Electronics Mart profit drops 66.72% as operating margin narrows
Revenue declined 21.46% sequentially, while a lower tax rate partly softened the impact on net profit.
Filed 05 Nov 2026, 13:26 IST · Electronics Mart India Ltd (EMIL)
Key takeaways
- Consolidated revenue fell 21.46% sequentially, while net profit dropped 66.72% to Rs 40.15 cr.
- Operating margin narrowed by 3.01 percentage points to 6.87% as expenses declined less than revenue.
- Electronics Mart’s operating margin was 4.69 percentage points below the 11.56% median for 262 reporting Consumer Discretionary peers.
Price around the results
Sequential slowdown cuts profit sharply
In consolidated Q2FY27 results, revenue declined 21.46% sequentially to Rs 1,899.74 cr, while operating profit fell 45.37% to Rs 130.53 cr. Net profit dropped 66.72% to Rs 40.15 cr, with EPS falling to Rs 1.04 from Rs 3.14.
Costs outpaced revenue on the way down
Expenses declined 18.84%, less than the 21.46% fall in revenue, so operating margin contracted by 3.01 percentage points to 6.87%. Interest expense fell 2.63%, but depreciation rose 4.14%, adding to the pressure below operating profit. The tax rate fell by 1.61 percentage points to 23.95%, partly cushioning the decline in net profit; other income contributed only 3.48% of pre-tax profit.
Margin remains below the sector median
Electronics Mart’s 6.87% operating margin was 4.69 percentage points below the 11.56% median among 262 Consumer Discretionary peers that had reported the quarter. The presentation shows mature stores at a 9.7% EBITDA margin versus 6.4% for non-mature stores, indicating the store mix remains relevant to profitability.
Management links improvement to store maturity
Management said profitability should improve as more stores mature, throughput rises and fixed costs are absorbed over a larger base. It also said store maturation should lift revenue productivity and that technology-led replenishment is improving inventory rotation and cash conversion. The company reported 229 stores through H1 FY27, including nine openings, and said it is expanding into newer clusters such as Western UP; Delhi NCR recorded 32.4% same-store sales growth in Q2FY27.
Q2FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q2FY27 | Q1FY27 | QoQ |
|---|---|---|---|
| Revenue | ₹1,900 cr | ₹2,419 cr | -21.46% |
| Other income | ₹2 cr | ₹2 cr | -5.64% |
| Expenses | ₹1,769 cr | ₹2,180 cr | -18.84% |
| Operating profit | ₹131 cr | ₹239 cr | -45.37% |
| Operating margin (%) | 6.87% | 9.88% | — |
| Interest | ₹36 cr | ₹37 cr | -2.63% |
| Depreciation | ₹43 cr | ₹42 cr | +4.14% |
| Profit before tax | ₹53 cr | ₹162 cr | -67.42% |
| Tax | ₹13 cr | ₹41 cr | -69.47% |
| Net profit | ₹40 cr | ₹121 cr | -66.72% |
| EPS (₹) | ₹1.04 | ₹3.14 | -66.88% |
Operating margin of 6.87% compares with a Consumer Discretionary sector median of 11.56% across 262 peers that have reported Q2FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Delhi NCR recorded 32.4% same-store sales growth in Q2 FY27.
Guidance & outlook
- The company expects profitability to improve as more stores mature and unlock higher throughput and operating leverage.
- The company expects store maturation and stabilization to improve throughput and revenue productivity.
- The company expects EBITDA margins to gradually normalize through improved fixed-cost absorption.
Expansion
- The company is expanding into newer clusters such as Western UP.
- The store network reached 229 stores by FY27 through H1, compared with 223 in FY26.
- The company opened nine stores during FY27 through H1.
New initiatives
- The company is using technology-driven replenishment to accelerate inventory rotation and improve its cash conversion cycle.
- The company uses live demonstrations and brand-led events in its MBO stores to create an engaging retail environment.
Competition
- The company says its newer markets are largely unorganized and are shifting toward organized retail.
Problems & risks
- Non-mature stores have a lower EBITDA margin than mature stores, at 6.4% versus 9.7%.
What to watch
- Whether operating margin moves back above 6.87% as stores mature.
- Whether non-mature-store EBITDA margin improves from 6.4% toward the 9.7% mature-store level.
- Store count and same-store sales after 229 stores through H1 FY27 and 32.4% Delhi NCR growth in Q2FY27.