Eureka Forbes Q3 Results: Labor code impact drags profitability but margin expands

Eureka Forbes Ltd., on Wednesday, February 4, reported a sharp drop in December-quarter profit after booking a one-time charge linked to the new labour codes, even as operating performance remained steady and margins expanded.

The consumer durables maker posted a 71.4% year-on-year drop in its consolidated net profit of ₹10.02 crore in the December quarter, down from the ₹35.04 crore it reported during the same period last year.

The bottom line was weighed down by an exceptional loss of ₹40.44 crore, which the company said relates to the estimated incremental impact on retiral benefits arising from the new labour codes, including provisions for gratuity and compensated leave liabilities.

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Excluding the exceptional item, profitability before tax remained healthy. Profit before exceptional items and tax stood at ₹54.1 crore.

Revenue from operations grew 8% year-on-year to ₹645.4 crore in the December quarter, up from ₹597.7 crore, driven by steady demand across its health and hygiene product portfolio.

Operating performance strengthened during the quarter, with EBITDA rising 16.3% from the year-ago period to ₹68.5 crore from ₹59 crore. As a result, EBITDA margin improved to 10.6% from 9.8% in the year-ago period, reflecting operating leverage and cost efficiencies.

For the nine months ended December 31, 2025, consolidated revenue rose to ₹2,025 crore from ₹1,824 crore a year ago, while profit after tax stood at ₹111.6 crore, broadly flat compared with ₹114.9 crore in the corresponding period last year, impacted by the exceptional charge booked during the year.

Eureka Forbes said the labour code-related impact is regulatory-driven and non-recurring in nature, and the company will continue to monitor further clarifications and rules to be notified by authorities.

Despite the steady operating performance, the shares of Eureka Forbes are trading 4% lower after the earnings announcement, currently trading at ₹524.