Rashi Peripherals Q1FY26: PAT up 12%, margin 3.5%

Key takeaway from Q1FY26

Rashi Peripherals Limited (NSE: RPTECH) reported its consolidated results for Q1FY26 (quarter ended June 30, 2025) with a sharp year-on-year revenue drop but improved profitability. Revenue came in at Rs 3,152.1 crore, down 26.1% YoY, largely because the base quarter included a large project deal. The company said that excluding this one-off impact, the business delivered 11.4% revenue growth YoY on a comparable basis.

Profitability improved meaningfully during the quarter. EBITDA rose 23% YoY to Rs 111.4 crore, while profit after tax (PAT) increased 12.1% YoY to Rs 61.7 crore. The company also pointed to tighter execution and operational efficiencies as key contributors.

How the quarter unfolded

According to the company’s Q1FY26 press release dated August 5, 2025, profitability gains came despite the weaker reported top line. Management attributed performance to a higher focus on run-rate business and better operational execution across brands and regions. It also highlighted that channel business grew the fastest within the mix.

The improvement in margins was a central theme of the update. The company reported an EBITDA margin of 3.53% in Q1FY26, up around 140 basis points, and a PAT margin of 2%, up 70 basis points. Management noted that while the current EBITDA margin is high, a long-term sustainable annualised range is expected to be 2.7% to 2.8%.

The result summary for the quarter also showed quarter-on-quarter improvement in the reported numbers. Consolidated total income rose 5.1% QoQ to Rs 3,160.05 crore, while PAT increased 31.1% QoQ to Rs 61.70 crore. EPS for the quarter stood at Rs 9.30.

Revenue: headline decline, adjusted growth narrative

Rashi Peripherals reported revenue of Rs 3,152.1 crore in Q1FY26 versus Rs 4,274.5 crore in Q1FY25, a decline of 26.1%. The company explicitly linked the YoY drop to the absence of a large project deal recorded in the previous year, described as a one-off AI server deal.

On an adjusted basis excluding that one-off project impact, the company said revenue grew 11.4% YoY. The commentary indicates that underlying demand was supported by run-rate distribution, with faster growth seen in channel-led business. This framing is important for investors tracking the sustainability of distribution volumes versus project-led revenue.

Profitability: EBITDA up 23%, PAT up 12.1%

EBITDA (including other income) increased to Rs 111.4 crore in Q1FY26 from Rs 90.6 crore in Q1FY25, a 23% rise. PAT increased to Rs 61.7 crore from Rs 55.0 crore, up 12.1% YoY. The company linked the improvement to a better mix of higher-margin segments and cost discipline.

From the BSE-derived financial statement snapshot for Q1FY26, profit before tax (PBT) stood at Rs 80.27 crore and tax expense at Rs 18.57 crore, resulting in PAT of Rs 61.70 crore. This dataset also indicated expenses of Rs 3,079.77 crore for the quarter.

Working capital and debt position

The company reported a rise in working capital intensity during the quarter. Working capital days increased to 73 in Q1FY26, up from an average of 50 to 55 days. Such a change can matter in distribution businesses where inventory and receivables can expand quickly, particularly when the mix shifts.

As of June 30, 2025, gross debt stood at Rs 1,190 crore, with net debt being almost similar, as per the company’s commentary. While the filing did not provide additional detail on maturity profile or interest cost, the disclosed debt and working capital movement provide a clear view of balance-sheet load entering the year.

Portfolio and operational updates

Rashi Peripherals said it added four new brands to its brand portfolio during Q1FY26. It also stated that the surveillance business grew multiple times, signalling growth in a specific category within its distribution footprint.

On the business mix, management shared that on a trailing 12 months basis, the “PA segment” contributed 57% of revenue and “LIT” accounted for 43%. Region-wise, 62% of revenue came from metro cities and the rest from non-metro geographies.

The company also divested its entire 51% stake in ZNet Technologies during the quarter, as stated in the update.

Corporate actions and board decisions

The board approved, among other items, the acquisition of VDA Infosolutions Private Limited and the reappointment of statutory auditors for a second tenure of five years.

Separately, in a board meeting held on April 16, 2026, the company approved strategic corporate structuring actions. This included incorporating a wholly owned subsidiary in India, proposed as Rashi Semiconductor Solutions Pvt. Limited, with investment approved up to Rs 80 crore (subject to regulatory approvals). The company also approved incorporating a step-down subsidiary in Singapore, proposed as Rashi Semiconductor Solutions Pte. Ltd. (subject to regulatory approvals). In addition, it approved acquisition of 100% shareholding of RP Tech Electronics Limited from the promoters at a consideration of Rs 10 per share, totalling Rs 1,00,000, along with investment up to Rs 10 crore, subject to requisite approvals.

Snapshot table: Q1FY26 versus comparable periods

Why this result matters for investors

The Q1FY26 print highlights a common challenge in distribution-led businesses: headline growth can swing significantly due to project timing and base effects. Rashi Peripherals’ claim of 11.4% adjusted revenue growth, despite a reported 26.1% decline, puts focus on the stability of run-rate distribution.

At the same time, the quarter showed margin improvement, with EBITDA margin reported at 3.53% and PAT margin at 2%. Management’s guidance that sustainable EBITDA margins could normalise to 2.7% to 2.8% suggests investors may need to track whether Q1FY26 margins remain elevated or revert toward that band.

Conclusion

Rashi Peripherals’ Q1FY26 results combined a revenue decline driven by a one-off base effect with improved margins and higher profits. Key monitorables from the update include working capital days at 73, gross debt of Rs 1,190 crore, and the pace of run-rate business growth excluding large project deals. Investors will also track progress on the company’s approved corporate actions, including the VDA Infosolutions acquisition and the subsidiary formation plans disclosed for strategic alignments.