ARHAM

Arham Technologies reported H1 FY26 sales of ₹46 crores, with televisions contributing ₹30 crores, fans ₹10 crores, and air coolers ₹4 crores. The company is actively transforming from a regional EMS player to a high-growth mass-market consumer electronics brand. This shift is supported by strategic investments in manufacturing capacity, backward integration, and product diversification into smart TVs and home appliances, aiming to capitalize on the multi-year growth trend in the Indian consumer electronics sector.

The company plans to invest ₹15 crores from its recent fundraise into CAPEX for backward integration, focusing on plastic injection molding and sheet metal fabrication. This initiative, targeted for completion by the end of FY27, will enable in-house manufacturing of TV cabinets and air cooler plastic cabinets, which were previously outsourced. Management anticipates a significant margin improvement of 5-7% for air coolers and 5% for TV cabinets, alongside reduced logistics costs.

Arham successfully raised ₹60 crores, which is being strategically deployed: ₹15 crores for CAPEX, ₹32 crores for working capital, and ₹12 crores for branding and marketing initiatives. These investments are designed to drive capital-efficient growth, with a projected FY26 sales target of ₹115-120 crores and an ambitious long-term goal of ₹300 crores by FY28. The company's vision emphasizes continuous enhancement of asset productivity and shareholder returns.

To support its growth ambitions, Arham plans a substantial increase in its branding and marketing spend, allocating ₹10-12 crores over the next two years, including celebrity endorsements. This aims to build a strong aspirational brand value and accelerate market penetration. Concurrently, the company intends to expand its distribution network significantly, from approximately 80 distributors to 250 by the end of FY27, while also entering new key geographies such as Gujarat, Rajasthan, and Maharashtra.

Arham is strategically entering the interactive flat panel display (IFPD) market, primarily targeting government schools and educational institutions. Management highlighted the substantial opportunity, citing a central government budget of ₹24,000 crores for smart schools and ₹400 crores allocated in Chhattisgarh. This segment is expected to offer high margins and has the potential to significantly boost the company's revenue by 2x-3x, positioning it as a potential 'game-changer'.

The recent GST reduction on TVs above 32 inches (from 28% to 18%) has led to a notable increase in demand for larger screen sizes (43 inches and above). This trend, coupled with the phasing out of smaller models, has driven an increase in the average TV selling price from ₹5,300-5,400 in FY25 to ₹6,000 in FY26. The company observes a broader market shift towards premiumization, with consumers increasingly seeking advanced features and larger screen sizes.

Arham has forged a strategic 'Brand Capital' deal with Bennett Coleman Company, exchanging equity for ad spends over a five-year period. This partnership will leverage the Times of India group's extensive media properties to enhance brand visibility. Additionally, the company plans to increase promoter holdings by converting unsecured loans into equity, a move that has already received shareholder approval, demonstrating commitment to long-term value creation.