You are almost there; but your assumption is not correct. Let me try to put it this way; Imagine, a company has 100Cr as PBT (Profit before Tax), in the Financial statement (FS), and assuming a 20% tax rate, they show 20Cr as taxes paid (in FS). Note: this 100cr also include a 50cr from a marketable security or some other investment which has ‘unrealized gain’ of 50Cr.

However, their Tax reporting statement shows total Profit for the period as 50 Cr (for tax purposes, the gain is not recognized until the investment is sold and the gain is realized). Here then the tax actually paid is 10 Cr (20% of 50Cr).

So, company will create a tax liability of 10Cr (since your cash a/c still holds a 10Cr, which has to be paid to the tax authorities in a future date).

The scenario here, has an impact of entry in P&L (entered 20Cr as tax in FS), while in reality not paid to authorities…, and surely it will hit in future.

Hope i havent confused you further here…

PS: One take away point i would add here is, one has to pay bit more attention when we see a significant amount hits P&L under deferred tax Asset/liability. Lets say as a % of PBT.

Electronics mart –

Q2 FY 25 results and concall highlights –

Revenues – 1386 vs 1303 cr, up 6 pc
EBITDA – 84 vs 97 cr, down 13 pc ( margins @ 6.1 vs 7.4 pc )
PAT – 25 vs 37 cr, down 34 cr

Total stores –

NCR cluster – 25
Telangana + AP cluster – 152 stores

Stores added in last 6 months @ 18. Stores added in FY 24 @ 34

Geography wise EBITDA margins –

North cluster – 1 pc ( North Cluster’s operations started only in Aug 22. Margins should improve as the stores mature )
South cluster – 8 pc

Category wise revenue breakup –

Mobiles – 42 pc
Large appliances – 46 pc
Small appliances – 12 pc

Heavy and unseasonal rains in South India impacted demand in Q2

Likely to add 10-12 more stores in H2

Sales in Oct 24 have been encouraging

Should be able to achieve 15-18 pc sales growth for FY 25. Sales growth in H1 has been @ 13 pc ( it seems, they have had a good festive season – just a conjecture – to be taken with a pinch of salt )

Company expects positive operating leverage from Northern Cluster to start playing out in another 18 months or so

Disc: holding, biased, added recently, not SEBI registered, not a buy/sell recommendation