At a Glance
Spencer’s Retail just dropped its Q1 FY26 report, and let’s just say it’s less “shopping spree” and more “discount sale of profits.” Standalone loss ₹31 Cr, consolidated loss ₹62 Cr, and revenues stagnating at ₹416 Cr. Operating margins remain negative (-2%), and debt still weighs down the books. Investors? They’ve already exited to buy groceries at Avenue Supermarts instead.
Introduction
Once a pioneer of modern retail in India, Spencer’s is now a case study in “how not to scale profitably.” Despite being part of the RP-Sanjiv Goenka Group and having premium formats like Nature’s Basket, the company continues to bleed cash. With revenue falling and costs climbing, Spencer’s is burning through its reserves faster than its stock price is falling.
Business Model (WTF Do They Even Do?)
Spencer’s operates:
- Department Stores (FMCG, food, apparel, electronics)
- Nature’s Basket (premium grocery)
- Specialty sections like Gourmet, Patisserie, and Wine & Liquor
Despite a presence across 167 stores, the company struggles with scale, supply chain inefficiencies, and competition from giants like DMart and Reliance Retail.
Financials Overview
Q1 FY26 Snapshot:
- Revenue: ₹416 Cr (-24% YoY)
- Operating Profit: -₹7 Cr (OPM -2%)
- PAT: -₹31 Cr (loss narrows but still painful)
FY25 Performance:
- Revenue: ₹1,863 Cr
- PAT: -₹265 Cr
- ROCE: -7.8%
Observation: Revenue is shrinking, losses persistent, and there’s no clear turnaround plan.
Valuation
Forget DCF; this is a “Discounted” Retail Model.
- P/E Method
- EPS: Negative → P/E is undefined (or infinite if you’re optimistic).
- EV/EBITDA
- EBITDA: Negative → valuation meaningless.
- Asset Valuation
- Fair value purely based on liquidation worth of assets – ₹30–40 range.
🎯 Fair Value Range: ₹30 – ₹45
At ₹60, the stock is priced like hope, not numbers.
What’s Cooking – News, Triggers, Drama
- Q1 Losses Continue: ₹62 Cr consolidated loss.
- Store Openings? Nope, more closures expected.
- Debt Pressure: ₹1,571 Cr borrowings as of FY25.
- Turnaround Plan? Still in the oven.
Balance Sheet
| (₹ Cr) | Mar 2025 |
|---|---|
| Assets | 1,310 |
| Liabilities | 2,278 |
| Net Worth | -662 |
| Borrowings | 1,571 |
Remarks: Net worth is negative. Auditors are re-appointing, but investors may not.
Cash Flow – Sab Number Game Hai
| (₹ Cr) | Mar 2023 | Mar 2024 | Mar 2025 |
|---|---|---|---|
| Operating | 27 | 35 | 37 |
| Investing | -26 | 11 | -20 |
| Financing | -5 | -28 | -27 |
Remarks: Cash flows positive but minimal – survival mode.
Ratios – Sexy or Stressy?
| Metric | Value |
|---|---|
| ROE | Negative |
| ROCE | -7.8% |
| P/E | NA |
| PAT Margin | -8% |
| D/E | >1 |
Remarks: Ratios scream distress louder than quarterly calls.
P&L Breakdown – Show Me the Money
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 2,345 | 1,995 | 1,863 |
| EBITDA | -9 | -43 | -51 |
| PAT | -266 | -246 | -265 |
Remarks: Losses are the only thing compounding here.
Peer Comparison
| Company | Revenue (₹ Cr) | PAT (₹ Cr) | P/E |
|---|---|---|---|
| Avenue Supermarts | 61,648 | 2,706 | 103 |
| V-Mart Retail | 3,353 | 53 | 120 |
| Shoppers Stop | 4,719 | 18 | 325 |
| Spencer’s Retail | 1,863 | -265 | NA |
Remarks: Competitors print profits; Spencer’s prints losses.
Miscellaneous – Shareholding, Promoters
- Promoters: 58.8% (unchanged)
- FIIs: 7.5% (declining)
- DIIs: 2% (tiny)
- Public: 31%
Sarcastic Take: Promoters hold, FIIs flee, and public is stuck holding shopping bags.
EduInvesting Verdict™
Spencer’s Retail is stuck in a retail war it’s losing. Negative margins, mounting debt, and lack of clear growth make it a risky play. Unless there’s a dramatic turnaround (like a DMart merger or magic fairy dust), this stock remains a “cautionary tale.”
SWOT Quickie:
- Strengths: Legacy brand, presence in metro cities.
- Weaknesses: Losses, negative equity, poor scale economics.
- Opportunities: Asset monetization, restructuring, potential investor infusion.
- Threats: Competition from DMart, Reliance Retail, and online players.
Final Word: Spencer’s needs a miracle. Until then, this is a stock for thrill-seekers, not investors.
Written by EduInvesting Team | 30 July 2025
SEO Tags: Spencer’s Retail, Q1 FY26 Loss, RP-Sanjiv Goenka, Retail Stocks
