Any current/future new fundraising through debt or equity?

Currently, the company is maintaining a comfortable debt-equity ratio of 0.49x. Future debt usage will be contingent on business capital needs and opportunity justification. The company has borrowing capacity available to utilize debt if Return on Capital (ROC) and Return on Equity (ROE) justify fund infusion. CFO mentioned plans to cautiously test debt instruments like debtor factoring after credit rating upgrade to AA-. No explicit plans for immediate equity fundraising or large new debt issuances were mentioned. The focus remains on reducing existing debt burden through positive cash flow a

Any current/future capex/capital investment/strategic investment?

Rashi Peripherals has expanded its distribution network with the commencement of two new branches in Maharashtra, specifically in Nanded and Baramati, targeting rapid IT consumption growth in these tier-2 towns. The company continues to invest in strengthening its presence in tier-3 and tier-4 cities as part of its overall expansion strategy. There are no explicit mentions of new large-scale capital expenditure projects or strategic investments beyond branch expansions up to Q2 FY'26. Investments in technology infrastructure include continuous upgrades to their SAP HANA and SAP CRM syste

Future growth expectations in sales/revenue/volumes?

Core business is expected to grow comfortably at 15% year-on-year (Page 18). Excluding large project deals, revenue growth was about 20% year-on-year in Q2, and 16% excluding large deals for H1 FY’26 (Pages 5,7). Over the long term, the company has maintained a CAGR of 20% for the last 20 years and aspires to continue similarly (Page 7). Unit volume growth was about 16-16.5% year-on-year, with overall market volume growth of 8% (Page 17). The company is open for new large projects with a strong funnel for Q3 and Q4 (Page 8). Increased penetration into AI-led and embedded semiconductor business

Future growth expectations in earnings/operating earnings/profits/EPS?

The company aims to maintain a net margin of around 1.5% for the long term, reflecting steady profitability. EBITDA margins have shown stability at approximately 2.6%-3%, with operating efficiencies being continuously optimized. Revenue excluding large project deals is growing at a healthy 20% year-on-year. Large projects are being approached cautiously, ensuring ROCE and ROE justify capital infusion, which supports margin sustainability. Adjusted PAT excluding extraordinary items showed growth of 7.4% for the quarter and 9.7% for H1 year-on-year. ESOP expenses are expected to be around Rs. 72

Current/ Expected Orderbook/ Pending Orders?

Rashi Peripherals has a strong funnel of large projects for Q3 and Q4. The company is open and ready to take up large projects again, after successfully completing previous large deals like the Yotta project. For the Dell commercial business, which started revenue booking in Q2, substantial execution and growth are expected in Q3 and accelerated growth in Q4. The enterprise segment, growing at 30% to 50% year-on-year, is a key focus, with SMBs (companies with 100 to 1500 employees) as primary targets. The company maintains sufficient bandwidth to manage both run-rate business and large project

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Rashi Peripherals LtdQ3 FY25IT - Hardware

Rashi Peripherals Ltd Q3 FY25 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹781P/E: 12.4Market Cap: ₹3.0K CrSector: IT - Hardware

Management growth scorecard

Revenue

Category 3

Margin

Category 3

Fundraise

Order

Yes

Capex

Yes

2 of 5 growth signals are positive.

Full analysis

Revenue guidance

Category 3

→Core business is expected to grow comfortably at 15% year-on-year (Page 18).
→Excluding large project deals, revenue growth was about 20% year-on-year in Q2, and 16% excluding large deals for H1 FY’26 (Pages 5,7).
→Over the long term, the company has maintained a CAGR of 20% for the last 20 years and aspires to continue similarly (Page 7).
→Unit volume growth was about 16-16.5% year-on-year, with overall market volume growth of 8% (Page 17).
→The company is open for new large projects with a strong funnel for Q3 and Q4 (Page 8).
→Increased penetration into AI-led and embedded semiconductor businesses is expected to contribute to growth (Pages 4,13).
→Expansion into tier 2 and tier 3 markets with new branches to capture additional opportunities (Page 19).

Margin guidance

Category 3

→The company aims to maintain a net margin of around 1.5% for the long term, reflecting steady profitability.
→EBITDA margins have shown stability at approximately 2.6%-3%, with operating efficiencies being continuously optimized.
→Revenue excluding large project deals is growing at a healthy 20% year-on-year.
→Large projects are being approached cautiously, ensuring ROCE and ROE justify capital infusion, which supports margin sustainability.
→Adjusted PAT excluding extraordinary items showed growth of 7.4% for the quarter and 9.7% for H1 year-on-year.
→ESOP expenses are expected to be around Rs. 72 million per quarter over the next year, slightly diluting EPS but supporting talent retention.
→The company remains optimistic on double-digit revenue growth excluding large deals, with embedded and AI-related segments poised for margin improvement and growth.
→Cash flow management and working capital control support sustainable profit delivery.

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Fundraise plans

→Currently, the company is maintaining a comfortable debt-equity ratio of 0.49x.
→Future debt usage will be contingent on business capital needs and opportunity justification.
→The company has borrowing capacity available to utilize debt if Return on Capital (ROC) and Return on Equity (ROE) justify fund infusion.
→CFO mentioned plans to cautiously test debt instruments like debtor factoring after credit rating upgrade to AA-.
→No explicit plans for immediate equity fundraising or large new debt issuances were mentioned.
→The focus remains on reducing existing debt burden through positive cash flow and improving working capital management.
→Any future capital infusion decisions will be driven by business needs and value creation opportunities.

Order book

Yes

→Rashi Peripherals has a strong funnel of large projects for Q3 and Q4.
→The company is open and ready to take up large projects again, after successfully completing previous large deals like the Yotta project.
→For the Dell commercial business, which started revenue booking in Q2, substantial execution and growth are expected in Q3 and accelerated growth in Q4.
→The enterprise segment, growing at 30% to 50% year-on-year, is a key focus, with SMBs (companies with 100 to 1500 employees) as primary targets.
→The company maintains sufficient bandwidth to manage both run-rate business and large project execution simultaneously.
→Ongoing capital constraints in data centers mean Rashi is selective in project participation, focusing on deals with justified returns on capital employed (ROCE).
→Overall, Rashi's order book reflects robust pipeline and participation across traditional, enterprise, and new business segments.

Capex plans

Yes

→Rashi Peripherals has expanded its distribution network with the commencement of two new branches in Maharashtra, specifically in Nanded and Baramati, targeting rapid IT consumption growth in these tier-2 towns.
→The company continues to invest in strengthening its presence in tier-3 and tier-4 cities as part of its overall expansion strategy.
→There are no explicit mentions of new large-scale capital expenditure projects or strategic investments beyond branch expansions up to Q2 FY'26.
→Investments in technology infrastructure include continuous upgrades to their SAP HANA and SAP CRM systems, along with Power BI, ensuring a digitized ecosystem for efficient inventory and sales management.
→The company is testing debtors factoring (enabled by their upgraded AA- credit rating) and considering optimal financing options for future growth opportunities.
→Participation in sector-specific exhibitions like Electronica Embedded Exhibition indicates focus on embedded and semiconductor vertical growth, which could imply future strategic investments, though these are still evolving.

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