Q1 2027 Electronics Mart India Ltd Earnings Call Transcript
Key Points
- Revenue grew 39% YoY to INR2,419 crore, with EBITDA up 118% to INR239 crore and PAT up 458% to INR121 crore, marking the strongest quarter to date.
- Same-store sales growth (SSG) reached 34.2%, driven by strong demand in core markets, with Andhra Pradesh growing 62% and Telangana up 48%.
- Gross margin expanded to 17.2% from 14.6% YoY, supported by a strong AC season and price increases in IT products.
- Working capital days reduced sharply to 42 days from 73 days, and working capital borrowings dropped from INR658 crore to INR97 crore during the quarter.
- Non-matured stores (under 4 years) delivered an 8.1% EBITDA margin, up from prior levels, indicating faster-than-expected ramp-up and embedded margin improvement potential.
- North Cluster EBITDA margin improved to a record 4.9%, showing progress toward the South Cluster benchmark.
- Plans to enter West Bengal with 10-12 stores by FY27-end, targeting 30 stores in the region over the next two years, with a faster payback expected than in the North.
- The strong AC season and price hike benefits are partly temporary, with management noting that gross margin gains from price increases may not be permanent.
- North Cluster SSG was lower due to a weak summer in Delhi NCR, where cooling product sales were negative, impacting overall performance.
- Mobile phones contributed 39% of revenue, down from 40% YoY, as the category faced price increases and supply constraints from memory chip shortages.
- Management guided for a conservative 18-20% revenue growth for FY27, implying a significant slowdown from the 39% growth in Q1.
- EBITDA margin guidance for FY27 is 7-8%, below the 9.9% achieved in Q1, indicating normalization is expected.
- Expansion into West Bengal involves significant CapEx (INR50 crore for property purchases) and operational risks in a new market.
- The company remains cautious on franchisee models, limiting faster expansion potential, and faces competition from online players in low-ASP categories.
Ladies and gentlemen, good day and welcome to the Electronics Mart India Limited Q1 FY27 Earnings Conference Call.
Before we begin to the conference, as we disclaimer, this conference call may contain forward-looking statements about the company which are based on beliefs, opinions and expectations of the company above the date of this call.
These statements are now the guarantees of future performance and involve risks and uncertainties that are difficult to predict.
As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions at the end of today's presentation.
Should you need assistance during the conference call, please signal an operator by pressing *0 on your touchstone phone.
Please note that this conference is being recorded. I would now like to hand the conference over to Mr. Karan Bajaj, Chief Executive Officer from Electronics Mart India Limited.
Thank you and over to you, sir.
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