SpencerRetail_InvestorPresntn.pdf (2.5 MB)
Spencer Retail is the underdog of Indian retail scene and IMO very undervalued right now . The company has great brand value and from reading this thread I understand that the management is not aggressive enough which is a major concern . From the investor presentation we can see that the company is focusing on omnichannel retail also and has grown in that segment very rapidly by clocking a 4.5times growth in GMV compared to last year showing that omni channel retail can be major growth driver. In todays landscape many ecommerce and online only retail companies are setting up offline brick and mortar stores to deliver faster ( quick commerce) Spencers can capture market share in this segment since they already have a good network of stores and are planning to add more . Since Spencers offers groceries predominantly IMO the customer retention will be high ( non grocery items one can buy from any shop but groceries people tend to buy from the same place since they know the quality of product ) . One trend I have been noticing in my locality (Tier-2 city) is that people now are tired of online shopping after staying cooped up in their homes and they go out and buy from the shop directly . The reasons for ditching online shopping for groceries and essentials
are many minor inconveniences like minimum ordering amount is present so we cant buy small items ( most of tier2 and tier3 cities have more smaller purchases) , the items get mixed up and sometimes they wont send the item which we ordered , we might not be home when they come to deliver , the freshness of grocery cannot be assured always . Even in my family , during COVID lockdown we used to order online but nowadays we go out to the shop and buy required items . The point is that the business in brick and mortar retail shops will increase going forward . DMART which is a giant in offline retail has a P/E of around 220 and the total market share of organized retail in India is only a meagre 12percent . IMO Spencers has huge runway for growth and rerating . On the technical side of things it looks like 100 was the support and the CMP bounced up after hitting the 200day EMA and support level last week. Looking forward for valued inputs from fellow members regarding the path the company is taking now.
Disc : Taken position after the stock bounced up from 200day EMA at around Rs110 .All of the above are my assumptions and might be completely wrong ,please do your own research before buying this stock.