About Electronics Mart India Limited:
Incorporated in 1980, Electronics Mart India Limited (EMIL) is the 4th largest consumer durables and electronics retailer in India, and the largest in the Southern region, particularly dominant in Telangana and Andhra Pradesh. The company offers a diversified range of products, including large appliances such as air conditioners, refrigerators, and televisions, mobile devices, small appliances, and IT products. EMIL’s extensive portfolio comprises over 8,000 SKUs across more than 100 well-known brands like LG, Sony, Oppo, and Dell.
With a business model that includes both ownership and lease rental stores, EMIL has built a network of 170 stores across India by Q1 FY25, operating under the brand “Bajaj Electronics.” The company derives nearly 99% of its revenue from physical retail operations, while only 1% comes from its e-commerce platform. EMIL has ambitious plans to expand into Tier-I and Tier-II cities, adding 45 new stores in the coming years, while modernizing its warehousing facilities to improve operational efficiency.
Business Strategy:
Electronics Mart India Limited’s business strategy focuses on aggressive expansion and enhancing customer experience while maintaining a robust supply chain. Key elements of the strategy include:
Expansion into New Markets: The company plans to open 45 new stores, particularly in Tier-I and Tier-II cities, with a significant focus on the Delhi NCR region and further penetration in Southern India. This strategy aims to capture a larger market share and meet increasing consumer demand for electronics.
Strengthening E-commerce Presence: Although currently reliant on physical retail, EMIL recognizes the growing importance of online shopping. The company aims to enhance its e-commerce platform to cater to changing consumer preferences and improve overall sales.
Product Diversification: By continuously expanding its product offerings and partnering with a wide range of brands, EMIL ensures that it can meet various consumer needs and preferences, which helps in driving sales across different categories.
Enhancing Customer Experience: EMIL is focused on providing an exceptional shopping experience through well-trained staff, engaging store designs, and efficient service processes. This commitment to customer satisfaction is intended to foster brand loyalty and repeat business.
Operational Efficiency: The company is investing in modernizing its warehousing and inventory management systems to improve operational efficiency. By optimizing its supply chain, EMIL can reduce costs and ensure timely product availability.
Business Model:
Electronics Mart India operates a hybrid business model that combines ownership and leasing strategies to optimize costs and store locations. Key components of the business model include:
Ownership Model: EMIL owns some of its retail properties, allowing for greater control over operations and reducing rental expenses over time. As of Q1 FY25, the company has 13 owned stores.
Lease Rental Model: The company also operates many stores under long-term lease agreements, minimizing upfront investment and providing flexibility in store operations. This model allows EMIL to expand its footprint quickly without significant capital outlay.
Multi-Brand and Exclusive Brand Outlets: EMIL operates a mix of Multi Brand Outlets (MBOs) and Exclusive Brand Outlets (EBOs), catering to a diverse range of consumer preferences and enabling strategic brand partnerships.
Revenue Generation: The company derives approximately 99% of its revenue from retail operations, with a minor contribution from e-commerce. This retail-centric approach is complemented by a wide range of products from over 100 brands, ensuring a strong value proposition for customers.
Focus on Large Appliances: The majority of the revenue comes from large appliances, accounting for around 53% of sales. This focus on high-value items allows EMIL to benefit from higher margins compared to smaller electronics.
This comprehensive business strategy and model position Electronics Mart India for sustained growth and adaptability in the competitive consumer electronics market.
Board of Directors:
Electronics Mart India Limited is led by a team of experienced professionals with deep expertise in retail, finance, and business operations. The key members of the board include:
Karan Bajaj – Chief Executive Officer (CEO)
Karan Bajaj, age 37, has been leading the company since 2018. Under his leadership, the company has expanded significantly, becoming a dominant player in the Southern Indian market.
Premchand Devarakonda – Director of Finance/CFO
Premchand Devarakonda oversees the financial operations of the company and has been instrumental in managing its financial health since 2019.
Sandeep Singh Jolly – Chief Operating Officer (COO)
Sandeep Singh Jolly is responsible for the day-to-day operations of the company, ensuring smooth functioning across all stores.
Astha Bajaj – Board Director
Astha Bajaj, age 34, brings her expertise in strategic decision-making and has been actively involved in guiding the company’s overall growth.
Mirza Ghulam Baig – Board Director
Mirza Ghulam Baig, age 73, brings decades of experience and has been a part of the board since 2018.
The leadership team’s diverse experience in finance, retail operations, and strategic growth has enabled Electronics Mart India to strengthen its market position and expand its store network across India.
Shareholding Pattern (as of September 2024):
The latest shareholding distribution for Electronics Mart India Limited (EMIL) is as follows:
Promoter and Promoter Group: 65.17%
Foreign Institutional Investors (FIIs): 8.80%
Domestic Institutional Investor(DIIs): 18.93%
Public Shareholding: 7.10%
This updated shareholding shows a solid balance between promoter and institutional ownership.
Strengths:
Market Leadership: Electronics Mart India is the 4th largest electronics and consumer durables retailer in India and holds the dominant position in the Southern region, particularly in Telangana and Andhra Pradesh. This strong market position gives it a competitive edge
Diversified Product Portfolio: The company offers a wide range of products, with more than 6,000 SKUs across large appliances, mobiles, small appliances, and IT products. It has established relationships with over 70 well-known brands such as LG, Oppo, Vivo, and Dell.
Expansion Strategy: The company is aggressively expanding its retail footprint, with 170 stores as of Q1 FY25 and plans to open 45 new stores in Tier-I and Tier-II cities. This expansion will likely drive future revenue growth and further solidify its market position .
Ownership and Lease Models: Electronics Mart operates through a mix of ownership and lease models, which allows it flexibility in managing costs while securing prime locations for stores. This diversified approach helps minimize upfront capital expenditures while optimizing store locations .
Strong Revenue Growth: The company has demonstrated strong revenue growth, achieving a 15.42% increase in FY24. The growth in the average ticket size from ₹19,400 in FY20 to ₹24,000 in FY24 is a positive indicator of increased consumer spending .
Warehousing and Supply Chain Efficiency: The company operates 12 centrally located warehouses, which ensure efficient inventory management and supply chain operations. This infrastructure supports its large retail network and reduces logistics costs .
Weaknesses:
High Dependence on Retail Operations: About 99% of the company’s revenues come from physical retail stores, with only 1% from e-commerce. In a market where digital sales channels are growing rapidly, this limited presence in e-commerce could be a potential area of weakness .
Geographical Concentration: The company’s primary operations are concentrated in the Southern region, particularly Telangana and Andhra Pradesh. This geographical concentration exposes it to risks specific to those regions, such as local economic slowdowns or regulatory changes .
Rising Promotional Expenses: Advertising and promotional expenses have seen a significant increase, rising from ₹35 crore in FY20 to ₹54 crore in FY24. While promotions are crucial for driving sales, the rising costs could impact margins if not managed carefully .
Limited Brand Diversification: While the company has relationships with over 100 brands, a significant portion of its revenue is driven by its top 5 brands (63% in FY24). This reliance on a few key brands for revenue generation could pose risks if any brand relationship changes or if consumer preferences shift .
Opportunities:
Growth in Tier-II Cities: The company’s focus on expanding into Tier-I and Tier-II cities, along with plans to modernize and expand warehousing facilities, could lead to increased market penetration and revenue growth .
E-commerce Expansion: Developing a stronger online presence would help Electronics Mart capitalize on the growing trend of digital shopping and provide diversification from its heavy reliance on physical stores.
Threats:
Competition: Electronics Mart operates in a highly competitive industry with other big players like Croma and Reliance Digital. Intense competition could put pressure on margins and slow down market share growth .
Economic Slowdown: Any slowdown in consumer spending or economic downturns could negatively impact the demand for high-value consumer durables and electronics, which constitute a large portion of their product offerings.
By leveraging its strengths and addressing key weaknesses, Electronics Mart India has the potential to continue its growth trajectory in the consumer durables and electronics retail space.
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