Electronics Mart India Navigates Growth with Strategic Expansion and Operational Leverage in Q3 FY26

Electronics Mart India Limited, a leading consumer durables and electronics retailer, has reported a robust performance for the third quarter and nine months ended December 31, 2025. The company demonstrated resilience and strategic acumen, particularly during the festive season, which saw a significant uplift in sales. For Q3 FY26, the company's revenue from operations reached INR 1,940 crore, marking an 8% year-on-year growth. EBITDA for the quarter stood at INR 119 crore, a notable 17% increase from the previous year, with the EBITDA margin improving to 6.1% from 5.6%. Profit After Tax (PAT) for the quarter was INR 30 crore, even after accounting for an exceptional charge related to new Labour Codes.

The quarter began on a positive note, benefiting from the Diwali festive season in October and the implementation of GST rate cuts. This combination spurred demand across various categories, especially large appliances. The company reported a robust 25% growth on a festival-to-festival comparison, underscoring strong underlying demand and the effective playout of operating leverage. For the nine-month period (9M FY26), revenue from operations was INR 5,270 crore, a 4% growth, with EBITDA at INR 311 crore and a margin of 5.9%. PAT for 9M FY26 stood at INR 67 crore.

Strategic Expansion and Store Maturity

Electronics Mart India's growth strategy is deeply rooted in a cluster-based expansion model. The company added four new stores in Q3 FY26, with two in the NCR region and two in Andhra Pradesh. Over the last two years, nearly 100 stores have been added, accounting for approximately 50% of the total store portfolio. While this aggressive expansion positions the company for future growth, it also means a significant portion of its network is relatively young and still in the early stages of maturing. These newer stores, less than four years old, currently operate at an EBITDA margin of 3%, compared to 7% for mature stores (over four years old). As these stores ramp up, the company anticipates improved operating leverage, leading to a gradual normalization of profitability and Return on Capital Employed (ROCE).

Geographically, the core Hyderabad market showed a strong recovery, with a 6.4% year-on-year revenue growth and a 3.3% same-store sales growth (SSSG), supported by a revival in real estate projects. Andhra Pradesh delivered an impressive performance, recording 18.2% revenue growth and a 4.9% SSSG. The NCR cluster continued its aggressive scaling, achieving a 30% revenue growth and a 7.1% SSSG, and notably remained EBITDA positive on a nine-month basis. However, the Telangana upcountry market experienced a marginal 2% revenue growth and a slight decline in SSSG, attributed to a general slowdown in market sentiment.

Product Mix and Market Outlook

The product mix remained consistent, with mobiles contributing around 44% of total revenue in Q3 FY26 and 9M FY26. Large appliances accounted for 42% in Q3 FY26 and 43% in 9M FY26, while small appliances, IT, and others made up 14% and 13% respectively. The company observed a positive shift in consumer preferences towards large televisions and high-value appliances like front-loading washing machines and dishwashers, partly driven by the GST reduction. Washing machine demand, which had been stagnant, grew by approximately 11% during the quarter.

Looking ahead, the mobile phone segment is expected to enter a new phase of demand, driven by upcoming technologies, upgrades, and feature enhancements, including AI-enabled devices. The management is optimistic about the upcoming summer season for cooling products, anticipating higher approval rates from NBFCs and mitigating potential price increases with EMI offers and cash backs from brands. The broader economic environment, with GST rate reductions and income tax slab adjustments, is expected to boost disposable income and drive long-term structural demand for consumer durables.

Electronics Mart India continues to focus on strengthening cash flows through inventory optimization, expanding its presence in high-potential markets, and leveraging its trusted partnerships with leading brands. The company's commitment to differentiated in-store experiences, including live demonstrations and consultative sales, aims to enhance customer satisfaction and conversion. With a strong balance sheet and a clear strategic roadmap, Electronics Mart India is well-positioned to capitalize on the growing consumer durables market in India, aiming for sustained growth and improved profitability as its newer stores mature and operating leverage fully plays out.