Detailed Narrative
Strong Q3 FY26 Performance Driven by Volume and Price
Rashi Peripherals reported a robust Q3 FY26, with consolidated revenue growing 43% year-on-year to ₹4,030 crores and consolidated PAT surging 132% year-on-year to ₹75 crores, achieving a PAT margin of 1.85%. This strong performance was attributed to both price and volume growth, with approximately 50% of the Q3 revenue increase coming from volume and the other 50% from higher average selling prices, supported by dollar appreciation. For the nine months ended December 31, 2025, consolidated revenue grew 5% year-on-year to ₹11,338 crores, and PAT rose 25% year-on-year to ₹196 crores.
Market Tailwinds and Strategic Positioning
The company benefits from a global market trend of regaining momentum in personal computing, driven by enterprise refresh cycles, Windows 10 end-of-support, and AI-ready devices. India is mirroring this trend, with the domestic PC market experiencing its strongest quarter ever, growing over 10% year-over-year. Rashi Peripherals positions itself as a technology adoption enabler, leveraging its pan-India network of over 10,000 distribution partners across 700+ locations to bridge global innovations with India's expanding digital economy.
Operational Excellence and Network Expansion
Rashi Peripherals continues to strengthen its distribution network, having launched its 55th branch in Solapur during the quarter. This expansion enhances regional presence and coverage in core markets. The company's strong performance reflects the robustness of its distribution platform and operating model, with management emphasizing disciplined planning and execution to drive consistent growth across all business verticals.
Working Capital Management and Cash Flow
The company maintained tight discipline in working capital management, with working capital days stable at 60 days. Inventory days marginally increased to 56 days to support strong demand, while debtor days improved significantly to 47 days from 61 days a year ago, reflecting stronger collection efforts. Creditor days stood at 43 days. For the year-to-date, the company generated a positive operating cash flow of ₹34 crores, a turnaround from outflows in previous periods.
Outlook on Demand, Pricing, and Volume
Management expects continued positive revenue growth in Q4 FY26 and beyond, driven by further price hikes. While unit-wise volume growth is anticipated to continue for the next 1-2 quarters, it may flatten thereafter, with higher selling prices playing a larger role in revenue growth. The company acknowledges that component price increases (e.g., RAM 2x-3x, other products 20-30%) are a concern, potentially impacting affordability, but they are actively managing inventory to mitigate supply constraints.
Capital Allocation and Debt Management
The company's debt-to-equity ratio stands at 0.5, with the cost of borrowing in the range of 7.5% to 8%. Following a credit rating upgrade to AA-, the primary objective is to further reduce borrowing costs. Management is open to factoring trade receivables if it adds value to ROC and ROE. The company also prudently recognized an incremental impact of over ₹4 crores related to new labor code notifications, primarily due to increased gratuity obligations and higher leave liabilities.