Rashi Peripherals: Navigating India's Digital Frontier with Strategic Growth and Financial Discipline

Rashi Peripherals Limited, a prominent player in India's ICT distribution landscape, has unveiled a robust performance for the second quarter and first half of the financial year 2026. The company's latest investor presentation and earnings call transcript highlight a period of strategic expansion, disciplined financial management, and an optimistic outlook amidst a resurgent global PC market and India's accelerating digital transformation.

For Q2 FY26, Rashi Peripherals reported a consolidated revenue of ₹415.54 crore, marking a significant 12.1% year-on-year growth. Excluding large project deals, this growth surged to an impressive 20% year-on-year, underscoring the strength of its core business. The company's EBITDA stood at ₹10.81 crore, reflecting a 3.5% year-on-year increase, with an EBITDA margin of 2.6%. Profit After Tax (PAT) for the quarter was ₹5.92 crore. More notably, the adjusted PAT, which excludes extraordinary items, reached ₹6.64 crore, demonstrating a healthy 7.4% year-on-year growth. For the first half of FY26, the consolidated revenue was ₹730.76 crore, with an adjusted PAT of ₹12.81 crore, up 9.7% year-on-year. This consistent performance, coupled with a focus on profitability, positions Rashi Peripherals as a key enabler in India's evolving digital ecosystem.

Strategic Alliances and Market Expansion

Rashi Peripherals has been proactive in strengthening its market position through strategic alliances and an expanded distribution network. The company announced new brand alliances, notably with Dell Commercial Technologies business and the Indian startup Teachmint Technologies. The Dell partnership is particularly significant, with management anticipating substantial revenue in Q3 FY26 and accelerated growth in Q4 FY26. Dell's commercial business in India is estimated to be around $3 billion, presenting a vast opportunity for Rashi Peripherals to capture a larger market share.

In line with its commitment to nationwide coverage, the company expanded its distribution network by commencing new branch offices in Baramati and Nanded, both in Maharashtra. This move is part of a broader strategy to penetrate tier-3 and tier-4 cities, ensuring seamless customer demand fulfillment. Management actively reviews the profitability of each branch, reflecting a disciplined approach to expansion. The company's extensive network now caters to over 10,000 customers across 700-plus towns and cities in India.

Diversified Portfolio and Future-Ready Categories

Rashi Peripherals' diversified portfolio, split across Personal Computing, Enterprise and Cloud Solutions (PES) and Lifestyle and IT Essentials (LIT) segments, provides resilience and positions it to capitalize on India's digital transformation. On a trailing 12-month basis, the PES segment contributed 57% of the revenue, while LIT accounted for 43%. The company is aggressively expanding beyond conventional hardware into future-ready categories such as AI-enabled services, embedded and semiconductor solutions, and comprehensive enterprise and cloud solutions.

The embedded/semiconductor business, in particular, is showing strong traction. While currently a small percentage of overall revenue, it is expected to make a significant difference in the overall scheme of things within two to three years, driven by the increasing demand in the AI space. This strategic pivot towards high-growth, technology-intensive segments underscores the company's foresight in anticipating market trends.

Financial Discipline and Risk Management

Financial prudence remains a cornerstone of Rashi Peripherals' strategy. The company reported cashflow-positive financial highlights for Q2 and H1 FY26, a testament to its effective working capital management. Working capital days stood at 61 for H1 FY26, with trade receivables at 46 days, trade payables at 44 days, and inventory at 59 days. The company has successfully reduced debt and brought working capital under control, including the full collection of a significant receivable from a large project deal from the previous year.

Furthermore, Rashi Peripherals maintains a strong credit profile, evidenced by a long-term rating of CRISIL AA-/Stable and a short-term rating of CRISIL A1+. Its provision for doubtful debts is remarkably low, ranging from 0.01% to 0.02%, which is among the lowest in the industry. This is supported by robust credit insurance, highlighting proactive risk management. Management has also adopted a more cautious, ROCE-focused approach for future large project deals, learning from past experiences.

Outlook and Industry Tailwinds

The management expressed optimism about the future, driven by several industry tailwinds. The global PC market is experiencing a resurgence, fueled by the inexorable Windows 10 sunset, Windows 11 refreshes, and the increasing adoption of AI-based laptops. In India, Q2 FY26 PC shipments climbed 6% to 3.6 million units, with notebooks leading an 8% charge. Government initiatives like Digital India and Make in India are further accelerating domestic hardware manufacturing and digital adoption across various sectors.

Despite potential global component shortages in CPU, memory, SSD, and hard drives due to high demand from data centers and AI, management is confident in maintaining supply through vendor relationships. The company's core business is expected to grow at a comfortable 15% year-on-year, with a long-term PAT margin target of 1.5%. Rashi Peripherals is well-positioned to leverage these opportunities, bridging global innovation with India's rapidly evolving digital ecosystem.

Conclusion

Rashi Peripherals Limited's Q2 and H1 FY26 performance reflects a company with strategic clarity, disciplined execution, and a strong financial foundation. Through new alliances, network expansion, and a focus on future-ready technologies, the company is not just adapting to the digital frontier but actively shaping it. Its commitment to operational efficiency and prudent risk management reinforces investor confidence, making it a compelling entity in India's dynamic ICT distribution sector.