Eureka Forbes battles digital-first rivals as water purifier market heats up

Pratik Pota, chief executive officer and managing director of Eureka Forbes, told Mint that cost perceptions remain the category’s biggest hurdle. “The first is affordability. Water purifiers are seen as expensive—both the upfront cost and lifetime cost of ownership," he said.

New-age companies such as Urban Co.’s Native and Atomberg are targeting those very concerns with transparent pricing, predictable servicing and lower ownership costs, directly threatening the after-sales revenue stream long dominated by Eureka Forbes.

Despite the rising pressure, the company saw strong results for the September quarter. Eureka Forbes on 13 November reported ₹773.4 crore in revenue, a near 15% year-on-year increase, marking its eighth straight quarter of double-digit growth. Net profit rose 32% to ₹61.6 crore, while adjusted Ebitda crossed ₹100 crore for the first time, with a lifetime-high 13.1% margin. Its after-sales business, annual maintenance contract (AMC)—which new-age rivals have been eyeing aggressively—recorded double-digit growth, signalling a meaningful turnaround.

Prior to that, Eureka Forbes’ AMC growth was flat or in low single digits due to leakage from the AMC cycle and customers switching to unorganized service technicians.

Taking on disruptors

Driven by increasing water contamination and a current penetration rate of approximately 7%, The Knowledge Co. report estimates the total Indian water purifier market to grow at an annualized rate of about 10.1% from ₹8,860 crore in FY24 to ₹14,350 crore by FY29.

Eureka Forbes’ strong performance is also outpacing the broader market. India’s water purifier category grew at roughly 5% CAGR between FY19 and FY24, but Eureka Forbes’ purifier portfolio expanded nearly 12% annually over FY23–25 and is projected to grow at 14% through FY28, according to a 20 October note by Antique Stock Broking Ltd.

The renewed momentum comes as meagre penetration of water purifiers in India has drawn digital-first disruptors, which are trying to capture the market with transparent pricing, low-cost maintenance and app-led service fulfilment.

“This is a category where demand exists, but affordability and experience have held back penetration," said Satish Meena, founder of research firm Datum Intelligence. “Newer players are attacking exactly those friction points."

For perspective, while Eureka Forbes, India’s largest water purifier brand, reported ₹773.4 crore in revenue in the September quarter, Urban Co.’s entire consumer services vertical, which includes its Native purifier business, posted ₹262 crore for the period. Atomberg Technologies, another aggressive challenger entering the category, recorded ₹864.6 crore in revenue for the entire FY24.

Eureka Forbes has been in the market for over 40 years; Urban Co. is 11 years old, and Atomberg has been around for barely a decade. Yet, both are already operating at revenue scales that place them within striking distance of the long-time incumbent.

“Urban Company has changed consumer expectations in categories it enters," Meena said. “Their pitch is simple: predictable service, transparent pricing and no hidden maintenance costs. That resonates with younger households who are tired of the traditional AMC-heavy model."

However, Urban Co.’s Native is still unprofitable, chief executive officer Abhiraj Singh Bhal said in a post-earnings call with analysts on 1 November. Eureka Forbes, which generates most of its business from water purifiers, is profitable.

“We have a slightly more clearer picture of the P&L (profit & loss) and how it is evolving. I think Native is progressing well. I think margins are improving," Singh told analysts. “And while we do not want to commit to a firm timeline of adjusted EBITDA breakeven for Native, we believe that we are moving well in that direction and peak losses are behind us."

AMC churn

One major challenge for Eureka Forbes, Pota said, has been that a small portion of existing customers fall out of the AMC cycle altogether—a gap quickly captured by rivals like Native. To retain these customers, Eureka Forbes introduced affordable replacement filters and simplified service options aimed specifically at re-engaging lapsed users.

To make long-term ownership cheaper for first-time buyers, the company launched entry-level purifiers priced at ₹7,000 and two-year filter life. The product was launched six months ago, a timing Pota described as crucial because new entrants began aggressively scaling their purifier businesses around the same time, intensifying competitive pressure in digital channels.

“More than 70% of buyers of the two-year models are first-time users," Pota said, adding that the new range is expanding penetration, rather than shifting existing customers within the portfolio.

High AMC fees, inconsistent technician quality and slow response time have long been consumer grievances. Recognizing this, Eureka Forbes prioritized service transformation as the second phase of its turnaround strategy.

The company has digitized its entire technician fleet, introduced real-time tracking, enabled slot selection and shifted the majority of service requests online. Today, more than 60% of service bookings come from its app and website, which records over one million monthly active users. Internal service metrics, including first-time resolution rates, have reached “lifetime highs", Pota said.

As the only player with 15 million first-party customer records, Eureka Forbes also has a massive installed base that offers recurring revenue through filter replacements and upgrades. Rather than resisting the unorganized technician network—which still plays a big role in the aftermarket—the company is integrating them into its ecosystem. “They are not competitors; they are partners in servicing a very large installed base," Pota said.

Low-cost products grow

A significant portion of recent growth has come from the economy segment, normally a margin red flag. However, Pota said the margins remain intact. “Our economy products are not loss leaders," he said. “Even with portfolio expansion, our margins have expanded over the last three years."

Meena of Datum agreed that the category is entering a phase where both premium and affordable products will grow in parallel. Consumers want value, not just low prices, he said.

Eureka Forbes reported a return on capital employed (Roce) of more than 350% and maintained a net cash position, supported by strong cash flows and disciplined working-capital management.

Urban Co. and Atomberg have made the category more competitive. Legacy rival Kent remains a strong second player, and international brands, such as LG, A.O. Smith, Whirlpool and Xiaomi, have also started exploring India’s potential.

Yet, Pota believes the market leader is structurally better placed. “When categories grow, the strongest brands gain disproportionately," he said, citing the company’s multi-tier pricing strategy, expansive service network and decades-long understanding of India’s diverse water-quality patterns.

Antique Stock Broking’s note says the category is entering a high-growth phase. With water purifier penetration in China, South Korea and Southeast Asia at 20-60%, India’s current base remains vastly underdeveloped. As households prioritize health and hygiene, the category is expected to expand meaningfully over the next five years.

Meena also sees a long runway. “Water is becoming a non-negotiable health category," he said. “Whoever solves affordability and service at scale will win the next decade."