Spencers Retail Ltd

We streamlined our store network by gradually phasing out underperforming locations across NCR and the

Southern States. This allowed us to focus investments and operational attention on high-performing geographies such as West Bengal and Uttar Pradesh, which now form the core of our renewed growth strategy.

Dear Shareholders,

The year 2024-25 was marked by decisive transformation and strategic clarity. We initiated fundamental shifts across our business, resetting our operating model, sharpening our marketing focus, and paving the way for sustained profitability. These targeted changes reflect our commitment to build a resilient organisation that remains future-ready amidst the rapidly evolving retail landscape.

Navigating the Economic and Retail Environment

The global economy grew by 3.3% in 2024. However, the year 2025 brought along significant headwinds, including escalating geopolitical tensions, major trade disruptions, and persistent inflation. These challenges are expected to moderate the global growth rate to 2.8% in the corresponding period. The imposition of sweeping tariffs and volatile capital flows further amplified uncertainty, adding more complexities to an already fragmented international ecosystem. Against this backdrop, India stands as an embodiment of resilience, maintaining robust momentum to deliver a sound GDP growth of 6.5% for 2024-25. Driven by steady consumption, improving rural demand, and prudent macroeconomic stewardship, the nation continues to solidify its stature as a global economic powerhouse.

Amidst this encouraging macroeconomic momentum, the Indian retail sector is transforming rapidly. Shaped by rising aspirations and digital fluency, consumers are increasingly seeking a seamless blend of affordability, quality, and convenience across physical and digital channels. At Spencer's, we are strategically well-positioned to capitalise on this shift through our multi-format presence and sharp customer focus.

Strategic Shift Rooted in Regional Strength

During the year under review, our Company has delivered a standout performance in its core markets, particularly across Eastern India and Uttar Pradesh, where the brand lower store-level profitability.

Recognising the need to align our resources with areas of highest potential, we undertook a strategic realignment of our retail footprint.

As part of this initiative, we streamlined our store network by gradually phasing out underperforming locations across

NCR and the Southern States. This allowed us to focus investments and operational attention on high-performing geographies such as West Bengal and Uttar Pradesh, which now form the core of our renewed growth strategy.

This consolidation has brought sharper regional clarity, unlocked significant cost efficiencies, and enabled a leaner, more agile operating led to a 15% decline in consolidated revenue to 1,995 Crores. However, this strategic consolidation was instrumental in aligning our operations more closely with market realities and customer needs, thereby strengthening our core business foundations.

Importantly, this sharper focus on high-performing geographies and cost discipline delivered a four-fold increase in EBITDA to 60 Crores, with gross margins remaining stable at 19.6% — a clear indication of improved operational efficiency.

Furthermore, we successfully narrowed our loss before tax to

247 Crores, compared to

267 Crores in the previous fiscal. These outcomes validate the efficacy

Transforming Retail Experience...

Enjoys strong customer affinity, deep market penetration, and sustained growth momentum. These regions consistently outperformed others in terms of footfall, sales per square foot, and overall store productivity — a clear signal of the immense opportunity that lies ahead.

In contrast, operations in North (especially NCR) and South India faced continued challenges, marked by muted consumer traction and model. Overheads were optimised at both corporate and store levels, positioning us structurally for sustainable and profitable growth in the years ahead.

Financial Turnaround

This year's performance reflects a deliberate and disciplined recalibration of our business footprint. The phasing out from underperforming regions, as part of our portfolio rationalisation strategy, of the choices we made and the disciplined execution that followed.

Business Highlights and Portfolio Momentum

Our retail portfolio continued to evolve in step with changing consumer aspirations. In 2024-25, we delivered a revenue of 1,701 Crores (SRL Standalone), backed by steady offline traction and a sound 13.6% growth in online sales. The segment turned EBITDA positive, aided by focussed inventory optimisation, stringent cost control, and a selective expansion strategy within high-potential clusters.

Complementing this momentum, our premium format, Natures Basket, continued to refine its niche. With revenue of 294 Crores and an improved EBITDA margin of 6.4%, the brand is carving a distinct space among experience-seeking, quality-driven consumers. Initiatives like the Elysium Membership Programme and a redesigned mobile app are enhancing customer loyalty and augmenting digital contribution, which we aim to scale further in the year ahead.

Building on this multi-faceted momentum, we forayed into quick commerce space with JIFFY – our 30-minute delivery platform, tailored to urban convenience. Following its launch in Kolkata and subsequent rollout in Lucknow and Varanasi, JIFFY is showing encouraging early traction with higher-than-industry average order values and a steadily expanding base of transacting users.

Importantly, this format is being scaled through our existing store infrastructure, ensuring agility, customer proximity, and operational prudence without heavy cash burn.

Together, these developments reflect our ability to navigate across diverse formats and price points, guided by a disciplined focus on margin enhancement and capital efficiency.

Omnichannel Progress

Our out of store sales remains a strategic growth lever within our integrated retail model. In 2024-25, out of store sales accounted for 15% of total revenue, while we strive to grow this further to 20% in 2025-26. Our mobile app continued to perform well with a rating of 4.5 and a conversion rate of over 25% – at par with industry leaders. Marketing

Our premium format, Natures Basket, continued to refine its niche. With revenue of 294 Crores and an improved EBITDA margin of 6.4%, the brand is carving a distinct space among experience-seeking, quality-driven consumers. Initiatives like the Elysium Membership Programme and a redesigned mobile app are enhancing customer loyalty and augmenting digital contribution.

efforts persistently focussed on relevance and reach, with campaigns like ‘Joh Bhi Chaho Jhat Se Pao' bolstering brand recall for JIFFY and accelerating our acceptance among a younger, convenience-driven audience. Across formats and channels, we are building a unified and intuitive shopping experience, in sync with evolving consumer needs.

Resilient Governance

We have established a comprehensive governance framework that prioritises transparency, accountability, and ethical conduct across all operations. This framework is subject to regular reviews and enhancements to ensure alignment with global standards and regulatory requirements. The organisation is guided by a board comprising 50% independent directors, facilitating impartial oversight and diverse perspectives. Additionally, we have implemented rigorous internal controls to uphold financial integrity and operational transparency, ensuring that all processes adhere to the highest standards of accountability.

Our People, Our Culture

Our transformative journey is a reflection of the extraordinary dedication of our people at every level. From the frontline teams to the regional leadership and support staff, their adaptability and ownership remain instrumental in driving our progress. By prioritising digital capability building, strengthening store-level dashboards, and embedding a culture of collaborative, data-backed decision-making, we have empowered our teams to respond swiftly to challenges and seize opportunities.

Strategy and Outlook

Having reset our cost structures and sharpened our geographic footprint, we are now firmly positioned to enter a decisive phase of growth. In 2025-26, our agenda is forward-looking and priorities are clearly defined. We will widen presence within our core markets, accelerate the scale and reach of JIFFY, amplify digital contribution across Spencer's and Natures Basket, and augment per-store productivity through operational efficiency. We are targeting operational EBITDA breakeven in both businesses – a milestone we believe is well within our reach, as we are confident in our ability to drive consistent and profitable growth.

India's retail sector is poised for rapid transformation, and we are ready to lead with a differentiated proposition that blends value, convenience, and quality. We are committed to build a future-ready organisation that creates lasting value for customers, employees, partners, and shareholders.

A Note of Gratitude

To our stakeholders thank you. Your belief, in our Company's future, continues to be our greatest strength. It is your trust, encouragement, and constructive engagement that shape our decisions and drive our performance. As Spencer's gears up for the disciplined, value-accretive growth ahead, we look forward to your continued partnership in this shared journey.