RPTECH Q1 FY26 earnings call.
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Revenue
₹3,152.1 Cr
verified against source
Revenue YoY
-26%
reported change
EBITDA
₹111.4 Cr
latest reported figure
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record provenance
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Where this quarter sits.
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What the record says.
Rashi Peripherals delivered a mixed Q1 FY26 with revenue declining 26% YoY to ₹3,152 crore due to the absence of the ₹1,500 crore NMDC data center deal from last year. However, core distribution revenue grew 11.4% YoY, outpacing a flattish PC market (~3% growth), demonstrating execution strength. EBITDA margin expanded 140bps to 3.5% driven by favorable business mix (channel/retail growth vs. lower-margin online), though management explicitly guided this is not sustainable long-term, reaffirming 2.7-2.8% as the normalized annual range. PAT grew 12.1% to ₹61.7 crore. Key risks include: (1) working capital extending to 73 days from delayed payments, (2) competitive pressures squeezing large AI data center deal margins, and (3) gradual Windows 10 refresh adoption in India. Growth catalysts include 10,000 GPU government order expected in Q2, doubling quick commerce business, and strong embedded segment growth at 35-38%.
Colored figures show movement against the previous available record.
Guidance to track
- Management maintains its stated aspiration to grow at 2x the PC market rate. With market projected at 6-9% for 2025, Rashi targets double-digit growth excluding large project deals.
- Management explicitly stated the 3.5% Q1 margin is not sustainable and reaffirmed 2.7-2.8% as the annual guidance range, subject to customer and product mix.
- Market expected to accelerate to 8-10% in Q2 driven by festive season demand, with H2 projected at 12-14% as Windows 10 end-of-support creates upgrade cycle.
- Government order for 10,000 GPUs likely to be finalized in Q2 and available for distribution companies to bid, though margins and ROCE will be evaluated before participation.
Risks flagged
- Working capital days extended to 73 days versus historical 50-55 days due to delayed payments (~8 days impact) and early creditor payments for vendor incentives. This drove higher interest costs and cash deployment.
- Management acknowledged that competition has intensified in AI data center deals with lower ROCE than first-mover NMDC project. Despite multiple pipeline opportunities in Q2-Q4, they are selectively evaluating each deal for profitability.
- An analyst (Atria Pal) raised concerns about ₹400 crore disputed tax claim as contingent liability and inventory risk. Management downplayed tax risk but acknowledged provisioning for inventories held over 1-2 years as prudent accounting practice.
- Despite industry excitement around Windows 10 end-of-support in October 2025, management admitted India's adoption speed is slower than developed markets—refresh cycle will be gradual starting H2 rather than immediate surge.
Key quotes
- While margin flows down mainly from GP also the operational efficiencies remain at same level. However for long-term trend we would not say that this is maintainable because it's a factor depending upon the customer mix and the sales mix.
- In the previous deals we had the first mover's advantage where we picked up the first deal. So there the ROC was better. But now the competition is hotting up not only amongst the vendor suppliers but amongst the distribution also.
- While our adoption and discussions are on an accelerated path but when it comes to spending and upgrading then our speed is relatively lower. So yes adoption will come but it may be gradual starting from H2 and then subsequently in the next few years.
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