Spencer's Retail Limited (SPENCERS) Earnings Call Transcript & Summary

Good afternoon, everyone. It gives a great pleasure to welcome you all to the 7th Annual General Meeting of Spencer's Retail. In view of the circulars issued by the Ministry of Corporate Affairs, Government of India and the Securities and Exchange Board of India, the meeting is being conducted through video conferencing and other audiovisual means. As a requisite quorum is present, I declare the 7th AGM open. I would also like to acknowledge the presence of our esteemed Board members, auditors and scrutinizer in this meeting. In case there is any connectivity problem for me at any point, as per the decision of our Board of Directors, Mr. Anuj Singh will conduct the remaining proceedings of the meeting. I would now request our company secretary to brief you about some basic rules.

Thank you, sir, and good afternoon, everyone. Question-and-answer session for the members registered as speaker will open once all the resolutions set forth in the notice are tabled. The speakers are requested to keep their queries and questions short and brief for smooth conduct of the meeting. The company has provided the facility to the members to cast their votes through remote e-voting, which concluded yesterday. Members who have not casted their votes yet and who are present in the meeting can cast their votes during the meeting through e-voting system provided by NSDL. The said facility will continue to be available for the next 15 minutes post conclusion of this meeting. Since this AGM is being held through video conferencing, other audio visual means, therefore, there will be no proposing and seconding of resolutions mentioned in the notice convening this AGM. The auditor's report is being taken as read since the accounts do not have any audit qualifications or adverse remarks. All requisite registered documents will remain accessible on an NSDL website for the inspection during the continuation of this meeting. Thank you very much. Now requesting Chairman, sir, to take the proceedings further. Thank you.

As the notice has already been circulated to all the members, I take the notice convening the meeting as read. As we gather here today to reflect upon the past year, I want to acknowledge that the journey has been marked by a mix of achievements and challenges. The retail industry continues to evolve rapidly, influenced by dynamic consumer behaviors and technological advancements. Amidst this ever-changing landscape, Spencer's Retail has demonstrated resilience and adaptability, although not without encountering hurdles along the way. FY '24 was a tough year with degrowth in topline, driven by planned cost corrections in H1 at Spencer's, while at Nature's basket, the business grew, driven by new store openings, launch of the new format Artisan pantry, same-store growth and improved margins. On a consolidated basis, revenue was INR 2,345 crores versus INR 2,453 crores in the previous year. And on a consolidated basis, the gross margins were 20.1%. Spencer's delivered a negative 6% growth, while sustaining gross margins of 18.9%. Nature's Basket delivered a 7.8% growth with expansion of gross margin to 28.5%. For the year, EBITDA was INR 14 crores versus INR 36 crores the previous year. And the PAT for the year was minus INR 266 crores. Like I said the year was one of correction, one of consolidation and one of taking the right steps to ensure a sustainable future. Some of the things that we did in this year were: one, sharpening efforts towards an accelerated path to profitability by identifying and executing growth levers, optimizing operating expenses and taking harsh decisive calls on underperforming stores. For example, we exited Tamil Nadu and Kerala as regions last year, and this exercise continues on to the first half of this financial year. Second, we strengthened omnichannel proposition through successful launch of the express delivery e-commerce in Kolkata and which has now been expanded to Lucknow and Varanasi as well. We also [indiscernible] into the wholesale bazar to cater to the need of neighborhood kiranas in North Bengal. And the idea with this was to address distribution gaps in feeder markets. This initiative is designed to empower small retailers by providing them with direct access to a wide range of products at competitive prices, thereby streamlining their supply chain and enhancing their ability to meet consumer demands effectively. And lastly, on Nature's basket, while the story was a lot more positive, I think one of the good things that we did in the last year was the launch of the Artisan pantry format, which repositioned Nature's Basket as India's only gourmet grocery retailer. We launched this format across 2 cities. And this year, we will be taking it across a few more cities in the country as well. Overall, we also opened 9 stores for both the brands. With that, I now move on to the formal resolutions for today's meeting. Item #1 pertains to the adoption of financial statements, both stand-alone and consolidated of the company and reports of the Board of Directors and auditors for the year ended 31st March 2024. It is an ordinary resolution as stated in the notice. Item #2 pertains to the reappointment of Mr. Anuj Singh, DIN number - 09547776, who retires by rotation as a Director of the company. This is again an ordinary resolution as stated in the notice. Item #3 is regarding the issuance of securities up to an aggregate amount of INR 300 crores. This is a special resolution as stated in the notice.

I would now like to invite the pre-registered members to speak. Mr. Manoj Gupta?

Good afternoon, respected Chairman, Board of Directors, name is Manoj Kumar Gupta, joined this meeting from Kolkata. I thank to you that you are running a very good company Spencer's and very renowned company. So I strongly support all the resolutions, and I welcome the new company's secretary and I believe that he will help the small investors in every aspect and resolve their issues. Sir, what's your future plan for this company? How you will increase the footprint in the stores? And sir, how you fare the competition, which business you are running, there is a lot of competition from the big brands like a big stance, -- like is it Tata BigBasket, Reliance, Reliance stores and Adani has also planned to enter in this retail business. So what's your plan in that regard, sir? And products should be available to attract the young generation, the young generation want some fast food and fast items and others. So products should be available because sometimes your products are not available. But I thank to your ready-made brands are very popular, [ B2Me ] (sic) [2BMe] and very good and very exclusive and very useful because I also use for my children's and I are always use to give to someone, B2Me (sic) [2BMe] because your B2Me (sic) [2BMe] garments are very good and very exclusive, fabric is good and stitching are very good. So no one can complain about that brand and that garments. And try to inspire more items in the ready, ready-to-wear brands to inspire the young generation to attract to buy that and launch in your market. And have you any plan to open any new stores near to NCR area? Because in the NCR area, there is -- in central area like the central is also growing like Raipur, Bilaspur, Chhattisgarh, Madhya Pradesh, Indore, Bhopal. Indore is the second economic capital of Madhya Pradesh, several big companies' headquarters are there. So think about to open like -- Varanasi, you have opened a good store last year and I went to Varanasi, I was very happy to see your 2 stores near to Kashi temple. So such type of stores should open in fast-growing tier-2 or tier-3 cities. Think about -- and sir [Foreign Language]. With this, I strongly support the resolutions, and I hope that we will meet sir. Thank you.

Thank you so much, sir. Ms. Elizabeth Mascarenhas?

Am I audible, sir?

Yes, ma'am, you are.

Thank you very much. Good afternoon. Respected Chairman, Mr. Shashwat Goenka, CEO and MD, Anuj Singh, other members of the Board, my dear fellow shareholders in the VC meet. I am Ms. CE Mascarenhas, I'm speaking from Mumbai. First of all, I thank the company's secretary, Mr. Mr. Vikash Kumar Agarwal and his team, especially Mr. Navin Kumar Rathi, for sending me a beautiful annual report, which is full of pictures of our stores, of our products. It's such a treat to see the balance sheet and well documented balance sheet. Very good, keep it up. And at the same time, adhering to all the norms of corporate governance. What to say, I mean, upsets are there in the business. So I cannot -- every day is not Sunday. So our working is not well with losses, mostly accumulated losses. Now here, my question is when and how long it will take to wipe these losses and come in profit like Trent was nothing one day. I still remember I was holding some 15, 20 years back, and Trent was never moving. And today, it has become you and I expect even our Spencer will become after, say, 3, 4 years, Trent of India, I'm sure about it. And especially with your leadership, you will not leave one stone untouched to give this sort of result. Okay. Well, I mean, I'm happy with the stores. Of course, I don't have it in Bombay. I wish to see the layout of this too, but I got that layer to see in the pictures, very good. Now congratulations for all awards, they are given on Page 41 and also CSR work also. Now I go directly to my queries. Sir, we have 4,445 employees. I would like to know the average age, what around average youngsters or oldies and the attrition level? We have, in the Spencer brand, we have total 167 stores. Out of that, 80 stores are large stores and 87 are small stores and another 9 will be added. My query here is how many are owned from them, 167? Because I like the DMart way, they have lots of owned stores. Now I come to the Nature's Basket, which is also a very good which all like vegetables, fruits and all. It is a very good format. Nature's basket focuses in Bombay, Bangalore, Delhi, NCR and Kolkata. How much of average margins we get from the sales from this Nature's Basket? We have 34 stores across India. I would like to know how many are owned among them. Now really -- because the rents are very high in these places like Bangalore, Mumbai, we have 790-plus employees. Here also, I would like to know on what average age and attrition and the ratio between male and female? Just, I don't want to say anything more. I know times are up, times are down, and I only say future roadmap for the next 5 years, CapEx requirement for organic and inorganic growth. And sir, I would like to share the board also, which vertical will be a growth engine for the future? With this, I support all the resolutions. I thank you very much for giving me this opportunity to speak. And once again, I wish you all very good health because it is the health, which will give us wealth. With this, I thank you so much. [Foreign Language] may God bless you and my company. Thanks a lot.

Thank you so much, Ma'am. [ Mr. Praful Chavda ].

[Foreign Language].

Hello?

I think, sir, he lost his connection, network problem.