Everyone’s focused on direct AI beneficiaries — GPU makers, cloud companies, data centers. But here’s a second-order effect most investors are missing: the AI buildout is diverting chips to hyperscalers, squeezing regular PC component supply. RAM prices are up 2-3x, laptops up 20-30%.
And India’s largest ICT distributor — Rashi Peripherals — quietly had one of its best quarters ever: 43% revenue growth, 132% PAT growth.
Key highlights below:
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Rashi Peripherals – Q3 FY26 Financial Highlights
- Revenue from operations grew 43% YoY to Rs 4,030 crore
- PAT grew 132% YoY to Rs 75 crore; PAT margin at 1.85%
- Growth was driven by both volume (~50%) and price/ASP increase (~50%)
- One of the best performing Q3 quarters for the company — usually Q3 sees a major dip after a high Q2 seasonal quarter
- 9M FY26: Revenue at Rs 11,338 crore (up 5% YoY) and PAT at Rs 196 crore (up 25% YoY)
- Importantly, the 9M growth of 5% came without any project orders — last year had ~Rs 2,000 crore of project revenue in the base
What’s Driving the Growth?
- Preponing of purchases: Corporates aware of impending price hikes are preponing purchases from Q1 FY27 to Q4 FY26
- Global PC refresh cycle: Large-scale enterprise refresh cycles, Windows 10 end-of-support transition and accelerated adoption of AI-ready devices
- Component price hikes: RAM prices up 2x-3x, notebook prices up 20-30%, further hikes expected. This is driven by AI infrastructure build-out diverting chip supplies to hyperscalers
- Advance inventory planning: Channel partners stocked inventory ahead of expected price increases and supply shortages
Key Management Commentary
On volume vs price outlook:
- Unit-wise demand expected to be flattish for next 2 quarters (QoQ basis)
- However, YoY volume growth will continue for at least 1-2 quarters as planning was done 6 months in advance
- Revenue growth will be driven by higher ASPs even if volumes are flat — management is “pretty optimistic”
- No softening of prices visible in the pipeline
On margins:
- Distribution margins are normally fixed on a percentage basis — so higher ASPs directly improve per unit profitability
- Current margin trend expected to continue; no major variation anticipated
- Improved cycle efficiency and economies of scale helped improve overall margins in Q3
On Dell partnership:
- Dell revenue was small/insignificant in Q3 — “just a start”
- Expected to be decent in Q4 and substantial from FY27
On Micron/Crucial:
- Micron has declared Crucial consumer brand as end of life — supply continues till April
- Will have a hit in FY27, but Micron enterprise business will continue
- Management has “backup plans 1, 2, 3” to cover the gap
On working capital:
- Working capital days at 60 days — stable and well managed
- Debtor days improved from 61 to 47 days YoY
- Inventory days at 56 days; slightly higher to support strong demand
- 9M operating cash flow turned positive at Rs 34 crore
- Debt to equity at 0.5x; cost of borrowing at 7.5-8%
- Credit rating upgraded to AA-minus club — primary objective is to reduce borrowing cost
On large deals pipeline:
- Pipeline is decent but execution is slower due to supply constraints and price volatility
- Suppliers not giving price confirmations valid for 6-9 months anymore
- Expect some large deal conversions in FY27
On OEM-distributor relationship:
- No power dynamics between OEM and distributor — they work as extended arms
- Terms of trade are long-term contracts, not renegotiated quarterly/monthly
- In current scenario, entire discussion is about upcoming price hikes, not discounts
On Q3 demand vs tertiary sales:
- Q3 was more inventory stocking at channel level
- But from January onwards, good tertiary (end consumer) sales seen across all product segments as consumers and corporates have started preponing purchases
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Disclaimer: This is not a recommendation to buy/sell any of the stocks mentioned above. The securities quoted are for illustration only and are not recommendatory.
Ekansh Mittal
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