DC Infotech grew revenue 33% to ₹737 cr in FY26 and profit 46%, and management says it is on track for ₹1,000 cr. It now presents itself as an AI-infrastructure and cybersecurity company rather than a hardware distributor.
The balance sheet tells a second story. Receivables rose 61% and inventory 62%, so roughly ₹74 cr went into working capital, more than three times the year’s profit. Our notes from the presentation and the concall are below, but before that:
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From box-mover to AI infrastructure: DC Infotech’s ₹1,000 cr plan
FY26 in numbers (consolidated)
To understand the business model, follow ₹100 of revenue:
- About ₹91 goes to buying the products it resells.
- About ₹4.80 is left as EBITDA.
- Under ₹3 ends up as profit.
That is typical of a distributor. Small improvements in margin matter a lot, and so does how much cash each sale ties up.
Q4: a strong quarter with a forex hit
- Q4 revenue was ₹239.5 cr, up 38.6% year-on-year and 22.2% over Q3.
- EBITDA margin fell to 4.27% from 5.23% in Q3, and PAT fell 12.8% quarter-on-quarter.
- The reason: operating expenses more than doubled, to ₹7.25 cr from ₹3.36 cr in Q3. Management said most of this was an unrealized forex loss on unpaid import bills, caused by the dollar’s rise, and called it one-time.
- The jump of about ₹3.9 cr in expenses is close to 40% of Q4 EBITDA, so Q2 will show whether costs really returned to normal.
The real story: working capital
- Customers pay more slowly. Receivable days rose to about 104 from 86.
- Stock sits longer. Inventory days rose to about 63 from 51.
- The funding came from debt and new equity. Debt-to-equity rose to 0.81 from 0.70. Equity rose ₹35.6 cr against ₹21.1 cr of profit, and share capital went up, which points to roughly ₹14 cr of fresh shares issued. The deck doesn’t explain this.
- Operating cash flow was likely negative. With ₹74 cr going into working capital against ₹21 cr of profit, it very likely was. The deck has no cash-flow statement, so this is my inference.
- Returns fell. RoCE dropped to 18.7% from 21.9%.
Management’s explanation: bigger, multi-technology AI and data-center projects need more capital per order.
Who it sells for
- Brand mix (deck): Samsung 17% of revenue, Arbor 14%, Netgear 10%, D-Link 8%, others 51%.
- Samsung: DC is Samsung’s exclusive partner in India for active LED displays (the screens in boardrooms and auditoriums). It also runs an authorized Samsung service center, which the MD says is the only one in India outside Samsung’s own factory.
- The Samsung number doesn’t match. Asked for Samsung’s share, the MD said ₹150–175 cr (20–24% of revenue). The deck says 17%, or about ₹125 cr.
- NETSCOUT/Arbor (DDoS protection): DC handles 60–70% of their India business.
- Revenue by pillar (call): networking about 30%, unified communication about 36%, cybersecurity about 27%. A few years ago networking was over 50%.
The pivot: services and AI infrastructure
- Services today: software and services are about 20% of revenue (19% in the deck).
- Services target: the MD’s aim is 25% “in a couple of years.” The deck says “double the share of services revenue.” These are quite different goals.
- AI-infrastructure push: the plan is to offer a complete set for AI-ready data centers. DC already sells networking, security and observability tools, and is now adding compute, storage, power, cooling and rack-and-stack.
- Target customers: captive and colocation data centers. Hyperscalers like AWS and Google have their own suppliers.
What management guided
- No numeric guidance for FY27. The ₹1,000 cr revenue aspiration was raised by an analyst, and the MD said the company is “on track.”
- Margins: no target given. The MD said only “better than this.”
- Top three priorities: complete the AI-infrastructure product set, win larger solution-led projects, and build offerings for emerging AI-related security threats.
We track companies with solid balance sheets, low-key execution, before they show up on everyone’s radar — and break down the numbers that actually matter in our research.
As always, this is not a stock recommendation — This note is for informational purposes only and not a buy/sell recommendation. Please do your own due diligence before investing.
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Ekansh Mittal
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