Valuation Metrics and Market Context
As of early February 2026, Eureka Forbes trades at ₹504.25, down 7.4% on the day from a previous close of ₹544.55. The stock’s 52-week high stands at ₹668.50, while the low is ₹451.60, indicating a significant range of volatility over the past year. The company’s current P/E ratio is 51.41, a steep figure that has contributed to the downgrade in its valuation grade from attractive to fair. This elevated P/E contrasts sharply with peer companies such as Whirlpool India and IFB Industries, which maintain more moderate valuations of 29.67 and 33.76 respectively, both rated as attractive.
Similarly, Eureka Forbes’ price-to-book value of 2.16, while not excessive, is higher than some peers, reflecting a premium that investors are now questioning. The enterprise value to EBITDA (EV/EBITDA) ratio of 31.28 further underscores the stock’s relatively rich valuation compared to sector averages. For context, Whirlpool India’s EV/EBITDA stands at 14.35, and IFB Industries at 14.05, both significantly lower and indicative of more reasonable pricing.
Financial Performance and Returns
Underlying these valuation concerns are the company’s modest returns on capital employed (ROCE) and equity (ROE), which stand at 5.42% and 4.10% respectively. These figures suggest limited efficiency in generating profits relative to the capital invested, which may be contributing to investor caution. The lack of a dividend yield further diminishes the stock’s appeal for income-focused investors.
Examining recent stock performance relative to the broader market, Eureka Forbes has underperformed the Sensex across multiple timeframes. Over the past month, the stock has declined by 19.19%, compared to a 2.27% fall in the Sensex. Year-to-date, the stock is down 18.31%, while the Sensex has dipped only 1.65%. Even over a one-year horizon, Eureka Forbes has lost 10.35%, whereas the Sensex gained 6.66%. These figures highlight the stock’s vulnerability amid broader market resilience.
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Comparative Valuation: Peers and Sector Benchmarks
When benchmarked against its peers in the Electronics & Appliances sector, Eureka Forbes’ valuation appears stretched. Whirlpool India, rated attractive, trades at a P/E of 29.67 and EV/EBITDA of 14.35, nearly half of Eureka Forbes’ multiples. IFB Industries and Hawkins Cookers also maintain attractive valuations with P/E ratios of 33.76 and 31.77 respectively, and EV/EBITDA multiples well below 25.
On the other hand, companies like TTK Prestige and Symphony are classified as expensive or very expensive, with P/E ratios of 43.46 and 40.32 respectively, and EV/EBITDA multiples of 27.06 and 35.07. Eureka Forbes’ valuation now sits in a middle ground, rated as fair, reflecting a recalibration of investor expectations amid subdued financial performance and sector headwinds.
Market Capitalisation and Mojo Score Implications
Eureka Forbes holds a market capitalisation grade of 3, indicating a mid-sized presence in the market. Its Mojo Score, a proprietary metric assessing overall stock quality, stands at 40.0 with a Mojo Grade of Sell, downgraded from Hold on 24 Nov 2025. This downgrade signals a deteriorating outlook from the analytical perspective, factoring in valuation, financial health, and price momentum.
The downgrade reflects concerns over the company’s stretched valuation metrics, modest returns, and recent price underperformance. Investors are advised to weigh these factors carefully, especially given the stock’s underwhelming relative returns compared to the Sensex and sector peers.
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Outlook and Investor Considerations
Looking ahead, Eureka Forbes faces the challenge of justifying its valuation premium through improved operational efficiency and stronger earnings growth. The current ROCE and ROE figures suggest room for improvement in capital utilisation and profitability. Without a dividend yield, the stock’s appeal rests primarily on capital appreciation, which has been under pressure recently.
Investors should also consider the broader sector dynamics, where competitive pressures and evolving consumer preferences may impact growth trajectories. The company’s elevated P/E and EV/EBITDA multiples imply expectations of future growth that must be realised to sustain current price levels.
In comparison, peers with attractive valuations and stronger financial metrics may offer more compelling risk-reward profiles. The downgrade to a Sell rating by MarketsMOJO’s proprietary grading system reinforces the need for caution.
Summary
Eureka Forbes Ltd’s shift from an attractive to a fair valuation grade reflects a recalibration of market expectations amid stretched price multiples and modest financial returns. The stock’s elevated P/E of 51.41 and EV/EBITDA of 31.28 stand out against more reasonably valued peers, while recent price underperformance relative to the Sensex adds to investor concerns. With a Mojo Grade downgraded to Sell and a market cap grade of 3, the company faces headwinds in justifying its premium valuation without demonstrable improvements in profitability and growth.
For investors seeking exposure to the Electronics & Appliances sector, a thorough peer comparison and valuation analysis is advisable before committing capital to Eureka Forbes at current levels.
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