Started in 1980, Electronics Mart India Limited is the 4th largest consumer durable and electronics retailer in India. The company offers a diversified range of products with a focus on large appliances (air conditioners, televisions, washing machines and refrigerators), mobiles and small appliances, IT and others. The company's offering includes more than 6,000 SKUs (stock keeping units) across product categories from more than 70 consumer durable and electronic brands. Electronics Mart India Limited business models:1. Ownership Model: The company owns the underlying property including the land and building.2. Lease Rental Model: The company has enter into a long-term lease arrangement with the property owner(s). As of August 15, 2021, out of the total 99 stores company operates, eight stores are owned, 85 stores are under the long-term lease rental model and six stores are partly owned and partly leased. The company operates its business activities across three channels retail, wholesale and e-commerce.Retail : As of August 15, 2021, out of 99 stores, 88 stores are Multi Brand Outlets ("MBOs") and 11 stores are Exclusive Brand Outlets ("EBOs"). The revenue from the retail channel was Rs 29,312.84 million, Rs 28,991.35 million and Rs 25,801.72 million for Financial Year 2021, 2020 and 2019, respectively.Wholesale : The company is also engaged in the wholesale business of consumer durables, where the company supplies products to single-shop retailers in Andhra Pradesh and Telangana regions. The revenue from the wholesale channel was Rs. 530.53 million, Rs. 505.22 million and Rs. 465.81 million for Financial Year 2021, 2020 and 2019, respectively.E-Commerce : The e-commerce website currently functions as a catalogue for the products that company retail at stores. The revenue from the e-commerce channel was Rs. 444.57 million, Rs. 280.11 million and Rs. 212.75 million for Financial Year 2021, 2020 and 2019, respectively. As per financial performance, EMI has posted total income/net profits of Rs 3179.02 Cr / Rs 81.14 Cr (FY20), Rs 3207.37 Cr / Rs 58.84 Cr (FY21), Rs 4353.07 Cr / Rs 104.59 Cr (FY22) and Rs 1410.25 Cr / Rs 41.46 Cr (Q1 FY23). So as per last three years data, company has shown growth. They have posted an average EPS of Rs 2.84 and average RoNW of 15.82% for last three fiscals. Issue is priced at a P/BV of 2.77 as per NAV of 21.27 on 30.06.22. If we attribute latest earnings of FY22 on fully diluted equity post issue, then asking price is at a P/E of around 22, which looks fully priced, but if we take FY23 annualized earnings than P/E is around 14. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, 3 lead managers are associated with this IPO, and have handled around 58 IPOs in last three fiscals.Anand Rathi Advisors Limited: This is 3rd IPO from this BRLM. From last 2 IPOs, both opened above issue price on the day of listing. As of now, all are trading above issue price. ( As on 03.10.22)IIFL Securities Limited: This is 29th IPO from this BRLM. From last 10 IPOs, 4 opened below issue price and remaining opened above issue on the day of listing. As of now, 3 are trading below issue price and other are trading above issue price. ( As on 03.10.22)JM Financial Limited: This is 29th IPO from this BRLM. From last 10 IPOs, 2 opened below issue price and remaining opened above issue on the day of listing. As of now, 2 are trading below issue price and other are trading above issue price. ( As on 03.10.22) As per financials, Electronics Mart India Limited, has shown good growth, RoNW is 17.42% and P/E is respectively 22 and 14 as per FY22 and FY23 annualized earnings, which looks fairly priced. Company is 4th largest retailer in consumer durables and electronic items with focus in South. This sector has shown good growth in past and expected to do well in next 3-5 years. Only concern for such companies are eCommerce platforms like Flipkar, amazon, etc. Performance of BRLMs are good. So, we give SUBSCRIBE rating for this IPO.
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