India's largest range of smart, connected, IoT-based water purifiers. We also have a very very competitive and, advantageous under-the-counter product for modular kitchens.

Again, both by driving penetration and by driving differentiation and premiumization, we intend to stay competitive and to stay at the forefront of driving growth. I think the last point I want to underline is that when we look at this category, we do not navigate and we do not look at competitors.

As category leaders, we are Our sights are focused maniacally on the consumer, looking at what the barriers are, looking what it takes to drive growth and drive behavior change, and that's where we'll remain. Notwithstanding that the entry of other players, like I said earlier on the call, in quarter one, we have grown market share.

Just telling you how competitive we are and how focused we are. We have to be agile.

We have to be aggressive. We have to be customer- and consumer-obsessed and work back from there.

We cannot be like a incumbent company. We have to be like an agile startup, and that's exactly the way our entire teams are working.

I do get this. The numbers from FY '23 to FY '26, it shows a CAGR of 11.26% revenue growth per year.

Is there any increase in the market share as we're seeing that we are aggressive in our approach as well? The numbers don't show that.

Anjali, yeah, go on, please. Go on.

I thought you had finished. Please go on.

No, no. You can please go on.

No, Anjali, no, thanks for pointing that out. Let me also sort of give you the context, historical context in this category.

This category of water purifiers had seen very little growth in the years until FY '23. In FY '24 onwards, when we started doing a number of initiatives, for example, launching India's most affordable Aquaguard, driving consumer awareness for the harmful effects of drinking unpurified water or water purified only by candle filters, that has helped start seeing category growth.

We have seen an acceleration in category growth over the last two years, not just in water, but also like I said in emerging categories. Looking ahead to the future, you might have seen our presentation on the website that we did at the Investor Day, where we've spoken about our ambition of reaching a 2x revenue scale, between ₹5,400 to ₹5,600 crore by FY '30, which over a five-year period would have a CAGR of 17% to 18%.

As I mentioned earlier on the call, that would mean that the PAT would be even higher than this. I think it's important to recognize and remember the context on some of these numbers.

Like I said, our focus is on growing and growing by the consumer and making sure we stay at the edge of innovation and drive growth and drive share.

Just squeezing in the last question. What is the plan, and how do we increase our operational efficiencies in the upcoming quarters since there the hike in the AMC prices also?

There's going to be less or moderate growth in terms of new customers entering in AMC.

No, Anjali, that's a really good question, and absolutely, as Gaurav mentioned on the call earlier, I think we have a very focused and a very deliberate, planned interventions aimed at reducing wastage and driving greater efficiencies. In every part of the business, we are taking a brutally clinical look at all costs and ensuring that we use technology, we use the power of data, make process changes as required.

More and more recently, we also begin to use AI to find areas of efficiency. That's a very, very focused workstream, which will help us reduce wastage and drive efficiencies.

Thank you for that question.

Thank you so much for patiently answering all my questions.

Thank you. Thank you, everyone, for your questions and for tuning in to the call today.

I hope we were able to answer all the questions and give and give some of our insights. If you have any follow-up questions or you need more information, please do circle back with us to us and to Nupur, and we'll be happy to revert to you.

Thank you so much, and have a good day.