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Incorporated in 1980, Electronics Mart India Limited (EMIL) is the 4th largest consumer durable and electronics retailer in India. The company offers a diversified range of products with a focus on large appliances (air conditioners, televisions, washing machines and refrigerators), mobiles and small appliances, IT and others. The company's offering includes more than 6,000 SKUs (stock keeping units) across product categories from more than 70 consumer durable and electronic brands.

Positives: (a) 4th largest consumer durable and electronics retailer in India with a leadership position in South India (b) Consistent track record of growth and industry leading profitability (c) Increasing market presence and geographic reach with cluster-based expansion

Investment concerns: (a) High geographic concentration risk (b) High competition from online retailers (c) High dependence on limited number of brands

Outlook & Valuation:

In terms of valuations, the post-issue P/E works out to 21.8x FY22 EPS (at the upper end of the issue price band) which is low compared to its peer Aditya Vision Ltd. Further, EMIL has better revenue growth (CAGR of 17%) over 2 years, better return on equity and expansion plan on the cards. Considering all the positive factors, we believe this valuation is at reasonable levels. Thus, we recommend a SUBSCRIBE rating on the issue.

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