Buy Electronics Mart India; target of Rs 151: LKP Research

LKP Research's research report on Electronics Mart India

Electronics Mart India Ltd (EMIL) reported modest numbers as ASPs have been dropping in some technology categories due to depreciation and increasing volume. Revenue grew by 12.8% YoY to ₹17.2 bn in Q4 FY’25 led by large appliances (+15.2% YoY) contributing ~47% to the topline. EMIL reached a milestone of 200 stores (189 MBO/11 EBO) with addition of 8/40 stores in Q4/FY25. Further management expects to add more 25-30 stores in FY’26 and continue the momentum. SSSG stood at 1.5%/6.1% in Q4/FY25. EMIL saw strong Q4 FY25 growth across regions, led by Delhi NCR with revenue of ₹1.2 bn (+66% YoY) while SSSG stood at 33.8% and upcountry expansions, while Hyderabad faced a decline in SSSG (-0.9%) and marginal increase in revenue (+4% YoY) due to subdued demand from tighter credit, real estate slowdown, and rising inflation. Delayed summer season due to early rains has impacted cooling product sales, leading to slightly higher inventory levels—particularly for AC’s—which management expects to carry forward for a few months, with redistribution from South to North to meet regional demand.

Outlook

Given the government’s decision to cut taxes in order to stimulate consumer spending; along with EMIL management’s well-defined expansion strategy and the anticipated rise in ASPs of appliances, we believe EMIL is well-positioned to capitalize on growing consumer demand. Accordingly, we maintain a BUY rating to EMIL, with a TP of ₹151, based on a 22x multiple of FY27E EPS.