Eureka Forbes filters bring first-time water purifier buyers

Eureka Forbes says its two- and four-year filter-life water purifiers are attracting first-time category entrants by reducing ownership costs and uncertainty, while supporting higher lifetime value through on-network service and replacements. Management made that case after H1 revenue grew 15.1%, compared with 12.7% in the prior-year H1, and water-purifier sales rose in the high teens.

How are longer-life filters bringing first-time buyers?

Eureka Forbes says its two-year filter range is bringing new households into water purifiers because it reduces replacement frequency, service interventions and lifetime ownership cost. The company launched products with two-year filter life over the previous 15 months, and management said they had grown into a large and increasing share of overall revenue and product mix.

The four-year purifier, launched in Q2 through modern trade and e-commerce, is aimed specifically at consumers who consider recurring costs uncertain or outside their control. Eureka Forbes says the product carries an unconditional warranty on both parts and filters, giving buyers visibility over ownership costs for four years. Management supported the Q2 launch with point-of-sale displays and influencer-led digital campaigns and described the initial response as encouraging.

Management said a dominant share of customers buying the broader two-year range were first-time category entrants. Eureka Forbes interprets that profile as evidence that predictable costs can remove a category-entry barrier for non-users. The proposition also gives owners replacing an older purifier a reason to move to a product with lower ownership costs and fewer filter-change requirements.

Why does Eureka Forbes expect higher lifetime value from filters?

Eureka Forbes expects two-year filters to increase customer lifetime value because there is currently no parallel or grey-market replacement filter for this newer product range. At the two-year replacement point, management said the company has a meaningfully greater chance of converting the customer to an AMC, or maintenance contract, or a genuine filter replacement than it would with a one-year filter. It did not disclose conversion rates or a monetary lifetime-value estimate.

Management attributed the lack of a parallel market partly to the product range's recent introduction and still-developing installed base. It also said independent suppliers depend on frequent replacements and customer contact, while a two-year filter reduces both compared with a one-year alternative. Management acknowledged that alternatives could eventually emerge, but argued that their longer replacement cycle runs against the parallel market's existing business model.

Eureka Forbes also said longer filter life could delay some warranty-to-AMC conversions, an issue raised by an analyst during the call. Management's response was that contract renewals and out-of-warranty customers opting for contracts contribute significantly more to AMC revenue than warranty-to-contract customers. It added that its legacy installed base continues to provide filter and service opportunities, with filter growth accelerating in Q2 from Q1.

What is Eureka Forbes doing to rebuild service growth?

Eureka Forbes said Q2 service performance was broadly in line with the preceding quarter, partly because customers were still absorbing earlier AMC price increases amid wider inflationary pressures. Water-purifier prices rose about 5% to 6% in April, while AMC prices increased by roughly 3% to 10%. Management said it had not taken additional price increases after April when the call took place.

The company has begun a nationwide pre-filter check campaign, allowing technicians to verify whether a customer's filter is genuine and offer a replacement if needed. It has also added a customer contact point six months after an AMC, including a free home service visit intended to create either a contract or filter opportunity. Management said the programmes were beginning to work but gave no revenue, conversion or customer-reach figures.

For customers outside warranty or an AMC, Eureka Forbes has introduced Aquaguard Express Care, which promises same-day service and, in some cases, service within four hours. The company also launched a heavy metal removal, or HMR, filter for ultraviolet, or UV, devices. Management said the HMR filter removes heavy metals that would otherwise require a reverse-osmosis, or RO, purifier, creating another filter-led engagement route.

How does the filter strategy fit Eureka Forbes' growth plan?

Eureka Forbes reported H1 growth of 15.1%, a step up from 12.7% in the prior-year H1, while water purifiers grew in the high teens. Management said growth was volume-led, with mix and pricing also contributing, and that emerging categories grew faster than water purifiers. It linked purifier growth to innovations including two- and four-year filter products, Internet of Things-enabled models and stainless-steel tank purifiers.

Management said H1 growth was supported by strong sell-out, tertiary sales and secondary sales, with normal inventory built ahead of the festive period. It expects growth to accelerate in H2 from the 15.1% H1 rate, based on Q2 and early festive-period sales momentum. That is management's outlook rather than a reported result, and it depends on continued sell-out rather than inventory accumulation.

Eureka Forbes said advertising and sales-promotion spending in H1 grew faster than the 15.1% revenue increase. A larger share of the additional expenditure went to sales promotions, including more in-store promoters, point-of-sale visibility and fixtures. Campaigns covered filter awareness, robotic cleaners, water softeners and influencer marketing, linking retail execution with efforts to explain longer-life filter benefits to consumers.

What are the pricing and margin effects of the strategy?

Eureka Forbes plans a 3% to 4% price increase after Diwali, effective in mid-November, after delaying additional pricing during the festive season. Management said commodity costs had been volatile and that the action needed to balance margin requirements with the company's growth trajectory. It expects only a partial benefit in Q3, with the full impact arriving in Q4.

Management said H1 margins were flat year on year, matching its stated objective of stepping up growth while holding margins flat. It continues to target flat full-year margins, despite expecting a transitional Q3 effect before the mid-November price increase is fully reflected in Q4. The company also said Q2 working-capital deployment is typically higher because of monsoon demand, pre-festive billing by September and standard credit terms in modern trade and e-commerce.

Conclusion

Eureka Forbes is positioning two- and four-year filter-life products as a way to expand water-purifier penetration while retaining more subsequent replacement and service revenue within its own network. The strategy aligns with H1 revenue growth of 15.1%, versus 12.7% a year earlier, and high-teen water-purifier growth, but management has not disclosed product-level sales, AMC conversion rates or the value of the claimed lifetime-value increase.

The next evidence point is whether the Q2 four-year launch continues gaining traction in modern trade and e-commerce and whether service actions lift filter and AMC revenue. Management said pilots showing promise could be scaled over the next three to six months, while the full margin effect of its 3% to 4% mid-November price increase is expected in Q4.