Multi-bagger stock: Electronics Mart India Ltd (EMIL) shares have grown 2.5 times in a year; what next?
Multi-bagger stock: Since their debut in the secondary market, at Rs 89.4 on BSE and Rs 90 on NSE, EMIL shares have gained 148 per cent, a premium of 275.8 per cent over the issue price, as of Monday’s closing price.
Multi-bagger stock: Telangana-based multi-brand electronics retailer Electronics Mart India Ltd’s shares have rewarded investors with a return of 2.47 times in one year. Listed on October 17, 2022, the EMIL stock entered the listed space at a premium of 52 per cent over the upper end of the price range of the company’s Rs 500-crore IPO, which was subscribed 71.9 times amid a robust response from investors.
Since their debut in the secondary market, at Rs 89.4 on BSE and Rs 90 on NSE, EMIL shares have gained 148 per cent, a premium of 275.8 per cent over the issue price, as of Monday’s closing price.
The EMIL IPO was subscribed an overall 71.9 times the shares on offer.
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But where is the stock headed? Analysts have listed some reasons behind the rally in the stock:
1. Strong core
Electronic Mart India has strengthened its core and is in the process of expanding its horizons, according to Narendra Solanki, Head, Fundamental Research-Investment Services at brokerage Anand Rathi Shares and Stock Brokers.
The company has forayed into the largest market for consumer durables in India, the National Capital Region (NCR), which represents five per cent of the entire domestic market, the analysts pointed out.
The company's widening base and scale of operations could increase its bargaining power with leading brands, which is a key monitorable, Solanki added.
2. Good operational parameters
Electronics Mart India's operating parameters are comparable with larger peers (Croma), Solanki said.
3. Strong financials
The company's financial performance is healthier considering its business model, he said.
4. Store expansion
Solanki also highlighted that the retail segment is expected to lead growth for the company, as it plans to add 20 stores each in FY24 and FY25, in Telangana and the NCR.
According to analysts, 83 per cent of EMIL’s retail stores are on long leases, while 12 are owned by it and nine are partially owned.
EMIL company operates within the retail chain sector, emerging as a prominent player in the consumer electronics and durable goods market in India, said Atul Parakh, CEO of share trading app Bigul.
Parekh expects a rise in urban and luxury spending to boost the EMIL stock further. "The company is trading with a PE multiple of around 54 and has given good returns from its IPO price," he said.
Solanki of Anand Rathi added that the outlook for Electronics Mart India's core market is bright while its New Delhi foray seems to be on track.
He expects that the company can be a major beneficiary of expanding capacity in durables, especially ACs where leading brands such as Blue Star, Voltas and Lloyd are expanding capacity.