Electronics Mart India Ltd Management Discussions

Economic Overview

Global Economy

The global economy continues to demonstrate endurance despite ongoing geopolitical tensions, inflationary pressures, and supply chain disruptions. A case in point is the imposition of steep U.S. tariffs on imports from major trading partners, which has added cost pressures and heightened uncertainty in global commerce. Even so, moderate economic growth rates of around 3.30% in 2024 and early 2025, reflect underlying strength. This momentum stems largely from strong domestic demand across South Asia and Latin America. Moreover, adaptive monetary policies by central banks and robust performance in the services sector continue to contribute to the economys ability to navigate these turbulent times effectively.

Although the global economy continues to demonstrate resilience, growth is expected to vary across regions. Emerging economies are anticipated to outpace advanced ones over the next two years, supported by strong domestic demand, rising productivity, and increased investments in key sectors such as manufacturing, consumer goods and retail, agriculture and agribusiness, infrastructure, and real estate. Developing economies are projected to sustain stable growth at around 4%. In contrast, advanced economies are experiencing more moderate expansion, influenced by structural adjustments and policy shifts.

Outlook

Global GDP growth is expected to moderate, declining from 3.30% in 2024 to 2.80% in 2025, before edging up to 3% in 2026. The outlook remains vulnerable to several factors, including trade tensions, geopolitical uncertainty, rising protectionism, and the possibility of higher tariffs, all of which could slow the pace of global trade.

Indian Economy

The Indian economy continues to exhibit strength amid global challenges, with a projected growth of 6.40% in 2024-25, moderating from 8.20% in the prior year. This strength is underpinned by strong domestic demand, an expanding working-age population, and increased consumer spending, especially in rural regions. Favourable monsoons have supported agricultural output, further boosting rural demand. Additionally, the easing of inflation has created a conducive environment for economic activity.

Private consumption remains a key driver of growth, with Private Final Consumption Expenditure (PFCE) expected to grow at 7.30% in 2024-25, up from 4% in 2023-24. Government spending is also playing a supportive role, with Indias Government Final Consumption Expenditure (GFCE) reported at Rs. 33,30,598 Crores in 2025. It is expected to rise further to Rs. 40,372.13 Billion in 2026. These trends are strengthening purchasing power and fuelling demand across goods and services. Inflation remains well-managed, dropping to 4.60% in 2024-25 and staying within the RBIs comfort range. In response, the RBI had adopted an accommodative monetary policy stance, cutting rates for the first time in nearly five years. Since then, the RBI has brought the repo rate down to 5.5% from 6.5%, before shifting the stance back to neutral.

Sectoral contributions remain strong, with the services sector projected to grow by 7.20% in 2024-25, led by IT and finance. Rapid digital transformation, marked by the deployment of 5G networks, presents significant growth avenues in technology-led industries. In addition, agriculture continues to serve as a vital economic pillar. Record Kharif production has boosted rural incomes and stimulated demand for various products, aligning with strategies to expand rural market presence.

The government remains committed to enhancing connectivity between rural and urban regions, as well as within these areas, by prioritising infrastructure development. Significant investments in railways, roads, and ports are expected to lower logistics costs and improve supply chain efficiency. These upgrades aim to alleviate operational bottlenecks and drive economic growth through improved connectivity.

Indias dedication to renewable energy and sustainable technologies further strengthens its position on the global stage. Continued investments in clean energy projects and digital transformation are anticipated to propel long-term growth. This strategic focus on infrastructure and sustainable technologies supports current economic growth and lays the groundwork for future resilience and competitiveness.

Outlook

The economic outlook for India remains optimistic, fuelled by robust public and private capital expenditure. In particular, significant investments in infrastructure, digital connectivity, and social projects underpin this growth. Moreover, steady progress in household consumption, fuelled by rising incomes and government initiatives to increase disposable income, further reinforces this momentum. However, challenges such as a decline in manufacturing activity, lower government spending, and global trade disruptions remain. Despite these risks, Indias economy is expected to demonstrate endurance, with growth forecasts ranging between 6.30% to 6.80% for 2025-26.

(Sources: https://economictimes.com/news/economy/indicators/indian-economy-likely-to-be-a-little-weaker-in-2025-imf-md/articleshow/117137315. cms https://www.business-standard.com/industry/news/appliances-industry-expects-15-growth-in-2025-on-back-of-premiumisation-124123100171_1. html https://static.pib.gov.in/WriteReadData/specificdocs/documents/2024/jul/ doc2024717350401.pdf https://www.pib.gov.in/PressReleasePage.aspx?PRID=2122148 https://www.pib.gov.in/PressReleasePage.aspx?PRID=2090875&utm https://www.pib.gov.in/PressNoteDetails.aspx?NoteId=154660&ModuleId =3#:~:text=India%20is%20projected%20to%20be,goods%2C%20 electronics%2C%20and%20pharmaceuticals https://www.goldmansachs.com/insights/articles/indias-economy-is-likely-to-stand-firm-in-an-uncertain-world https://www.ey.com/en_in/industries/consumer-products/how-indias-consumer-durables-industry-can-foster-global-leadership-by-2030)

Industry Overview

Indian Consumer Durables Industry

Indias consumer durables and electronics retail sector is advancing rapidly, establishing itself as a significant contributor to the countrys economic landscape. Accounting for approximately 0.60% of Indias GDP, the sector is set for notable expansion, with projections indicating 1.5 times growth. This progress is marked by rising domestic demand, greater indigenisation, and a favourable market environment.

The market is projected to reach Rs. 5,00,000 Crores by 2029–30 and rank as the fourth-largest globally by 2027. This acceleration stems from rising consumer incomes, rapid urbanisation, and evolving aspirations for a better quality of life. Consumers are also gravitating towards premium, energy-efficient, and smart appliances that combine advanced functionality with enhanced lifestyle appeal. This shift in preferences continues to strengthen the sectors growth trajectory.

Another significant contributor to this growth has been increased consumer spending. Private consumption in India has nearly doubled, increasing from US$ 1 Trillion in 2013 to US$ 2.1 Trillion in 2024. This expansion has outpaced leading global economies, including the US, China and Germany. A growing middle class continues to accelerate this surge, with the number of Indians earning over US$ 10,000 annually expected to nearly triple from 60 Million in 2024 to 165 Million by 2030. Per capita income is also projected to exceed US$ 4,000 by 2030, enabling greater discretionary spending across categories such as electronics and home appliances.

The rise in digital and financial inclusion is further amplifying this trend. Greater access to credit through retail lending, credit cards, and personal loans, alongside the increasing penetration of digital payment platforms, is driving consumer purchases, particularly for high-value and premium products. Organised retail formats and experience-led consumption are also gaining traction, making shopping more engaging and aspirational. In response to these evolving dynamics, companies are expanding their distribution networks to reach Tier-II, Tier-III cities, and rural markets. Simultaneously, they are strengthening digital infrastructure to deliver seamless online shopping experiences, financing options, and personalised after-sales service, laying the foundation for stable omnichannel growth.

Sustainability is also gaining prominence as a strategic priority. Consumers now favour energy-efficient and environmentally conscious appliances, driven by rising ecological awareness and evolving consumer expectations. Moving forward, balancing affordability with innovation and quality, enhancing supply chain resilience, and ensuring timely product availability will be essential to capitalising on this momentum and sustaining long-term growth.

Projected Demand for Consumer Electronics to Reach

US$ 21.18 Billion by 2025

(Sources: https://www.millenniumpost.in/business/pvt-consumption-in-india-almost-doubled-to-21-trillion-in-2024-600470 https://www.business-standard.com/industry/news/appliances-industry-expects-15-growth-in-2025-on-back-of-premiumisation-124123100171_1. html https://www.business-standard.com/industry/news/india-s-consumer-durables-market-to-be-world-s-4th-largest-by-2027-cii-124093000277_1.html https://www.weforum.org/stories/2019/01/10-mega-trends-for-india-in-2030-the-future-of-consumption-in-one-of-the-fastest-growing-consumer-markets/ https://timesofindia.indiatimes.com/blogs/voices/consumer-durable-market-in-india-and-growth-opportunities/ https://economictimes.indiatimes.com/news/economy/indicators/how-india-bought-craved-and-consumed-in-2024/articleshow/116618812.cms https://www.ey.com/en_in/industries/consumer-products/how-indias-consumer-durables-industry-can-foster-global-leadership-by-2030)

Company Overview

Electronics Mart India Limited (hereafter referred to as ‘EMIL or ‘The Company) has established itself as a prominent player in Indias consumer durables and electronics retail sector. Since our establishment in 1980, we have grown into the nations fourth-largest retailer in this segment, earning a strong reputation for reliability, quality and innovation.

We began our journey with a single store in Hyderabad, entering the consumer durables and electronics retail sector. Over time, we expanded rapidly to become South Indias highest revenue-generating retailer by 2020-21, with strongholds in Telangana and Andhra Pradesh. As of 31st March 2025, we have extended our presence to 82 cities in India, with a growing network of 200 retail stores.

Driven by our commitment to steady expansion, the Company grew its retail footprint from 1.48 Million square feet in 2023-24 to 1.76 Million square feet as of 31st March 2025. To serve a diverse customer base, we operate across three key channels: retail, wholesale, and e-commerce. Of these, retail accounts for 99% of our revenue, while wholesale and e-commerce contribute the remaining 1%.

Guided by our commitment to make technology accessible to every Indian household, we offer a wide range of quality products at competitive prices. Our portfolio features over 8,000+ Stock Keeping Units (SKUs) from top consumer durable and electronic brands, encompassing mobile devices, laptops, home and kitchen appliances, home entertainment systems, and personal care products. With a sharp customer focus and dedication to innovation, we continue to transform the retail experience for customers across the nation.

Our recent partnership with The Charcoal Project has added luxury home interior solutions to our portfolio. Through this collaboration, we bring our customers an exclusive range of premium offerings from renowned designers. Additionally, this association enhances our portfolio and enables us to serve diverse preferences with wider variety and choice.

Key Strategies

Expanding Reach in Key Markets and Strengthening Presence

Deepening our presence in existing clusters and expanding into new geographies through a peripheral and concentric approach, we are focussed on enhancing market share in existing markets along with capturing untapped opportunities. This dual-track approach demands foresight, agility, and a deep understanding of local dynamics, capabilities that EMIL consistently demonstrates to strengthen its competitive position.

Building and Strengthening Partnerships with Leading Brands

Building and nurturing strong relationships with top brands is fundamental to long-term success. By fostering partnerships based on shared values and mutual growth, we enhance our market presence and deliver superior offerings to customers.

Adopting Technology for Smarter Inventory Management and Operational

Efficiency

Embracing advanced technology in our inventory management and streamlining operations through a lean business model enables us to respond swiftly to market shifts and drive sustainable growth. Moreover, by minimising waste and optimising resources, we enhance efficiency and create greater value for customers and stakeholders.

Driving Sales Growth through Customer-Centric Excellence

Our continuous dedication to customer satisfaction is a driving force behind our sales growth and brand loyalty. In addition, by offering exceptional experiences and continuously enhancing value at every touchpoint, we build lasting relationships and drive long-term success.

Investing in Continuous Workforce Development

In a fast-evolving market, a skilled and engaged workforce is essential for success. That is why we invest in employee training to enhance performance, foster innovation, and ensure we remain agile and competitive in a dynamic business arena.

Expanding Service Offerings with Specialty Stores

Enhancing our retail experience through specialty stores allows us to integrate tailored services alongside our product offerings. Furthermore, by providing expert guidance, personalised solutions, and value-added services, we strengthen customer engagement, build brand loyalty, and create a distinctive market presence.

Opportunities

Middle-Class Growth and Rising Disposable Income

Increasing income levels and a growing middle-class population are driving demand for premium, smart, and energy-efficient electronics.

Growing brand consciousness and aspirations for upgraded lifestyles are influencing purchase decisions in urban and semi-urban markets.

Rural Market Expansion Potential

Improving infrastructure, electrification, and digital penetration in rural markets offer a vast untapped opportunity for consumer durables.

Expanding retail networks and last-mile delivery solutions are enhancing product availability in remote areas.

Threats

E-commerce and Quick Commerce Advancing Rapidly

The rise of E-commerce and now quick commerce is steadily drawing consumers away from physical stores by offering greater convenience, a wider range of choices, and competitive pricing. This shift could decrease foot traffic and sales at traditional outlets.

The growing consumer preference for seamless digital experiences, such as easy online browsing and fast, reliable home delivery, combined with aggressive pricing strategies and frequent discounts from online platforms, may undermine the relevance of physical stores.

Intense Competition and Price Sensitivity

The market is highly competitive, with global and domestic players battling for market share, leading to aggressive pricing and low-profit margins.

Consumers are price-conscious, often prioritising affordability over premium features, making it challenging for brands to push high-margin products.

Regulatory and Compliance Burdens

Stringent environmental regulations, energy efficiency norms, and e-waste management policies require continuous investment in compliance and innovation.

Frequent policy changes create uncertainty, affecting long-term business planning.

Financial Performance

In 2024-25, we achieved a total revenue from operation of Rs. 69,648.26 Million, reflecting a 11% growth from Rs. 62,854.06

Million in the previous financial year. EBITDA reached Rs. 4,505.98 Million, up from Rs. 4,495.15 Million in 2023-24. Also, Profit

After Tax (PAT) was reported at Rs. 1,600.83 Million, a slight decrease from Rs. 1,839.83 Million in 2023-24.

(in Rs. Million, unless otherwise stated)

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Particulars	2024-25	2023-24
Revenue from Operations	69,648.26	62,854.06
Growth (%)	10.81	15.42
Cost of Goods Sold	59,679.17	53,706.70
Gross Margins (%)	14.31	14.55
Employee Expenses	1,330.93	1,114.82
% to Revenue from Operations	1.91	1.77
Total Operating Expenditure	65,142.28	58,358.91
EBITDA	4,505.98	4,495.15
EBITDA Margin (%)	6.47	7.15
Finance Cost	1,175.21	1,076.73
Depreciation	1,266.91	1,056.86
Other Income	91.07	100.44
PBT	2,154.93	2,462.00
Total Tax	554.10	622.17
Profit After	1,600.83	1,839.83

Key Ratios

Particulars		2024-25	2023-24	% Change
		Per Share Data ()
Basic EPS	4.16	4.78	(13)
Face Value	10	10	-
Cash per Share	0.77	2.17	(64.5)
		Profitability Ratios (%)
EBITDA Margins	6.47	7.15	(9.50)
PBT Margins	3.09	3.92	(21.17)
PAT Margins	2.30	2.93	(21.50)
		Turnover (Ratio)
Inventory Days	5.40	6.16	(12.43)
Debtor Days	38.82	39.30	(1.23)
Creditor Days	84.94	164.66	(48.42)
		Return Ratios (%)
ROE	11.04	14.41	(23.39)
ROCE	13.64	17.61	(22.54)
		Valuation Ratios (X)
P/E	29.16	40.07	(27.23)
EV/EBITDA	14.71	17.79	(17.31)
EV/Revenue from
	0.95	1.27	(25.20)
Operations
Market Cap/Revenues	0.67	1.17	(42.69)
Price to Book Value	3.06	5.39	(43.20)
		Solvency Ratios (X)
Debt/Equity	0.64	0.52	15.38
Debt/EBITDA	2.18	1.59	37.11
Current Ratio	1.71	1.97	(13.20)
Quick Ratio	0.49	0.72	(31.94)

Risk Management

We have established a comprehensive risk management system as an integral part of our strategic and operational framework, ensuring resilience and sustainable growth in a dynamic retail environment. This system actively identifies, evaluates, and mitigates risks that may affect our operations. Our proactive approach ensures business continuity, protects our brand value, and complies with regulatory requirements by incorporating industry-leading practices. Through a well-organised, disciplined approach, our risk management policy empowers us to anticipate challenges, enforce effective controls, and steer through uncertainties with confidence. Below, we outline the key risk areas and our strategies to address them:

Insurance Risk

Potential Impact

The storage and handling of our products pose risks such as fire, theft and natural calamities, which could lead to property damage and financial losses.

Mitigation Strategy

To minimise these risks, we have secured industry-standard insurance policies for securing inventory, ocesses furniture & fixtures, and buildings, which cover our warehouses and stores. Additionally, we have engaged fire safety experts to train our employees at all locations, ensuring preparedness and risk reduction.

Competition Risk

Potential Impact

EMIL operates in a highly competitive space, competing with large-format retailers, independent outlets, and e-commerce platforms offering similar products. As a result, intense competition can impact market share and profitability.

Mitigation Strategy

We focus on strengthening relationships with leading brands to ensure access to premium products. By offering exclusive merchandise, personalised services, and a superior shopping experience, we differentiate ourselves in a competitive market.

Reputational Risk

Potential Impact

Brand reputation is crucial for customer trust and long-term growth. Any negative perception can impact customer retention, financial performance, and overall business stability.

Mitigation Strategy

We maintain a strong corporate culture, continuously pr monitorbrandperception,andrefine our to uphold our reputation, enhancing customer trust and satisfaction.

Intellectual Property Risk

Potential Impact

Unauthorised use of trademarks, copyrights, and trade secrets can undermine our brands market position and legal standing.

Mitigation Strategy

EMIL actively safeguards its intellectual property with stringent legal oversight. We have 31 registered trademarks and closely monitor new applications to challenge any conflicting registrations.

Cybersecurity and Data Protection Risk

Potential Impact

Cyber threats such as phishing, malware, and data breaches pose risks to organisational security, potentially leading to financial and reputational damage.

Mitigation Strategy

We employ advanced security protocols, including role-based access controls, firewalls, intrusion detection systems etc. Furthermore, regular cybersecurity training ensures employees stay vigilant against evolving threats.

Supply Chain Risk

Potential Impact

Disruptions in the supply chain due to geopolitical issues, supplier dependency, transportation delays, , or shortages of electronic components can lead to stockouts, delayed product launches, and revenue loss.

Mitigation Strategy

We diversify our supplier base, maintain safety stock for fast-moving products, and leverage technology to improve supply chain visibility and responsiveness. Strategic partnerships and regular supplier assessments further strengthen supply reliability.

Regulatory and Compliance Risk

Potential Impact

Non-compliance with evolving regulatory requirements can result in legal penalties, operational restrictions, or reputational harm.

Mitigation Strategy

We have a dedicated compliance team that monitors changes in applicable laws and ensures timely adherence through robust internal controls, periodic audits, and staff training programmes.

Technological Obsolescence Risk

Potential Impact

Rapid technological advancements may render certain products outdated, affecting inventory turnover and customer preferences, and leading to markdowns or unsold stock.

Mitigation Strategy

We work closely with OEMs to stay informed on product roadmaps and trends, enabling timely inventory planning and promotional strategies. Regular reviews of inventory ageing help manage obsolescence efficiently.

Human Resource Risk

Potential Impact

High employee turnover, skill shortages, or poor training can impact customer service quality and efficiency during peak seasons. operational

Mitigation Strategy

We invest in regular employee training, performance incentives, and a positive workplace culture to attract and retain talent. Our workforce planning aligns with seasonal demand to ensure service consistency.

Environmental and Sustainability Risk

Potential Impact

Increased focus on environmental sustainability and responsible sourcing could affect operations if not aligned with industry expectations or regulatory mandates.

Mitigation Strategy

We ensure compliance with applicable environmental regulations and are working towards adopting greener practices across our supply chain and store operations. We promote eco-friendly operations by using cloth bags instead of plastics, and adopting solar power at select stores for reducing carbon emissions.

Human Resources

The Companys talent strategy aligns with both immediate business objectives and long-term growth. By fostering internal talent development alongside strategic external hiring, we build a strong leadership pipeline and a workforce that is agile, skilled, and prepared for the future.

Building a Solid Talent Pipeline

The Company adopts a systematic approach to acquiring and developing talent, carefully selecting key roles and aligning them with high-potential employees. We focus on fostering internal mobility and nurturing leadership capabilities, while strategically sourcing external expertise for pivotal positions, enriching our talent pool.

Conducting Comprehensive Training and Skill Development Programmes

We are committed to developing a highly skilled workforce by offering a comprehensive range of training programmes. These initiatives focus on technical, functional, and cultural development, empowering employees and fostering a strong organisational culture.

Simultaneously, our HR team consistently seeks fresh talent through multiple channels, ensuring the recruitment of a dynamic and adaptable frontline workforce.

Recognising Career Growth and Performance

We emphasise internal career progression, recognising and rewarding exceptional performance through in-house promotions. Employee performance is meticulously evaluated, with top contributors receiving growth opportunities and performance-based incentives. Beyond competitive salaries, showroom employees and senior executives benefit from structured reward programmes that drive motivation and engagement.

Employee Strength (Permanent

Employees, including Executive Directors) as of 31st March 2025

Internal Controls

The Company has developed a robust Internal Financial Control (IFC) framework, fully compliant with Section 134(5) of the Companies Act, 2013. Crafted to align with the scale and complexity of our business operations, this framework is thoroughly documented, covering all financial and operational functions. Developed in line with the Companies Act, 2013, and the Guidance Note issued by The Institute of Chartered Accountants of India, its core objective is to ensure accurate accounting records, reliable financial reporting, and guarantee strict adherence to relevant laws and regulations. Further, ITGC Audit is helping in the effective and efficient operation of internal controls in our Company. It has helped in refining our processes w.r.t.

Access Controls, and Change Management, among others.

To safeguard financial integrity, a comprehensive system for internal auditing, risk assessment, and mitigation is in place. An independent firm of Chartered Accountants, with over 20 years of experience and ranked among the Top CA firms in India, oversees the Internal Audit function of the

Company. Operating autonomously, the Internal Audit team reports directly to the Audit Committee, offering an external and objective perspective while adhering to industrys best practices. The team devises an annual audit plan, approved by the Boards Audit Committee, targeting critical risks, operational compliance, and statutory obligations. Furthermore, it presents recommendations aimed at enhancing operationalefficiency fortifying governance. and Significant audit findings, along with corrective actions, are regularly reviewed by the Audit Committee and the Board. The Audit Committee actively monitors the progress of these action plans to maintain the effectiveness and reliability of financial controls, risk management mechanisms, and internal reporting structures. As part of the Managements control testing programme, internal controls are routinely assessed for operational effectiveness. After thorough evaluations, the Board, in collaboration with the Audit Committee, concluded that EMILs Internal Financial Controls were both adequate and functioning effectively as of 31st March 2025.

Cautionary Statement

This report includes statements that may contain ‘forward-looking remarks as defined by applicable Securities

Laws and Regulations. Actual results, performance, or achievements of the Company may vary significantly from projected outcomes due to various influencing factors. Key elements that could impact operations include shifts in domestic and global economic conditions, changes in government policies, amendments to tax regulations, and modifications to other relevant statutes.