💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue for Q2 FY26 was INR 445 Cr, a 14.1% decline YoY from INR 518 Cr but a 7% QoQ growth from INR 416 Cr. Spencer's segment revenue grew 9% QoQ to INR 376 Cr, while Nature's Basket revenue declined 1% QoQ to INR 68 Cr. The online segment (Jiffy) delivered INR 52.5 Cr, representing 30% QoQ growth and 50%+ YoY growth.

Geographic Revenue Split

The company has consolidated its geographic focus, exiting high-loss regions in Q2 last year to focus on core markets like West Bengal and Lucknow. West Bengal is a primary driver, with store productivity targets of INR 2,200-2,300 per sq ft compared to the current consolidated level of INR 1,600+ per sq ft.

Profitability Margins

Consolidated Gross Margin improved significantly to 21.0% in Q2 FY26 from 17.3% in Q2 LY (up 370 bps). Spencer's segment gross margin was 19.6% (up 50 bps QoQ), while Nature's Basket maintained a higher margin of 27.6%. Operating expenses were reduced by over INR 30 Cr YoY, with employee costs down 32% to INR 34 Cr and other expenses down 26% to INR 63 Cr.

EBITDA Margin

Consolidated EBITDA for Q2 FY26 was INR 5 Cr (0.6% margin), a 69% decline from INR 16 Cr (3.1% margin) in Q2 LY. This decline was primarily due to a 94% drop in other income (INR 4 Cr vs INR 61 Cr) and higher marketing investments for the Jiffy online platform. Spencer's segment EBITDA was INR 13 Cr, while Nature's Basket reported a slight negative EBITDA of INR -0.6 Cr.

Capital Expenditure

The company is not planning significant store additions, focusing instead on 'getting the maximum juice' from its existing 90 stores. Investments are being prioritized for the online business (Jiffy) tech platform and regional marketing. Specific INR Cr values for planned CAPEX were not disclosed.

Credit Rating & Borrowing

CARE Ratings reaffirmed a 'CARE BBB-; Stable' rating for long-term bank facilities (INR 371.08 Cr) and 'CARE A3' for short-term facilities (INR 235.00 Cr) as of January 14, 2025. Finance costs for Q2 FY26 were INR 41 Cr, up 2.5% YoY.

⚙️ Operational Drivers

Raw Materials

As a retail entity, Cost of Goods Sold (COGS) represents the primary input cost, totaling INR 352 Cr in Q2 FY26, which is 79.1% of total revenue. This includes groceries, staples, fresh produce, and non-discretionary consumer goods.

Capacity Expansion

Current store count is 90 stores as of September 30, 2025, down from 98 stores in the previous year due to regional consolidation. The company aims to increase sales per sq ft from the current INR 1,600+ to INR 2,000 within the financial year and INR 2,200-2,300 by the end of next year.

Raw Material Costs

COGS was INR 352 Cr (79.1% of revenue) in Q2 FY26, compared to INR 428 Cr (82.6% of revenue) in Q2 LY. The reduction in COGS as a percentage of revenue drove the 370 bps improvement in gross margin.

Manufacturing Efficiency

Sales per square foot, a key retail efficiency metric, improved to INR 1,600+ in Q2 FY26 from INR 1,500 in Q1 of the previous year. Store-level EBITDA for Spencer's is targeted at 7-7.5% based on an 11% store opex (rentals and operations).

Logistics & Distribution

The company pivoted to a 30-minute delivery model under the Jiffy brand, currently delivering 8,000 orders per day with an average order value (AOV) of INR 750+.

📈 Strategic Growth

Expected Growth Rate

25%

Growth Strategy

Growth will be driven by scaling the Jiffy online platform from 8,000 to 10,000 orders per day, targeting a monthly turnover of INR 21-22 Cr. The company is also focusing on high-productivity clusters like West Bengal and Lucknow, aiming for store productivity of INR 2,300 per sq ft and business-level EBITDA of 2-3% for Spencer's.

Products & Services

Groceries, fresh produce, staples, and non-discretionary consumer goods sold through offline stores and the Jiffy 30-minute delivery app.

Brand Portfolio

Spencer's, Nature's Basket, Jiffy.

New Products/Services

The Jiffy 30-minute delivery service, launched approximately 6 months ago, is the primary new service driver, already contributing INR 52.5 Cr in quarterly revenue.

Market Expansion

Focus is on deepening penetration in West Bengal and Lucknow rather than broad geographic expansion. The company aims to cross INR 2,200-2,300 sales per sq ft in these regions by the end of next financial year.

🌍 External Factors

Industry Trends

The retail industry is shifting toward quick commerce. While some players offer 10-minute delivery with high losses, Spencer's has positioned Jiffy as a 30-minute delivery proposition to balance growth with measured losses.

Competitive Landscape

Intense competition from both brick-and-mortar and online players. Key threat from e-commerce players and potential changes in FDI norms.

Competitive Moat

The company's moat lies in its strong regional presence in West Bengal and the premium positioning of Nature's Basket (AOV INR 750+). Sustainability depends on achieving the targeted 2-3% business EBITDA through store optimization.

Macro Economic Sensitivity

The business sees natural consumption tailwinds from major festivals like Diwali and year-end celebrations, particularly in West Bengal, which are expected to drive a stronger Q3.

Consumer Behavior

Consumers are rapidly migrating to online and quick delivery models, prompting the company's pivot to the Jiffy 30-minute delivery platform.

⚖️ Regulatory & Governance

Industry Regulations

The company monitors changes in FDI norms in the retailing industry, which could further intensify competition from international players.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the company's ability to fund continuous cash losses and debt obligations without further equity infusion from the promoter group, given the erosion of net worth.

Geographic Concentration Risk

High revenue concentration in West Bengal and Lucknow makes the company sensitive to regional economic shifts and local competition.

Technology Obsolescence Risk

The company faces the risk of its 30-minute delivery model being outpaced by 10-minute quick commerce competitors if consumer expectations shift further.

Credit & Counterparty Risk

Not applicable for a B2C retail business.