EMIL - Electronics Mart

📊 NSE: EMIL 🏢 Trading 📅 Last Updated: 12/13/2025 21:47

💰 Financial Performance

Revenue Growth by Segment

Revenue for Q2 FY26 was INR 1,591.0 Cr, representing a 12.7% increase from INR 1,411.0 Cr in Q2 FY25. H1 FY26 revenue reached INR 3,330.4 Cr, up 2.1% from INR 3,262.1 Cr YoY. Product mix for Q2 FY26 consisted of Large Appliances at 48%, Mobiles at 38%, and Small Appliances/IT/Others at 14%. Large appliance sales were temporarily hindered by a 22-day slowdown due to GST rate anticipation.

Geographic Revenue Split

The company is the largest electronics retailer in South India, with a dominant presence in Telangana and Andhra Pradesh. The North Cluster (NCR) contributed INR 162 Cr in revenue during H1 FY26, showing aggressive scaling with 31 MBOs and 1 EBO across 5 cities. Mature stores (84 units) contributed INR 2,254 Cr in H1 FY26, while newer stores (131 units) contributed INR 933 Cr.

Profitability Margins

Gross Margin for H1 FY26 was 14.3%, a decline from 15.2% in H1 FY25, primarily due to higher discounting and a shift in sales mix toward lower-margin mobiles. PAT Margin for Q2 FY26 stood at 1.0% (INR 16.1 Cr), which includes exceptional gains. H1 FY26 PAT Margin was 1.1% (INR 38 Cr).

EBITDA Margin

EBITDA Margin for Q2 FY26 was 5.1% (INR 82 Cr) compared to 5.6% (INR 79.1 Cr) in Q2 FY25. H1 FY26 EBITDA Margin was 5.8% (INR 192 Cr). Pre-IndAS 116 EBITDA margin for H1 FY26 was 3.7%. Profitability is currently suppressed by the rapid addition of 75 stores since H1 FY24, which are yet to reach full cost absorption.

Capital Expenditure

Historical Property, Plant & Equipment (PPE) stood at INR 905.1 Cr as of March 2025, increasing to INR 987.4 Cr by September 2025. The company raised INR 500 Cr via IPO in October 2022 to fuel its cluster-based expansion strategy.

Credit Rating & Borrowing

Finance costs for H1 FY26 rose to INR 75.9 Cr from INR 51.0 Cr YoY, a 48.8% increase. This rise is attributed to higher borrowing for expansion and the impact of IndAS 116 lease accounting on a rapidly growing store network.

⚙️ Operational Drivers

Raw Materials

As a retailer, the primary cost is 'Purchases of stock in trade', which accounted for INR 2,821.5 Cr (84.7% of revenue) in H1 FY26. Key product categories include Air Conditioners, Mobiles, and Large Appliances.

Import Sources

Not disclosed; however, the company sources finished goods from global and domestic consumer durable brands operating in India.

Key Suppliers

The company maintains long-term relationships with marquee brands. The top 5 brands account for approximately 61% of total sales as of FY25, down slightly from 64.8% in FY21, indicating a diversifying supplier base.

Capacity Expansion

Current store count is 215 stores as of Q2 FY26. The company added 8 net stores in Q2 FY26 (9 gross openings minus 1 divestment). 131 stores are less than 4 years old (average age 1.9 years), representing significant 'embedded' growth as they mature.

Raw Material Costs

Purchase costs increased 1.5% YoY to INR 2,821.5 Cr in H1 FY26. Procurement is managed through strategically located logistics and warehousing facilities using IT-driven replenishment to optimize stock turns.

Manufacturing Efficiency

Not applicable as a retail entity. Efficiency is measured by 'Average Ticket Size', which was INR 22,479 in Q2 FY26, and 'Bill Cuts', which totaled 678,000 in the same period.

Logistics & Distribution

Distribution and other expenses represented 6.3% of revenue in H1 FY26. The company is focusing on technology-driven replenishment to accelerate inventory rotation.

📈 Strategic Growth

Expected Growth Rate

10-12%

Growth Strategy

Growth will be driven by the maturation of 131 'non-mature' stores which currently operate at only 3.0% EBITDA margin compared to 6.8% for mature stores. EMIL is also scaling aggressively in the NCR and Western UP markets through a cluster-based strategy to capture shifts from unorganized to organized retail.

Products & Services

Mobiles, Air Conditioners, Televisions, Refrigerators, Washing Machines, Laptops, and Small Home Appliances.

Brand Portfolio

Electronics Mart, Bajaj Electronics, IQ (divested 4 stores but remains a partner), and various Multi-Brand Outlet (MBO) formats.

New Products/Services

Expansion into newer clusters like Western UP and deepening penetration in the NCR region are expected to contribute to the low double-digit growth target.

Market Expansion

The company added 75 stores since H1 FY24. Future expansion focuses on the North Cluster (NCR) and Western UP, targeting unorganized segments.

Market Share & Ranking

Ranked as the 4th largest consumer durable and electronics retailer in India and the largest in South India.

Strategic Alliances

Maintains partnerships with leading global brands for live demos and brand-led events in MBO formats. Recently divested 4 IQ Apple stores to refocus on core multi-brand scalability.

🌍 External Factors

Industry Trends

Clear shift from unorganized to organized retail in India. The industry is seeing a rebound in demand following GST rate reductions on select categories, with strong festive season momentum noted in October.

Competitive Landscape

Competes with other large-format retailers (Reliance Digital, Croma) and unorganized local players. EMIL's advantage is its high revenue productivity in established clusters.

Competitive Moat

Moat is built on a 4-decade legacy, cluster-based dominance in South India (providing logistics and marketing leverage), and deep relationships with marquee brands that ensure access to the latest product launches.

Macro Economic Sensitivity

Highly sensitive to GST policy changes and seasonal weather patterns. The 22-day GST-related slowdown shifted the sales mix toward lower-margin IT/Mobiles, squeezing Q2 margins.

Consumer Behavior

Increasing preference for organized retail offering live demos and consultative selling. Consumers showed high price sensitivity in Q2, deferring purchases in anticipation of GST cuts.

Geopolitical Risks

Indirect exposure through global supply chain disruptions affecting brand availability and pricing of electronics.

⚖️ Regulatory & Governance

Industry Regulations

Operations are significantly impacted by GST rate classifications on consumer durables. A 22-day period of uncertainty regarding GST rates led to a significant deferment of large appliance purchases in Q2 FY26.

Environmental Compliance

Not specifically disclosed in financial terms.

Taxation Policy Impact

Effective tax rate for H1 FY26 was approximately 25.3% (INR 12.8 Cr tax on INR 50.5 Cr PBT).

Legal Contingencies

The company successfully settled an insurance claim of INR 8 Cr related to a godown fire accident that occurred on May 29, 2025.

⚠️ Risk Analysis

Key Uncertainties

Seasonality risk is high; a 'bad summer' can significantly impact annual EBITDA due to poor AC sales. Rapid expansion risks include a temporary dip in ROCE (9.8% in H1 FY26) until new stores mature.

Geographic Concentration Risk

High concentration in South India, though the North Cluster expansion is mitigating this. NCR now contributes INR 162 Cr (approx. 4.8% of H1 revenue).