A Good Q4 For Electronics Mart | Expect FY27 Topline At 15%, Says Company | CNBC TV18

Añadido: 2026-05-25

[00:00:00]A time for the first earnings conversation on the show, Electronics Mart reported a healthy fourth quarter.

[00:00:04]The revenues were up 15%. The profits were up almost 50%. We are now being joined by Mr. Prem Chand Devarakonda, the CFO of Electronics Mart to break down the quarter gone by and of course the road ahead for the company. Mr. Devarakonda, good afternoon. Thank you for joining in. You know, before we get down to business, the first topical question that I wanted to actually ask you was that based on the current situation that you are witnessing in West Asia and with the current energy crisis, the rise in prices as well, are you witnessing a similar trend of a rising sale demand in the induction cooktops and microwaves and other such products? And if so, what is the kind what is the extent to which you have seen this go up?

[00:00:51]Okay.

[00:00:52]Thank you very much for having me on your show.

[00:00:55]Uh see, this induction cookstoves definitely had a pent-up demand sometime in the month of March.

[00:01:02]Now, it is cooled down. So, there is not going to be there will not be any further I mean would say any unexpected demand for this high these cooktops.

[00:01:12]But, the other categories like air conditioner, this is the season for I mean this is the season for cooling products. Mainly air conditioners and coolers, I think they gained a lot of demand in the market and they're doing exceedingly well.

[00:01:28]Okay. So, thank you so much for joining >> us. You know, uh you know, like you just mentioned about how demand has picked up in certain categories. What we want to understand from you is that as far as Q4's concerned, margins are priced as street positively. Going into FY27, can you quantify your guidance in terms of same-store sales growth, a growth target in terms of top line, and what kind of EBITDA margins should the street work with?

[00:01:51]Yeah.

[00:01:52]Uh since the summer started off very well, I think we will be very optimistic about this FY27 and we are targeting We are targeting about 15% top line growth. And maybe high single digit SSG growth coming in from the markets where we have been operating.

[00:02:14]So 15% revenue growth and high single digit same store sales growth, right Mr. Devarakonda?

[00:02:21]That's right.

[00:02:21]>> What about margins?

[00:02:23]See margins will be a bit of margins will be between 6.5 and 6.8%. So that is the range for a bit of margins. Okay. So margins you expect to maintain but in terms of SSG growth from Q4 you're expecting a bit of a moderation. Q4 it was very strong at over 12%. You're seeing a bit of a moderation. So what is the reason for that? And the other question is so analysts are a little worried that the pace at which you're adding fresh stores has moderated quite significantly. Is there a reason that you're going slow?

[00:02:58]See, for the last couple of years definitely our store addition year on year has been quite significant. That means in percentage terms we were adding almost 25 to 30% stores year on year.

[00:03:13]Whereas this year we are going to be little conservative in adding the new stores as we have been targeting the other states also because currently we have been operating only in AP Telangana and NCR. And now we are looking towards eastern part of India. So there we when we enter any new market we want to be little conservative. As a result at the same time we have to focus on stabilizing the existing stores which were which have been opened in the last couple of years. So there the productivity needs to be improved. So we are working in tandem with both these strategies.

[00:03:55]Okay. So, you're looking to go ahead and improve the profitability metrics as far as other you know, the other stores are concerned. So, going into FI27, FI28, what is the kind of growth assumptions that the street should now work with given the fact that there will be moderation as far as our store growth is concerned?

[00:04:15]See, out of See, if you look at our store mix also, more than 50% of our stores are yet to mature. So, those stores keep on growing or I mean, over the next couple of years. And this year we're targeting 15% top line growth. And the similar trend is expected and the I mean, it will be between 12% and 15% depending on the summer season performance. And uh uh if summer will summer is good in the next I mean, FI28, definitely we are going to have similar uh growth rate in FI28 as well. Mhm.

[00:04:53]Uh clubbing two questions into one, Mr. Devarakonda. First, of course, is uh your product mix. Large appliances from 61 have come down to 42 now with mobiles taking a better bigger share of that. Uh does that product mix remain the same going into this year as well? And part two, if you can give us a situation uh scenario on the working capital days as well. It has remained between 70 to 80 over the last 3 years. Does that also remain the same this year as well?

[00:05:22]Yeah.

[00:05:23]See, last year summer was uh not really favorable to us. So, we had to take the beating. As a result, that uh large appliances mix has drastically dropped off. Uh whereas this year summer is very good. So, as a result, we are going to have we will again come back to that 50% contribution coming in from the large appliances. And we are quite confident of achieving that.

[00:05:48]Coming back to the other part, what is the second part of the of the question? Uh about working capital, Mr. Devarakonda.

[00:05:55]>> Yeah, yeah, yeah. Working capital normally what happens this is before start of any season. Obviously our working capital days looks to be very high because we stock lot of products before the start of the season. The inventory levels go up. As a result the the working capital days look little on the higher side. But when you look at like end of Q1 or Q2 where the by the end of the season definitely it will drop down to again below below 60. So that is the trend and it will continue in future as well.

[00:06:33]Okay, you know, coming to the good part of the business, you know, when you're looking at the NCR region or the north cluster that's grown almost 31% on a year-on-year basis. However, margins there continue to remain slightly slightly subdued compared to you know, especially when you're looking at the south market. So going forward, sustainable rate of growth in NCR region and where can you bring margins up to?

[00:06:54]Yeah.

[00:06:55]See compared to southern cluster NCR operating costs are little higher. As a result when the stores mature, we may expect say if south cluster is contributing 70% north cluster will be 50 whips lesser. So that is our expectation and because of the higher cost of operating higher operating costs. That is the only reason and in the next couple of years we are going to I think reach to whatever the targeted EBITDA coming in from NCR.

[00:07:33]Pleasure having you today, Mr. Devarakonda. Thank you so much for spending time and joining us today on the show. Wish you good luck for FY27 as well. Take a short break from one management to another other the management of Neogen Chemicals joins in on the other side. Stay tuned.