Ladies and gentlemen, good day and welcome to the Q4 FY25 Earnings Conference Call of Electronics Mart India Limited. Before we begin, a short disclaimer: this conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as of the date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing * then 0 on your touch-tone phone. I now hand the conference over to Mr. Karan Bajaj, CEO of Electronics Mart India Limited. Thank you, and over to you, sir.
Thank you. Good evening and a very warm welcome to everybody present on the call. Along with me, I have Mr. Premchand Devarakonda , our Chief Financial Officer. We have uploaded our results and investor presentations for the quarter and full-year ended FY25 on the stock exchanges and the company's website. Hope everyone had a chance to go through the same. Despite the challenging environment during FY25, our revenues stood at INR 6,965 crores, a growth of 11%. EBITDA stood at INR 451 crores, with EBITDA margins of 6.6%. Pre-Ind AS adjustment margins stood at 4.7%. We continue to invest in long-term growth by expanding our retail footprint. Over the course of the year, we added 44 new stores. This rapid pace of expansion, while critical for strengthening our market presence, led to a higher operating cost.
Since these new stores are still in the early stages of ramp-up and have not yet stabilized, they have not contributed meaningfully to our revenue but have added to our fixed costs. As a result, this expansion impacted our EBITDA and EBITDA margins, weighing over the profitability of the year. That said, we view this investment to strengthen our long-term growth trajectory. As the newly added stores ramp up and start to stabilize over the coming quarters, we expect a gradual improvement in their throughput and contribution to overall revenue. With scale and maturity, the unit economics of these stores should normalize, leading to better cost absorption and improved operating leverage. This, in turn, is expected to support a recovery in margins and rebound in overall profitability. Let me touch upon category-specific performance for the year.
Large appliances contributed to our biggest revenue driver, contributing approximately 45.4% to our total revenue in FY25, with a year-on-year growth of 12%. This growth was primarily led by strong demand for cooling products, especially air conditioners. Our second-largest category, mobile phones, contributed 42% to our total revenue and is now witnessing more stable growth, currently tracking at around 11%. Moving on to the regional store addition, during FY25, we opened 18 multi-brand stores in Telangana, 18 in Andhra Pradesh, and 8 in the National Capital Region. With these additions, we reached a significant milestone of 200 stores in FY25. This network comprises 189 stores of multi-brand, 11 exclusive brand outlets spread across 82 cities in 4 states. In the NCR region alone, we now operate 29 stores. India's economic outlook remains optimistic, with projected GDP growth in the range of approximately 6.2%-6.8% for the upcoming fiscal year.
This anticipated growth is supported by increased government capital spending and a rebound in demand driven by prioritization, alongside favorable demographic trends and expanding consumer financing. Despite global uncertainty, these factors provide a strong foundation for sustained economic momentum. Further, the Union Budget 2025 has provided significant personal income tax relief by raising the taxable income threshold, effectively putting an estimated ₹1 lakh back into the hands of the middle class. This increase in disposable income is expected to boost consumer spending, especially in the consumer durable sector. With greater purchasing power, households are likely to upgrade or purchase new home appliances and electronics, driving overall demand growth. Looking ahead to the upcoming financial year, we plan to open around 25 to 30 stores in this financial year of FY26. Our strategy focuses on optimizing supply chain operations and improving inventory management to sustain cost competitiveness.
Additionally, we will expand our presence in the targeted geographies and strengthen our footprint in existing markets while continuing to build and nurture partnerships with leading brands. With this, I request Mr. Devarakonda, our CFO, to update you on the financial performance. Thank you.
Thank you, Karan sir. Good evening and warm welcome to all the participants. Let me begin with the Q4 FY25 financial overview. Our revenues for the quarter stood at INR 1719 crores as against INR 1525 crores in Q4 FY24, a growth of 13% year-on-year. EBITDA per Q4 FY25 stood at INR 114 crores as against INR 108 crores, a growth of 6% year-on-year. EBITDA margin per Q4 FY25 stood at 6.6%. Pre-Ind AS EBITDA for Q4 FY25 stood at INR 80 crores, with a margin of 4.7%. PAT per Q4 FY25 stood at INR 32 crores as against INR 41 crores. Like-to-like sales growth for Q4 FY25 was 1.5%. Moving on to FY25 financials, our revenues for FY25 stood at INR 6965 crores as against INR 6285 crores in FY24, a growth of 11% year-on-year. EBITDA per FY25 stood at INR 451 crores, which was flat on year-on-year basis. EBITDA margin for FY25 stood at 6.5%.
Pre-Ind AS EBITDA for FY25 stood at INR 326 crores, with a margin of 4.7%. PAT for FY25 stood at INR 161 crores as against INR 184 crores of the previous year. For FY25, like-to-like growth rate stood at 6.1%. ROCE and ROE for FY25 stood at 13.2% and 10.5%, respectively. The working capital days as of 31st March 2025 stood at 80 days. The gross and net debt to equity stood at 0.66, and our net debt to EBITDA stood at 2.1x. Pre-Ind AS cash flows from operations stood at INR 56 crores. With this, I open the floor for questions and answers. Thank you, everyone.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press * and 1 on the touch-tone telephone. If you wish to remove yourself from question queue, you may press * and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, wait for the moment while the question queue assembles. First question is from the line of Manoj Gori from Equirus. Please go ahead.
Yes, thanks for the opportunity, sir. Sir, I have two questions. One, if you can give some outlook because obviously what we are hearing at the ground level, there have been rains across the country, especially in May, and obviously there was some impact in the southern markets during the month of April. So probably, how should we look at Q1, and probably how should this translate into inventory levels, and probably should we see any more pricing pressure to liquidate this inventory? So probably brief outlook on Q1 and how we should look at things from Q2 onwards.
Right. Hi, good evening, Manoj. So, Manoj, as the whole country is witnessing rainfalls at different times of the day, especially South across the region here, this month has been a little muted in terms of the cooling products sales. But overall inventory that we would have usually during this period is in line with, so there is no stress on the inventory, and the same thing with the pricing pressure. So there is no pressure per se, or there will be no further discounting or any extra additional discounting for liquidating these stocks. So instead of ending up the season by June, where we'll be left with some inventory, probably it'll continue for another two months or so, but till August probably for air conditioners. Apart from that, cooling products, refrigerators, and air coolers, both are under control. So that we've already corrected.
So only a little additional inventory for air conditioners will be carried forward for a couple of months. But that also is of no stress. It is a very nominal addition to it. Plus, we've added 40 plus stores and some new stores have opened up this quarter also. So in line with what our expansion would be, the inventory levels for that particular category is in line. So not much of a stress and not much of other things. But definitely, yes, this summer didn't pan out the way usually you would expect because it started pouring quite early. And so once the cooling product category gets affected by rains or other external factors, then it becomes quite a difficult task to sell around that period. But no worries. Everything is optimistic and positive now.
Correct. Correct. Thanks. My second question would be on Hyderabad and Delhi NCR. So Hyderabad, if you look at in the presentation we have mentioned, the SSG has been marginally negative, close to flattish, during FY25. So probably how we are looking to arrest this decline of probably the demand environment remains so weak that at least in the near term, there might be some pressure on Hyderabad, and probably somewhere later, we can expect some revival if you can throw because obviously Hyderabad, if I'm not wrong, will be close to around 65% of our total revenues.
Correct. So if you see for the last few quarters, Hyderabad was flattish or a little negative, but last quarter, actually, if you see the absolute business value that we generated out of Hyderabad was positive by 4%. So we are up across categories if you see. Definitely, February, the AC cooling product also did very well in the Feb of Jan and Feb, but overall number, I think Hyderabad is doing good, so no complaints on Hyderabad. In fact, we are opening a few more stores as we move forward, so that should be good enough for us, and we would see a positive growth coming forward as well, except the cooling product categories, which definitely because of monsoon got affected a little bit, but the outlook across other categories also looks positive, so there is no stress there as well.
So I think overall, Hyderabad should shape up and start performing really well.
Thanks. And sir, lastly on Delhi NCR . So last year, we were looking for somewhere around break-even by exit of FY24. And this year, if you look at, probably we have been very close to the break-even mark for the full year with Delhi NCR .
Correct.
Do you see that this progress is in line with expectations or probably there has been some delay? How should we look at Delhi NCR in FY26 if you can throw some light over there?
Delhi is in line with our expectation. And I would say the turnaround that we did in such a short period was remarkable by the team. So I think we are doing quite a great job there compared to a lot of our peers operating out of that market. Definitely, yes, we are short in terms of the stores. We are expanding there with 29 stores right now. We are further adding up a few more stores this year as well. So there will be six to eight stores addition. We just opened up Janakpuri this weekend, last weekend. So that performed really well again. And I think overall numbers should be good for Delhi. And 2026, 2027 should also be a great year for us in that coming period for that region. So we're quite happy with the things we are performing.
Definitely, yes, it is a huge capital investment that we did. The depreciation cost or your finance costs were a little higher compared to the other regions that we were operating in. The gross margin level that we would expect for that region or the throughput that we would expect for that per store is in line with what we are targeted for this year.
But EBITDA probably from year-on should move in the northward trajectory.
Absolutely. Absolutely.
Okay, sir. Thank you, sir, and wish you all the best.
Thank you, Manoj.
Thank you. A reminder to all participants, you may press * and 1 to ask question. The next question is from the line of Percy from IIFL Securities. Please go ahead.
Hi sir. Just wanted to look at your CapEx. You've done about 350 crore of CapEx this year. If I look at the 40 stores which have been opened and roughly at, let's say, ₹3,000 a sq ft CapEx for the lease stores, that would come to somewhere around 80-100 crore of CapEx, which means that around 250 crore of CapEx has gone into the land and building for the stores that you have purchased. So can you give some idea, first of all, whether this calculation is correct? Secondly, where this 250 crores has been spent, in which locations? And given that our debt is now close to 1,000 crore, is this the same strategy that we want to adopt going into the future?
It's a very capital-heavy strategy of expansion, especially at a time when the EBITDA margins have gone down and the CapEx has gone up. It puts a lot of pressure on the sort of cash flows and the balance sheet both of the company.
Hi Percy. So your numbers, the calculation more or less is correct. Apart from the working capital, sorry, apart from the CapEx for buying out properties, there was a CapEx done for the stores for the 45 plus stores and the stores that are in pipeline now. But yes, we invested big on buying out properties. And these were properties which were already given advances of the pipeline properties, majorly in Delhi, जहाँ पर हमने[Foreign language] advance दे चुके थे पहले[Foreign language], but the registrations happened in this financial year. And this was as per the plan itself. So the strategy was to buy out these properties. And we are quite happy with the position that we are in today.
In terms of the borrowing that we have on books, which is approximately around 983 crores, जिसमें से [Foreign language] property का loan का ही तकरीबन[Foreign language] 230-240 crores है और बाकी[Foreign language] working capital है, which is in line with our seasonal purchase that we do usually, and right now, currently we are standing on that position, which is much lesser to what it was on 31st March because we liquidated inventory and सारा जो [Foreign language] advance देते हैं हम लोग [Foreign language], so everything got accumulated and then we sold out the stocks and all, so I think we are in line with that, so it's not much of a stress there. Now today, current position is also much, so our current levels are from 679 crores of working capital loan, it is at 450 crores, so that also is reduced by almost 220-230 crores.
So it is a part and parcel of our growth strategy where we wanted to acquire these properties, pay out advances to our vendors, and play the game. So I think we are quite comfortable with that. And twice a year during Dussehra Diwali also, you will see the working capital requirement going up because we added 44 new stores too. उसका[Foreign language] display, उसकी[Foreign language] inventory, उसकी backup, and especially जहाँ पर [Foreign language] tier 3, 4 towns में store खुले हैं, वहाँ पर[Foreign language] warehouse में भी थोड़ा [Foreign language] stock रखना पड़ता है. So I think overall put together, the number is under control, that even the debt levels are under control where we are standing today. बाकी ये जो [Foreign language] temporary properties का है, working capital, sorry, term loan जो है [Foreign language] Delhi का, that eventually will come down in a couple of years. So that is where the plan is.
Just two follow-ups on this. This year, where have we bought these stores? Is it all North India? All the, I think, six stores you have bought, right? So is it all North India? Secondly, is this the same kind of strategy we will follow in future where we might spend 150-200 crore on buying the stores every year?
No, no. So अगर आप देखोगे तो ये पूरे पहले तो ये सारा[Foreign language] investment हुआ है [Foreign language] Delhi, Gurgaon और NCR region के लिए जहाँ हमने [Foreign language] properties खरीदी हैं[Foreign language]. So apart from that, any other cluster that now we expand to, it will be not this aggressive in terms of property. So that is the plan because that will get divided between a lot of long-term lease agreements that we will be doing. But strategically, Delhi is where we wanted to invest in buying out real estate as well to secure a long-term strategy. But other cities and other geographies that will be expanding in the next couple of quarters, after next couple of quarters, that will be majorly on the lease hold, the thing, lease agreements.
So even in Delhi, if you are expanding, there will be only lease now, no purchase, is it?
Majority. Yes. Majority of the prime location that we wanted to buy out, सारा कुछ हमने खरीद लिया है[Foreign language]. The stores are yet to open. Apart from that, majority of the places now periphery that will be expanding into NCR also would be majorly on lease only.
Got it. Got it. Second question, can you just give some idea on what is the kind of EBITDA margin Pre-Ind AS that you are expecting for the North India cluster in FY26?
Okay. North India cluster would be once it's printed, do you want to answer this?
Yeah, yeah. We are expecting it to be around 3.5% this year. You can get the print.
Okay. Okay. Understood. And also wanted to understand your margins this year. You mentioned were 4.7%, right? Or was it this quarter?
Sorry? Margins?
Your Pre-Ind AS margin overall as a company was 4.7. That was for this year or for this quarter?
This for the year.
It's for the year, right? So see, basically, we used to do somewhere closer to 5.3%-5.5% kind of margins. So it has come down maybe 50-60 basis points from that. So what are the factors?
Yeah. So there is a better recovering Q4 than Q2 and Q3.
Got it. Got it. So at a full year level, what are the drivers which push down the margin? And going ahead, if the margin is going to improve from here, what will be the drivers for that expansion?
So, sir, there are the reasons I think are more organic with the business structure, with a lot of other competition scenarios. So, the fundamental changes are not there. So, there's no change in product mix. The product mix between larger brands with mobiles, lower margin product categories remain the same. There's not much of a change there. But I think going forward, what we used to do earlier, it will remain the same way. So, there'll be that change of 0.2%-0.3%, not more than that. But we'll definitely try to improve it like we did in Q4 as well. But apart from that, I don't see any fundamental flaw or any other reason for it to change from here on.
Okay. Got it. Okay, sir. That's all from me. Thank you.
Thank you, Percy.
Thank you. The next question is from the line of Devanshu Bansal from Emkay Global. Please go ahead.
Hi Karan. Thanks for the opportunity. You did mention that there is no margin risk from liquidation perspective. However, based on our understanding, there are significant incentives that we get on meeting the targets, right? So now that the category sales have been impacted and brands are also under a good amount of pressure, do you see some chance of margin loss in the current year because of that? I wanted to check on that.
Okay. So most of our targets or most of our contracts that we have with our respective vendors for our incentive income are directly not linked to our targets. So few of them are, but those are all fulfilled. So it is not that they are not fulfilled. Let's say a seasonal product category, which is a cooler ho gaya, AC ho gaya, us par ye target wala jyada nahi aata hai[Foreign language]. It's majorly for televisions and mobile phones and all, which we sell throughout the year. What happens is sometimes wherever we get stuck, not necessarily at this period, but any time of our journey, whenever we get stuck, it is usually the timelines are increased. If it's a quarter scheme, then they give us an additional 15, 20 days or a month to fulfill and complete those schemes.
So usually, we don't see a loss of that incentive income historically because we've never seen a loss on incentive income. So going forward also, it's not a big number, but at the same time, it is all protected. So there's nothing there that we will lose out at the end of the year.
Understood, and Karan, from your PPT, I also noticed that there are few brands in your top five which are seeing relatively muted growth trends versus the overall growth of the company, and my understanding is that we have historically and strategically worked with limited sets of brands across categories, so can you help us understand why a couple of those top five brands are sort of seeing muted trends and which are the categories that these sort of brands are capturing?
So sir, immediately the mobile वाले brands are soaring. And mobile में अगर आप देखोगे तो उनका actually क्या है[Foreign language], volumes have gone up, but ASPs have dropped. So if you look at Apple का, आप देखोगे Apple का अगर average, मेरा Apple का[Foreign language] average ASP dropped by 10% from last year to this year, for example. But the volume has grown. So if you see, if you look at it, the growth rate, इनका जो ये रहेगा[Foreign language] that ASPs थोड़ा drop हो गया, तो उसके चक्कर में क्या होता है कि [Foreign language] total contribution from this brand has been muted.
Otherwise, जैसे Apple का अगर आप historically देखो,[Foreign language] Samsung mobiles हो गया, Samsung overall है, televisions में है, LG जो है Samsung का, जहाँ पर आप देखोगे तो [Foreign language] that number is that ASPs dropped down with the volumes are up positive by 18%, but because of which the total contribution from these brands has not increased much.
So Karan Bhatt, I'm speaking specifically for brand two and brand five. Even if we see three-year CAGR perspective, these brands are flattish, right? So ASP could be one-year YoY growth. But even if we see from a three-year CAGR perspective, brand two and brand five have not seen any material growth, right? So I was checking for these two brands specifically.
So basically, it is a mix of everything. So for example, brand two would have appliances, would have larger appliances, would have televisions, air conditioners, washing machine, ref. So[Foreign language] har category mein unka agar aap dekhoge to price muted hai ya last do saal, teen saal se agar aap dekhoge, ya to phir unka ASPs nahi badhe hain[Foreign language]. Especially jo brands, jo top five brands mein, ismein do brand hain jo television [Foreign language]heavy hain. So jo heavy television brand hain, iska price bhi almost 15%-16% drop hua hai [Foreign language]year on year.
Okay. And there is one brand, this is brand three, which is continuously doing well. Which category would this be catering to?
Mobile. This is mobile, specifically a mobile brand.
Understood. Got it, Karan. Thanks for taking my question.
Thank you. The next question is from the line of Rajiv Bharati from Nuvama Wealth. Please go ahead.
Yeah. Good afternoon, sir. Thanks for the opportunity. So with regard to slide number nine, where you have shown SSGs for the quarter and full year, the universe which you use for quarter and full year is different, is it? Let's say for Delhi NCR.
Yeah.
For example, Delhi NCR, you have reported for the quarter 33.8% SSG, right? And for the full year, it's 50%. The stores which you consider in SSG calculations are different, is it?
Yes, yes. I think Prem Sir will elaborate on this, sir.
Sir, one is the like-to-like comparison. Hello?
Yes, yes. I can hear you. I can hear you. Yeah.
See, for Delhi, can you repeat the question once again?
No. So the question is the 33.8% number for Delhi NCR, that SSG, and the full year SSG, 50%. So the stores which you consider for this calculation, are they different? Why I'm asking this? Because YTD number till 9 months, SSG for Delhi was 22.4%, which let's say for the Q4, it has added 33.8% further. But the cumulative number has gone to 50%. So I mean, it is only possible.
We calculate this SSG. We consider only those stores which were operational throughout the year in the last year. In the previous, I meant to say, in the previous year, if a store is fully operational throughout the year, only those stores will be considered for the purpose of calculating like-to-like SSG.
I get it, but I'm saying the universe which you use for quarterly and full year are the different.
The number of stores used for Q4 and full year are different. Yes.
Okay. We consider that Q4 number. Two stores we consider. Because in that, we consider only two stores which were operational throughout the year in the previous year.
So, sir, just to answer, elaborate on your question. FY25, the 50% number that you see for SSG will have more number of stores which were operational throughout the year for delivering the 50% SSG because they had some additions of stores there. Whereas Q4 , FY25, would have a few stores from Gurgaon cluster which were not added in that number, in 33.8%.
Sure. Sure. That's all from my side. Thanks a lot.
Thank you.
Thank you. The next question is from the line of Yash Sonthaliya from Edelweiss public . Please go ahead.
Hi team. Thanks for taking my question. I have two macro questions. First, you already alluded to the uncertain range on demand and inventory. But can you please help me out with the region, like how it is impacting the inventory and demand in South and specifically in North, if you can help me?
Right. So actually, South, North, we start our summer a little early, as early as March second week. So then we usually end up by May second week. So usually by now, we are at the closure of our summer season. So we usually preempt our sales and then the throughput and then the whole purchase and management of inventory. And you say, but the advantage that we had this year again was that summers were still a little more stronger in Delhi. So we moved out our little inventory up North rather than buying few stocks there. We moved out our inventory from down South. So usually by end of June, when we exit, we usually have a certain number of inventory left with us by the end of season.
This year, because of the uncertain range and all, we might end up with a little more inventory, which will be liquidated in a couple of months. So that is a part and parcel of how this category, especially cooling products, would pan out. So that is how it is. But there is no pile-up on inventory in north as well. So whatever north requires will be sufficing the need from South rather than buying new stocks up north. That is how we would liquidate and manage inventory for the next couple of months here.
Understood. So no discounting also expected in North also, right?
No, no. Not required. Not required.
My second question is, like you have grown pretty well in Andhra Pradesh and Telangana, and SSG in Andhra Pradesh is also 5%. But when I look at other consumer-facing companies, their results specifically to Andhra Pradesh and Telangana have not been very well in Q4. So what's your read on the market and how we have outperformed other categories?
So, how we've outperformed other retailers would be majorly that our expansion that happened in the last 24 months, most of our stores are yet to get matured. So if you see the stores that we are adding up in Andhra also in the three or four markets versus what we are doing here as well in the current quarters, the stores are yet to mature up. Markets are very new for us as well. So you would definitely see the throughput of the stores in our country, both in Telangana and Andhra, outperforming and performing really well across the group for the next couple of years because the stores that we added in the last 24 months versus last year, this year, are all newer markets for us as well, which we expect the throughput to be much higher there.
So basically, it is much easier to look at a better SSG, look at grasping higher market share in those regions because the product mix that we would have or the range that we would have compared to a competition with a mom-and-pop store or unorganized retail players. It becomes much easier to compete with them in these pockets.
Understood. Understood. And just any outlook why there is an overall slowdown in specifically these two states and what's your outlook for upcoming 12-24 months?
So, this particular quarter that we are in, I would say that the cooling sale would be a little muted because majorly of the weather and no other reason. Because you're selling other product categories, the bigger days or the festive days are doing good. So you see that momentum coming through. Like Ugadi was the biggest last festival that we faced in Andhra Pradesh. That is exceptionally great. So you definitely see a demand there, which is not that the demand is going down. But yes, said that any change in, let's say, weather or seasonal product categories, that would definitely change the whole game for you in that particular region. But overall, I feel it is still optimistic in that region. It's still optimistic in that region for the growth to coming in this year as well.
Understood. Pretty helpful. That's all from my side.
Thank you, Yash.
Thank you. A reminder to all participants, you may press * and 1 to ask questions. The next question is from the line of Rupesh Tatalia from Intelsense Capital. Please go ahead.
Hi, hi Karan. Nice to connect with you.
Hello, sir.
Yeah. My question is, 200 stores you have, how many are now mature and how many are still not mature?
Okay. So sir, out of these 200 stores, 44 [Foreign language] तो ये साल ही खुले हैं जो mature होने को अभी और 12-15 महीने लगेंगे जिनको. ठीक है? बाकी उसके अलावा तकरीबन 155 जो[Foreign language] stores, 156 जो stores हैं, उसमें से तकरीबन [Foreign language]50 stores हैं जो ये साल अभी complete हो रहे हैं. जो हमारा 24 month to 36 month का period होता है for it to get mature, वो वाला period में है[Foreign language]. So you could say that 50% of a store out of 200 stores are under 24 months.
Okay. So that is one. Okay. This 104 number of stores you have given for Telangana, can you split that between Hyderabad and up country Telangana?
Sir. Okay. So sir, total in Hyderabad city, we have around 72 stores.
Okay.
And around 40 odd stores are in up country market of Telangana. This would include MBOs and EBOs both.
Okay. I see. So, to an earlier participant, Karan, you said that in Hyderabad now, you said that in Q4 there was 4% growth and now you expect the Hyderabad city market to do well. But ASPs drop 5%-10% every year. So, did I hear that right? And can you maybe expand on that a little bit?
Right. So sir, Q2 and Q3 , FY25 were a little negative for our cluster in Hyderabad because that is the largest cluster for us. So if that cluster doesn't perform or doesn't become 2%-3% positive for us, then you'd see that whole impact on the balance sheet or the P&L. But last quarter was good. So Jan-Feb-March did quite well, especially February started performing quite well for cooling products. यहां पर South में थोड़ा[Foreign language] season जल्दी start हो जाता है [Foreign language]for summer. That's why you would see a change in the cooling products selling better during a certain period. Right now, say, for example, the monsoon is already setting. So usually the monsoon here will settle in the next month onwards, will settle in a month early.
You would see a little impact there as well for cooling products not selling during Q1 in a higher number. And then apart from that, sir, what happens is that our technology category, especially in the premium category that we are in, or the brands that we deal with, what happens is that every year there would be a change in the pricing. Ours would be more like a depreciating asset where newer technology comes in, goes a little bigger, and then the pricing that a subsequent year would come down for that particular product category. Especially say like a 75-inch, 85-inch, 98-inch television. Some of the 98-inch was sold at INR 10 lakh last year, is now selling at INR 8 lakh rupees this year, for example.
So there are always with more volume coming in through high-end premium categories, the pricing from the manufacturers would keep coming down on that. And post that, major manufacturing hubs have now started in India, especially for iPhones, for example, or a lot of these AC companies. So you would not see a price increase in air conditioners for the last three years now. So usually when the ASPs don't go up, you need to suffice it with a major growth in the volume. And if the volume becomes single-digit growth, then you will not see a complete category grow at the level where value volume together would help you give you a higher value growth overall, that's it.
So then these, I mean, is it fair to assume that Hyderabad will continue to do like this for next, let's say, two years? It will be around this INR 4,000 - 4,200 crore range for next two years?
No, no. It will be definitely much bigger than that because we will be adding up new stores here. Newer categories are starting performing quite well here. So the overall sentiment is positive. So that is where we would emphasize more on that the sentiment, which was a little poor last year, the sentiment has become positive. And we would see that changing in the coming quarters.
So, okay. So what you are saying is higher volume growth will make up for the ASP growth in Hyderabad, and we can expect 5%-10% growth.
Correct. Correct. Correct.
Yeah. Okay. And then another question, structurally, I mean, at least I thought that the NCR market has a better gross margin because of the higher AC sales. Obviously, the competition is more. So over next two years, do you see the gross margin going from whatever, 14.2% to, let's say, 15%-15.5% like that over next two years?
Not really, Rupesh. So usually GPs now would remain in a similar range because the competitive scenario there for air conditioners is very different in any other part of the country. So in fact, the other AC dealers make the least margin there compared to what other LFRs or retailers would make because it's a very heavy distribution-driven product category there up north. So every category would play out differently. But we don't expect that number to jump or be over that 15%-16% range. It will be in line with what we do back home in Hyderabad.
Okay. Okay. Thank you. Thank you for answering my questions, Karan.
Thank you, Rupesh.
Thank you. A reminder to all participants, you may press star and one to ask question. The next question is from the line of Sakshi Pamnani from Pareto Capital. Please go ahead.
Hi. Thanks for the opportunity. Can you do some color within categories in terms of volume growth and value growth in terms of panels, refrigerators, AC?
Sure. So for the whole of FY25, the major categories that we deal is the mobile phones. Mobile phones, it was up by 10% in terms of value. First, I'll go through the value numbers with you so that it becomes easier. And air conditioners were up by around 34%-35%. Televisions category was up by 5.5%. Refrigerators and washing machine both around 4%-4.5%. And kitchen appliances built-in and all put together were around 11%. So that was the major growth that came in last year.
Okay. And this new pilot of Charcoal Project, can you explain that?
Yeah. It is a new venture that we have partnered with Sussanne Khan as a primary principal designer there. So basically, the tie-up is that we do sell our categories like that categories we are into audio automation, networking, cinema, televisions, built-in appliances for their projects. And they would end up designing and furniture would be from their side. So that is a collaboration that we've done. And our local partner here again also would be Gauri Khan for this particular region. And Sussanne Khan would be a principal partner there. So they design, they take the contract, they design, they supply the furniture, and then we supply the other goods of product categories that we are into. So as a collaboration, a turnkey project for a customer becomes one-stop solution. That was the whole idea of doing that.
Understood. And lastly, we only witnessed a positive EBITDA during Q1 FY25. And the rest of the quarters, we've been negative. So when can we expect to stabilize?
I think in the coming time, definitely that will also shape up well. But as I said, cooling product categories is what drove it last year, majorly if you see, because that was the maximum growth that came in in FY25 Q1. Whereas this year, that being a little muted because of the monsoons, so overall number, you see that will also perform in the next quarter. We will definitely see that number going up from this next quarter onwards.
Understood. Yeah. Thank you so much.
Thank you.
Thank you. The next question is from the line of Devanshu Bansal from Emkay Global. Please go ahead.
Hi. Thanks for the follow-up. Karan, in line with the previous question, can you provide the volume growth across categories? You provided the value growth. What has been the volume growth?
Right. I think I'll ask Vishal. He'll share the details with you afterwards.
Okay. So broadly, Karan, the reason why I
I'll ask Vishal. Vishal will share it with you.
Sure. The reason why I was asking, as you indicated, that there has been muted sort of increase in bill size in FY25. So based on the technology changes.
It's going to be higher than what numbers I gave you because automatically, as I told you, the ACs didn't go up much, right? So the volume growth is going to be much higher than the number that I quoted for value growth.
No, that's fair. I wanted to check what's the expectation of realization growth in FY26. So based on the technology changes that you are noticing across categories, so what's the expectation for ASP increase or realization growth for FY26?
Definitely, it is going to be much better than what we did in FY25 because FY25, we definitely saw that was one of the years where we saw a few quarters didn't perform the way we expected it to be, especially Q2 and Q3 . Going forward, irrespective of how this summer season is going to pan out, we're quite optimistic and quite confident for the plans that we have for the category that we're expanding into or the store performance, especially up north and in the tier three, four towns that we are expanding now in AP and Telangana. I think it gives us quite an optimistic approach to the whole number going forward.
No. So Karan, I'm asking only specifically for the ASP or bill size, right? So last year, you said that there has been some declining prices of products, right? So specifically based on the technology changes that are expected to be done in FY26, what's your sense as in from a pricing perspective as well as realization perspective? What kind of growth can we see?
I think definitely yes. This year, especially going post Q2, Q3 , definitely large appliances and air conditioners would definitely see an upside or ASP going up for sure. So that is there because the discussions are already on the pricing is going a little up. So that will definitely help us take the ASPs much higher than what it is today, which will more or less flat for the last couple of years. And as you said, newer technology additions to product categories like refrigerators, washing machines, especially air conditioners also now, ACs are coming with AI as a technology, for example. So all of those features are coming up. It definitely takes up the ASPs up and automatically helps us increase the value in that product category.
Any ballpark sense as in what we can sort of build in our model?
I think manufacturers will help you better with that answer.
Understood. Fair enough. Yeah. Okay.
Thank you.
Thank you. The next question is from the line of Akhil Parekh from B&K Securities. Please go ahead.
Hi. Thanks for the opportunity. I just have one question. This is regarding the HYDRAA regulation implemented by Telangana government over the last year or so. I don't know if it's coincidental because we are seeing quite a few listed brands, especially retailers, who have been impacted in Hyderabad and Telangana. If anything, it has to do with the regulation of government, basically. And how do we see it going forward, basically? Yeah. That's all the question.
Right. So HYDRAA, I don't know much about it because it has majorly to do with real estate as a category. But it was majorly meant for illegal structures in and around water bodies, which anyway was prohibited. So for safety measures, they have taken that action. And I think it's a good action because tomorrow, if any uncertainty or something goes bad or there are floods in the city, these properties would be under danger. So I think it's a good initiative by the government to take it forward. But there is no loss to properties which are authorized or legal properties, right? So it is for illegal constructions in and around water bodies.
But has it slowed down the progress in terms of retail footprint expansion?
Not really. In and around that area, I know a lot of builders doing projects in and around that area have got affected, but not majorly anything to do with our industry or our category.
Okay. Okay. That's all from my side. Thank you.
Thank you, Akhil.
Thank you. That was the last question for the day. I now hand the conference over to the management for closing comments. Over to you, sir.
Thank you. I would like to thank you all for joining into the call. I hope that we were able to answer all your questions. For any other queries, you may get in touch with SGA, our investor relations advisor. We will be happy to address all your queries. Thank you.
Thank you. On behalf of Electronics Mart India Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.