Spencer's Retail Limited — Q3 FY26 earnings call

Call held 9 Feb 2026

Management summary

Spencer's Retail reported a solid Q3 FY26 with strong QoQ revenue and EBITDA growth, driven by momentum in its online platform Jiffy and a successful membership program. While consolidated revenue saw a marginal YoY degrowth due to festive season shifts and accounting adjustments, the company achieved positive unit economics for Jiffy and is focused on operational efficiency and sustainable growth. Challenges included a drop in other income and a YoY gross margin reduction for Nature's Basket.

Highlights

  • Consolidated revenue grew 13% QoQ, indicating strong sequential recovery.

  • Consolidated EBITDA (post INDAS) improved to INR8 crores in Q3 FY26 from 0 crores in Q2 FY26.

  • Spencer's standalone EBITDA (post INDAS) increased to INR15 crores from INR13 crores QoQ.

  • Online sales (Jiffy) demonstrated robust 27% YoY growth, reaching INR54 crores in Q3 FY26.

  • Jiffy's unit economics turned positive for the first time, generating INR6 per order (RGM minus fulfillment cost).

  • The membership program, launched in July 2025, has enrolled over 70,000 members, contributing 25% of overall sales and showing significantly higher engagement metrics.

Concerns

  • Consolidated revenue experienced a marginal degrowth of 2.7% YoY, partly due to the split festive season and accounting treatment for membership cashback.

  • Other income saw a significant YoY decline from INR65 crores in Q3 FY25 to INR11.7 crores in Q3 FY26.

  • Nature's Basket gross margin reduced by 300 basis points YoY.

  • A one-time provision for new Labour Code requirements led to slightly higher operating expenses for the quarter.

  • Operational challenges were noted in Nature's Basket's Bangalore operations.

Key financials

  1. Consolidated EBITDA (post INDAS) ₹8 Cr -46.7%YoY
  2. Consolidated Revenue — -2.7%YoY
  3. Consolidated Gross Margin 21.2%
  4. Online Sales (Jiffy) ₹54 Cr +27%YoY
  5. Online Losses (ORIPL) ₹9 Cr -25%YoY
  6. Consolidated SPSF ₹1,800/sq ft/month

What they filed

Q1 FY27: revenue up 12.7%, net profit up 3.2% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue518 517 412 416 445 −14%503 −3%436 +6%469 +13%
EBITDA-45 12 -11 -7 -4 +91%7 −42%-7 +36%8 +214%
Net profit-87 -47 -68 -62 -64 +26%-58 −23%-66 +3%-60 +3%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Spencer's Retail (Standalone)
    12% Revenue QoQ Growth20% Gross Margin₹15 Cr EBITDA (post INDAS)19.6% Gross Margin (YTD)
  • Nature's Basket
    ₹81 Cr Revenue300 bps Gross Margin YoY Reduction₹1 Cr Financial EBITDA

Guidance & targets

Profitability

  • Spencer's operational EBITDA breakeven Profitability · Q1 FY27 · High confidence Breakeven
    We are quite confident that we are moving in the right direction towards a true operational EBITDA breakeven for Spencer's I would say, in two quarters from now.

    — Anuj Singh

  • Nature's Basket Gross Margin Profitability · Ongoing · Medium confidence 29-30%
    true margins of this business have to be what we have delivered in the past, in the region of 29-30%.

    — Anuj Singh

  • Online EBITDA losses Profitability · FY27 · Medium confidence Lower, only for investments
    EBITDA losses for next year would be largely on account of whatever little investments we are doing on online.

    — Anuj Singh

Customer Base

  • Membership Program Members Customer Base · Q4 FY26 end · High confidence 100,000
    We are hoping to exit this year, which is at the end of Q4 with about 100,000 members for the membership program which is, I think, in 9 months is good progress.

    — Anuj Singh

  • Membership Program Members Customer Base · FY27 · Medium confidence Double
    And the intention is to see how we can double that in the year going forward.

    — Anuj Singh

Sales Mix

  • Online/Out-of-store Sales Mix Sales Mix · Q1 FY27 · High confidence 20%
    We are today at making progress at around 16-17%, and we expect to get to that level, if not at the end of Q4 by early quarter 1 of next year.

    — Anuj Singh

Sales

  • E-commerce Sales (standalone) Sales · FY26 · High confidence 200 crores
    I think we'll see good organic growth. We will exit this financial year with close to INR200 crores coming from our e-commerce business alone, phone deliveries extra.

    — Anuj Singh

Revenue Growth

  • Spencer's Revenue Growth Revenue Growth · Q4 FY26 · Medium confidence mid-single-digit
    Q4, I can give some guidance that on the Spencer's part of the business, we are looking at good growth. We will get to, I would say, mid-single-digit growth as far as Spencer's is concerned on top line.

    — Anuj Singh

Volume

  • Jiffy Orders per month Volume · Ongoing · High confidence 300,000

    From 240,000 today

    Our contribution margins are positive. We just need to get increase our number of orders. We need to get to a level of close to 300,000 orders a month. We are currently at around 240,000.

    — Anuj Singh

Productivity

  • SPSF Productivity · Ongoing · Medium confidence 2,500 Rs/sq ft
    But I would love to trade a 20% margin for a 19% margin, if I can get a 10% sales growth and if my SPSF can be INR 2,500 a square foot.

    — Anuj Singh

What to watch in Q4 FY26

Spencer's Operational EBITDA Breakeven

Q1 FY27
Current Not yet breakeven
Target Breakeven

Why it matters

Achieving operational EBITDA breakeven is a key profitability milestone for the core Spencer's business.

We are quite confident that we are moving in the right direction towards a true operational EBITDA breakeven for Spencer's I would say, in two quarters from now.

Risks & concerns

  • Significant YoY drop in other income

    medium

    Other income declined from INR65 crores in Q3 FY25 to INR11.7 crores in Q3 FY26, impacting overall financial EBITDA.

    Management acknowledged

  • Nature's Basket gross margin reduction

    medium

    Nature's Basket experienced a 300 basis point reduction in gross margin YoY due to internal factors and supplier negotiations.

    Management acknowledged

  • Online growth impacting modern trade and kiranas

    medium

    Online channels are growing at the expense of both modern trade and kiranas, posing competitive pressure.

    Management acknowledged

  • Irrational competition in quick commerce

    medium

    Management noted that leading quick commerce players have spoken about 'irrational competition', implying unsustainable practices that could affect the market.

    Management acknowledged

  • Split festive season impact on YoY comparisons

    low

    The festive season was split between Q2 and Q3 this year, unlike last year when it was fully in Q3, impacting YoY growth comparisons.

    Management acknowledged

  • Accounting treatment for membership cashback impacting reported sales

    low

    Cashback given to members for the membership program is netted off from overall sales, affecting reported revenue figures.

    Management acknowledged

  • One-time provision for new Labour Code requirements

    low

    A one-time provision for new Labour Code requirements led to slightly higher operating expenses in Q3 FY26.

    Management acknowledged

  • Gifting studio hived off impacting Nature's Basket sales

    low

    The gifting studio, previously part of Nature's Basket, was hived off last year, contributing to a YoY drop in Nature's Basket sales.

    Management acknowledged

  • Operational challenges in Nature's Basket (Bangalore)

    low

    Internal operational challenges in Nature's Basket's Bangalore operations are currently being addressed.

    Management acknowledged

Q&A highlights

7 direct
Momentum Drivers Across Business Segments and Geographies Direct
If I look across the three business segments, it is online, which is growing for us. It is parts of our offline business, which is growing in the Spencer's part. And Nature's Basket has a bit of catch-up to do as far as growth is concerned. ... Eastern UP has done, I would say, relatively better in terms of growth, both QoQ and YoY compared to East as far as Spencer's is concerned. And for Nature's Basket, Bombay and West, has done slightly better than South.

Provides a granular view of growth drivers and areas needing improvement across the diverse business portfolio.

Asked by Anita Bajaj

New Store Opening Strategy and SPSF Improvement Direct
we are not actively looking at adding because so far, we believe that we have a footprint from where we can juice more sales. We are not close to the ceiling as far as productivity per store is concerned as measured in SPSF. ... Our SPSF, though have kind of improved compared to last year. So, at a consol level, we are at about INR1,800 a square foot per month.

Clarifies the company's capital-light expansion strategy focusing on optimizing existing assets rather than aggressive new store additions, with a key productivity metric provided.

Asked by Anita Bajaj

Jiffy's FY27 Growth Targets and Profitability Approach Partial
I'm not going to call out my FY '27 growth thing. ... We just need to get increase our number of orders. We need to get to a level of close to 300,000 orders a month. We are currently at around 240,000. ... online will be a measured growth. It will definitely be growth, but it will not be growth at any cost or growth by incurring a huge loss.

Management provides specific operational targets for Jiffy (orders per month) and a clear philosophy of 'measured growth' for online, indicating a focus on profitability over aggressive market share gains.

Asked by Anita Bajaj

Competitive Intensity in Quick Commerce and Spencer's Differentiators Direct
We are not in a race with them to either compete on that scale or on that business model of opening thousands of dark stores or losing hundreds of crores per quarter on that. ... Our model is to offer our Spencer's customer an online option and also acquire customers who are loyal to us and who are familiar with the Spencer's ecosystem. ... fresh is what keeps people coming back to the stores. ... 6% cash back on our monthly spend.

Explains Spencer's unique value proposition and strategy to counter intense quick commerce competition, focusing on loyalty, fresh produce, and omnichannel presence rather than direct price wars.

Asked by Sunny Bhadra

Online vs. Offline Shopping Behavior of Members Direct
this membership program by design has been given to the offline consumer. ... active recruitment pushing is happening more in our offline business. And we don't see a big overlap today between the members' offline purchase and online purchase. So, most of our members are buying this in the stores and the offline.

Clarifies the primary channel for member engagement and recruitment, indicating a strategic focus on driving footfalls and loyalty in physical stores through the program.

Asked by Sidharth Negandhi

Impact of Online Growth on Modern Trade and Kiranas Direct
online is growing at the expense of both modern trade as well as kiranas. ... It is building an omnichannel proposition where we not just build online, but we also make sure how do we make offline resilient. ... strengthening our assortment, whether it be strengthening our continuous availability, whether it be strengthening our price proposition by being consistent pricing and fair pricing. ... introducing a membership loyalty reward program.

Acknowledges the competitive pressure from online channels on both traditional retail formats and outlines the company's multi-pronged strategy to build resilience and an omnichannel presence.

Asked by Sunny Bhadra

Role of Private Labels as a Differentiator Direct
We do have a pretty strong private label mix. Our mix of private label is more pronounced and is stronger as far as staples is concerned. Close to 35% of our staples category is accounted for by private label. ... some parts of cleaning. ... fashion and apparel. ... Packaged food also to some extent, yes.

Highlights the strategic importance and penetration of private labels in key categories, particularly staples, as a differentiator and margin driver.

Asked by Sunny Bhadra

Trade-off Between Percentage Margins and Absolute Rupee Gross Margin (RGM) Direct
I don't think the issue on Spencer's is on the margins. I think the margins at 21.2% for the quarter and YTD margins at Spencer's close to 20-19.6%. I think they're healthy. ... It is about your rupee gross margin. I would love to trade off. ... if I can get a 10% sales growth and if my SPSF can be INR 2,500 a square foot.

Reveals management's strategic focus on driving absolute RGM through sales growth and productivity (SPSF) even if it means a slight compromise on percentage margins, indicating a mature approach to profitability.

Asked by Sunny Bhadra

3 min read 7 chapters

Detailed narrative

Q3 FY26 Performance Overview and Strategic Context

Spencer's Retail reported a 'very solid performance' in Q3 FY26, with consolidated revenue growing 13% QoQ. Despite this, the company experienced a marginal 2.7% YoY degrowth, primarily attributed to the festive season being split between Q2 and Q3, and an accounting adjustment for membership cashback. Consolidated EBITDA (post INDAS) significantly improved to INR8 crores, up from 0 crores in the previous quarter, though it was lower than INR15 crores in Q3 FY25. Operating expenses were slightly higher due to a one-time provision for new Labour Code requirements.

Spencer's Standalone Business Momentum and Profitability

The Spencer's standalone business demonstrated strong momentum with approximately 12% QoQ growth. Its EBITDA (post INDAS) reached INR15 crores in Q3 FY26, an increase from INR13 crores in Q2 FY26. Gross margins for Spencer's were robust at 20%, showing an improvement of 40 basis points QoQ and 30 basis points YoY. Management expressed confidence in achieving operational EBITDA breakeven for Spencer's within the next two quarters, targeting Q1 FY27.

Online Business (Jiffy) Growth, Unit Economics, and Strategy

The online platform, Jiffy, was a key growth driver, with sales increasing 27% YoY to INR54 crores in Q3 FY26. Notably, Jiffy achieved positive unit economics for the first time, generating INR6 per order after accounting for RGM (INR100+) and fulfillment costs (INR94). The platform processed around 235,000 orders per month with an average order value (AOV) of INR775. The company aims to increase monthly orders to 300,000 without compromising unit economics and expects online EBITDA losses for FY27 to be lower, primarily for strategic investments.

Successful Membership Program and Customer Engagement

Spencer's membership program, launched in July 2025, has rapidly gained traction, enrolling over 70,000 members by the end of Q3 FY26, representing 10-11% of the active customer base. These members exhibit significantly higher engagement, with an 80%+ N+1 retention rate, an average monthly spend exceeding INR7,500 (3x non-members), and a shopping frequency of over 4 times a month (2x non-members). The company targets 100,000 members by Q4 FY26 end and plans to double this count in FY27.

Nature's Basket Performance and Operational Focus

Nature's Basket saw a QoQ revenue improvement to INR81 crores from INR68 crores, though it experienced a YoY drop partly due to the gifting studio being hived off last year. The segment's gross margins faced a 300 basis point reduction YoY, which management attributes to internal factors and supplier negotiations, expressing confidence in restoring them to the 29-30% range. Nature's Basket recorded a financial EBITDA of INR1 crore for the quarter, and its app was upgraded using Jiffy's robust tech backbone to enhance online capabilities.

Omnichannel Strategy and Value Proposition

Spencer's is committed to an omnichannel strategy, targeting an online/out-of-store sales mix of 20% by Q1 FY27, up from the current 16-17%. The company differentiates itself through a wide assortment, high-quality fresh produce, and a strong value perception reinforced by its membership program offering up to 6% cashback. Management emphasized focusing on driving absolute rupee gross margin (RGM) through sales growth and improving Sales Per Square Foot (SPSF) to a target of INR2,500, rather than solely optimizing for percentage margins.

Competitive Landscape and Risk Management

Management acknowledged the impact of online growth on both modern trade and kiranas but clarified that Spencer's is not competing with large quick commerce players on scale or aggressive burn. The company's model leverages its existing store footprint for fulfillment and targets loyal customers. Risks highlighted included a significant YoY decline in other income from INR65 crores to INR11.7 crores and the ongoing challenge of 'irrational competition' in the quick commerce space, which management believes will eventually lead to more pragmatic business models.

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