Eureka Forbes Surges as Block Deal Boosts Investor Confidence

Eureka Forbes Surges as Block Deal Boosts Investor Confidence: Eureka Forbes, renowned for its water filters, witnessed a remarkable surge in its share price, rising by 6.66 per cent to Rs 544 in the opening trade. This surge came following reports of a block deal where 9.3 per cent equity changed hands during the pre-opening session.

The block deal, valued at Rs 1,150 crore, was executed at a floor price of Rs 494.75 per share, representing a slight discount to the previous day’s closing price of Rs 510. The deal involved the promoter entity Lunolux divesting its 12 per cent stake in the company.

Eureka Forbes recently released its Q3FY24 results, demonstrating strong performance. The company reported a 14.1 per cent year-on-year increase in revenue, reaching Rs 538.6 crore. The adjusted EBITDA saw a substantial growth of 28.6 per cent compared to the same quarter last year, amounting to Rs 52.9 crore, with the adjusted EBITDA margin also showing improvement.

Eureka Forbes Surges as Block Deal Boosts Investor Confidence.

The profit after tax (PAT) soared by an impressive 131.3 per cent YoY, settling at Rs 22.7 crore. Adjusted for pre-ESOP expenses, the PAT surged by 213.5 per cent YoY to Rs 30.7 crore.

Despite the company’s steady performance, its stock has yielded a modest return of just over 4 per cent, lagging behind the Nifty’s return of 24 per cent. Trading at a high price-to-earnings ratio of 102.5, Eureka Forbes has received a ‘buy’ recommendation from four analysts, with three suggesting a ‘strong buy’. The average 1-year target for the stock is set at Rs 625, indicating a potential upside of 24 per cent, according to Trendlyne data.