GNG Electronics Limited: Riding the AI Wave with Sustainable Refurbishment

GNG Electronics Limited has delivered a strong performance in Q2 and H1 FY26, showcasing robust growth and enhanced profitability. The company reported a 24.7% year-on-year (YoY) revenue growth in Q2 FY26, with revenue from operations reaching Rs. 439.9 crore. For the first half of the fiscal year, consolidated revenue stood at Rs. 752.2 crore, marking a 23.7% YoY increase. This growth reflects the company's continued emphasis on operational efficiency, a stronger presence in existing markets, and strategic expansion into new geographies.

Profitability metrics also saw significant improvement. The EBITDA margin expanded by 46 basis points to 10.6% in Q2 FY26, while the PAT margin improved by 88 basis points to 7.4%. This consistent execution, coupled with the company's asset-light model, positions GNG Electronics well for sustained growth and profitability in the second half of the year.

Strategic Positioning in the AI Era

GNG Electronics is strategically positioning itself to capitalize on the burgeoning demand for AI-enabled computing systems. The company believes the next wave of growth will be shaped by how technology moves closer to the user, with laptops and computing devices becoming access points of intelligence powered by edge AI. The management highlighted that AI is driving nearly 45% of U.S. GDP growth, with projections of adding over USD $15 trillion to the global economy by 2030.

In this environment, GNG's business model, centered around the refurbishment and reconfiguration of high-end laptops, offers an agile and sustainable solution. By sourcing, renewing, and upgrading premium laptops, GNG delivers enterprise-grade performance without depending on new chip production cycles. Refurbished laptops, optimized for AI workloads and enhanced memory, storage, and GPU capabilities, meet modern user needs at a fraction of the cost and time required for new manufacturing.

Financial Highlights (INR Crore)

Operational Excellence and Global Expansion

GNG Electronics has consciously strengthened its brand ecosystem, integrating procurement, refurbishment, quality control, and after-sales service under a single framework. The proprietary brand, Electronics Bazaar, enjoys strong credibility and global demand across more than 40 countries. The company's sales are diversified across these countries, protecting it from region-specific risks. Approximately 97% of the revenue is now directly contributed by the Electronics Bazaar brand, backed by a comprehensive warranty cover.

The company is expanding its global operating base to capture the next wave of opportunity, particularly as the computing landscape shifts towards AI-driven performance and data-intensive workloads. This includes an entry into infrastructure-level refurbishment, a natural progression from its leadership in laptop and ICT devices. GNG has preemptively secured long-term spaces across India, UAE, and the United States to serve as high-capacity refurbishment and testing centers for advanced computing systems, including servers, data centers, hardware, and enterprise-grade IT infrastructure. This expansion aligns with an asset-light model, not requiring heavy Capex.

Revenue Split by Product (H1 FY26)

Outlook and Management Commentary

Management reiterated its guidance of 20%-25% top-line growth and 75 basis points margin improvement. They expect EBITDA margins to be above 10% for the current year, with continued enhancement. The second half of the fiscal year is typically stronger in terms of revenue and projections due to year-end and fiscal closings globally. The company also anticipates interest cost savings of Rs. 10-12 crore in the second half due to the utilization of funds from the recent equity raise.

While the business is working capital-intensive, leading to increased receivables and advances to vendors, management emphasized robust inventory monitoring with no history of write-offs or bad debts. Investments in talent, sales, and marketing are ongoing to support global expansion. GNG Electronics is confident in sustaining strong revenue growth and promoting circular economy practices worldwide, leveraging its unique position at the intersection of AI capability and circular efficiency.