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Key Highlights

* Company Background: Electronics Mart India Ltd (EMI) is the 4th largest and one of the fastest growing consumer durables and electronics retailers in India and as of FY21. They are the largest regional organized player in the southern region in revenue terms with dominance in the states of Telangana and Andhra Pradesh. As on August 31, 2022, it had 112 stores across 36 cities with a retail business area of 1.12 million sq. ft.

* Flexible business model: EMI have a flexible business model wherein they own or lease property according to the availability, cost and area. The company’s strategy is to build a brand in the given area as well as build long term relationships with customers. Besides, this model will also help in optimizing cost and improve profitability

* Diversified product portfolio: EMI offers their customers a wide product range across multiple categories, brands, price points to ensure that their customers have a range of product options to choose from and is able to make the value buy decision. Also they ensure that latest products and new launches are available in their stores. Further, they classify products internally into three broad categories such as large appliances, mobiles, and small appliances, IT and others. They earn ~54% from large appliances, followed by mobiles which contribute 31% while small appliances, IT and Others are remaining 15%

* Increasing market presence and geographic reach with cluster-based expansion: EMI follows a cluster based approach wherein they expand their network in the particular market until they reach substantial depth & scale. With this approach, the company will be able to increase penetration, cater to the demand of the target customers as well as increase brand presence in the particular market.

* Plans going ahead: EMI aim is to expand footprints in existing markets as well as across select geographies. Besides, their focus remains on increasing revenue by launching value for money products as well as maintaining standards of existing products. Apart from this, their focus is on building a team and retaining manpower, so their aim is to identify fresh talent, train & groom them and provide opportunities for growth.

* Financials: On a financial front, the company’s revenue/PAT grew by 17%/8% CAGR between FY20-22.

* Risk: 1) Competition intensity is high across industry 2) High concentration in the south region.

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