Eureka Forbes Ltd Valuation Shifts: Price Attractiveness Improves Amid Market Headwinds

Valuation Metrics Show Improved Price Attractiveness

As of 26 Feb 2026, Eureka Forbes Ltd trades at ₹482.00, down 2.31% from the previous close of ₹493.40. The stock has seen a 52-week high of ₹668.50 and a low of ₹451.60, indicating a significant correction from its peak. Despite this, the company’s valuation grade has been upgraded from fair to attractive as of 24 Nov 2025, signalling a more favourable entry point for investors.

The current P/E ratio stands at 49.14, which, while elevated, is considered attractive relative to the company’s historical valuation and sector peers. The price-to-book value ratio is 2.06, reflecting a moderate premium over the book value but lower than some competitors in the Electronics & Appliances sector. Other valuation multiples such as EV/EBITDA at 29.86 and EV/EBIT at 37.88 remain on the higher side, consistent with the company’s premium positioning but still within a range that supports the attractive valuation grade.

Comparative Analysis with Industry Peers

When compared with key peers, Eureka Forbes’ valuation metrics present a mixed but generally positive picture. Whirlpool India, for instance, trades at a P/E of 33.14 and EV/EBITDA of 16.81, with an attractive valuation grade. TTK Prestige holds a fair valuation with a P/E of 41.22 and EV/EBITDA of 25.56, while Symphony is classified as very expensive despite a lower P/E of 35.37, due to its EV/EBITDA of 30.57 and PEG ratio of 3.25.

IFB Industries and Hawkins Cookers also maintain attractive valuations with P/E ratios of 34.44 and 30.11 respectively, and EV/EBITDA multiples below Eureka Forbes. Eureka Forbes’ PEG ratio of 1.71 is notably lower than Whirlpool India’s 5.06 and Symphony’s 3.25, suggesting a more reasonable price relative to earnings growth expectations.

Financial Performance and Returns Contextualise Valuation

Despite the improved valuation, Eureka Forbes’ recent financial performance has been under pressure. The company’s return on capital employed (ROCE) is 5.42%, and return on equity (ROE) is 4.10%, both modest figures that reflect operational challenges and subdued profitability. Dividend yield data is not available, which may be a consideration for income-focused investors.

Stock returns over various periods highlight the company’s struggles relative to the broader market. Year-to-date, Eureka Forbes has declined by 21.91%, significantly underperforming the Sensex’s 3.46% gain. Over one year, the stock is down 5.49% while the Sensex has appreciated 10.29%. Longer-term returns over three years show a modest 2.79% gain against the Sensex’s robust 38.36% rise, underscoring the stock’s laggard status within the sector and market.

Market Capitalisation and Mojo Score Reflect Caution

Eureka Forbes holds a market cap grade of 3, indicating a mid-sized market capitalisation within its sector. The company’s Mojo Score, a composite measure of financial health and market sentiment, stands at 37.0 with a Mojo Grade of Sell, downgraded from Hold in late November 2025. This downgrade reflects concerns over the company’s earnings momentum, profitability ratios, and relative price performance despite the improved valuation metrics.

The downgrade signals that while the stock’s price may be more attractive on valuation grounds, underlying operational and market challenges persist, warranting a cautious stance from investors. The Electronics & Appliances sector remains competitive, with peers demonstrating stronger growth prospects or more compelling valuations.

Valuation in the Context of Sector and Market Trends

The Electronics & Appliances sector has experienced mixed fortunes, with some companies benefiting from rising consumer demand and others facing margin pressures due to input cost inflation and supply chain disruptions. Eureka Forbes’ valuation improvement partly reflects the market’s recognition of its brand strength and potential for recovery, but also the correction in its share price from recent highs.

Investors should note that the company’s EV to capital employed ratio of 2.12 and EV to sales of 3.45 suggest moderate capital efficiency and revenue valuation, which are in line with sector averages. However, the relatively low ROCE and ROE indicate that capital utilisation and profitability remain areas for improvement.

Investment Implications and Outlook

For investors considering Eureka Forbes, the shift to an attractive valuation grade offers a potential entry point, especially given the stock’s correction and relative valuation compared to peers. However, the company’s modest returns on capital and equity, combined with a negative recent price trend and a Sell Mojo Grade, suggest that caution is warranted.

Long-term investors may find value in the brand’s established market presence and the possibility of operational improvements driving earnings growth. Yet, the stock’s underperformance relative to the Sensex and sector peers over multiple time horizons highlights the need for a thorough assessment of the company’s strategic initiatives and competitive positioning.

In summary, Eureka Forbes Ltd’s valuation parameters have become more attractive, reflecting a lower price relative to earnings and book value. However, the broader financial and market context advises a balanced approach, weighing the improved valuation against ongoing challenges and sector dynamics.

Historical Valuation and Price Trends

Historically, Eureka Forbes has traded at higher multiples during periods of robust earnings growth and market optimism. The current P/E of 49.14, while high in absolute terms, is lower than peaks seen in prior years when the stock approached its 52-week high of ₹668.50. The recent price decline has contributed to this valuation reset, making the stock more accessible to value-oriented investors.

Price-to-book value at 2.06 also indicates a moderate premium, suggesting that the market still prices in some growth potential despite recent setbacks. This contrasts with some peers like Symphony, which trades at a higher valuation but with less favourable growth metrics.

Conclusion

Eureka Forbes Ltd’s transition from a fair to an attractive valuation grade marks a significant development for investors seeking opportunities in the Electronics & Appliances sector. While the stock’s price correction has improved valuation multiples, underlying financial performance and market sentiment remain subdued, reflected in the Mojo Grade downgrade and relative return underperformance.

Investors should carefully weigh the improved price attractiveness against the company’s operational challenges and sector competition. A selective approach, possibly integrating Eureka Forbes within a diversified portfolio, may be prudent until clearer signs of earnings recovery and margin expansion emerge.

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