Spencer’s Retail Ltd Q2/H1 FY26 – The Retail Drama That Refuses To Die (₹12,540 lakh half-year loss, -14% degrowth, 82% East India dependence)

1. At a Glance

If “burning cash” were an Olympic sport,Spencer’s Retail Ltdwould have its own podium. The RP-Sanjiv Goenka Group’s once-glamorous retail baby is now more like that cousin who opens an organic café, shuts it in six months, and still insists it’s a “learning experience.” With amarket cap of ₹417 crore, acurrent price of ₹46.2, anda book value of -₹87.3, the math already screams “ouch.” The company’sROCE is -9.72%,debt sits at ₹1,702 crore, and it has aDebt-to-Equity ratio beyond imaginationsince equity is practically eroded.

Q2 FY26 was another tragedy in slow motion:sales ₹445 crore,PAT ₹-63.8 crore, marking a14.1% drop in salesand26.8% QoQ increase in losses. Yet the promoters seem zen, holding58.81%, unchanged for quarters — maybe hoping the stores will one day sell profits alongside wine and cheese.

2. Introduction

Once upon a time, before quick commerce, 15-minute deliveries, and influencer grocery hauls,Spencer’swas the place to go for imported pasta and overpriced olives. Now it’s the place you accidentally walk into when your Swiggy order is late.

Founded in 2017 under the modern avatar of theRP-Sanjiv Goenkaempire, Spencer’s promised a “premium retail experience.” The problem? India wasn’t ready to pay premium prices for basic groceries while the kirana guy offered credit and gossip for free.

As of FY24, the company runs167 stores (including 34 under Nature’s Basket). Nine stores were opened that year, but by H1 FY25, management closed37 loss-making ones, proving that expansion without profitability is like buying a treadmill for show — looks good, achieves nothing.

The East now contributes82% of revenue, a fact that’s as risky as betting your entire IPL fantasy team on one player. North contributes a measly4%, South 14%. Essentially, Spencer’s is an eastern monopoly with western ambitions and northern losses.

The FY26 half-yearly loss? A jaw-dropping₹12,540 lakhconsolidated. If optimism could pay rent, they’d be debt-free.

3. Business Model – WTF Do They Even Do?

Spencer’s Retail runs amulti-format retail businessoffering groceries, FMCG, apparel, general merchandise, personal care, home essentials, electronics — basically, everything your neighborhood supermarket already sells, but with mood lighting and air conditioning.

Theirstore formatsare:

• Convenience (small-format)stores for the quick grab-and-go crowd.
• Hypermarketsfor the “let’s spend three hours and ₹10,000 on biscuits” crowd.
• Nature’s Basket, their premium gourmet chain, for the “I only buy quinoa flown in from Peru” demographic.

And then there’sORIPL, the e-commerce arm that contributes14.5% of revenue, handling food, grocery, apparel, and liquor. It’s their omni-channel hope in a world where “quick commerce” is eating everyone’s lunch. Spencer’s plans to fight that battle throughJIFFY, their yet-to-be-launched quick-commerce dream — because clearly, one more loss-making vertical will fix things.

Recently, they’ve gone boutique withArtisan Pantry(luxury groceries) andWholesale Bazaar(B2B for feeder markets). The company seems to be trying everything except the one thing that matters: making money.

4. Financials Overview

Let’s put the mess into a table so it hurts less:

Annualised EPS = (-7.08 × 4) =-₹28.32.At CMP ₹46.2, theP/E is undefinedbecause, well, you can’t divide by negative profit — though if you did, you’d get a P/E that makes astrology look scientific.

Commentary:Losses are narrowing marginally, which the management will call “improvement.” But when EBITDA is negative, interest cost is ₹41 crore a quarter, and other income (₹4 crore) is the only bright spot, that’s not progress — that’s accounting CPR.

5. Valuation Discussion – Fair Value Range (Educational Only)

Let’s humour ourselves with numbers.

Method 1: P/E ApproachComparable small retailers trade aroundP/E 50–60(see V-Mart