🔍 At a Glance
Rashi Peripherals Ltd is one of India’s largest ICT (Information & Communication Technology) product distributors, servicing 50+ global brands with nationwide reach. But with 2% operating margins, rising debt, and a 60-day working capital cycle, is this a value pick or a margin trap?
💡 TL;DR
- Revenue (FY25): ₹13,773 Cr (+24% YoY)
- PAT (FY25): ₹210 Cr (+46% YoY)
- Margins: OPM = 2%, Net Profit Margin = 1.5%
- ROE: 12.5%, ROCE: 14%
- Stock Movement: Down ~35% from ₹475 IPO high
- Valuation: P/E = 9.6x, P/B = 1.14x
- Fair Value Range: ₹280 – ₹350 (based on 11-14x FY25 EPS of ₹31.6)
🌟 Business: The Unsung Giant of Distribution
- Rashi isn’t a brand you buy. It’s the brand your retailer bought from.
- Distributes 50+ global tech giants: HP, Dell, Lenovo, Apple, Samsung, Canon, Cisco, etc.
- Products range from laptops and printers to wearables and network gear.
- 52 branches across India — a true supply-chain juggernaut.
Think of it as the D-Mart backend for tech retail. Invisible, essential, and unglamorous.
📊 Financials: Growth with Razor-Thin Safety Margins
| Year | Revenue (₹ Cr) | Net Profit (₹ Cr) | OPM | ROCE |
|---|---|---|---|---|
| FY20 | 3,936 | 40 | 2% | 11% |
| FY21 | 5,926 | 137 | 4% | 30% |
| FY22 | 9,313 | 183 | 3% | 26% |
| FY23 | 9,454 | 123 | 3% | 16% |
| FY24 | 11,095 | 144 | 3% | 14% |
| FY25 | 13,773 | 210 | 2% | 14% |
- FY21 was a lockdown fluke — post-COVID digitization boom.
- Margins are shrinking despite rising topline. Classic volume game.
- ROCE is stabilizing, but not exciting.
💸 Balance Sheet: Improved Post-IPO, Still Leveraged
- Debt: ₹910 Cr (FY25), down from ₹1082 Cr in FY23.
- Cash Flows from Operations (FY25): -₹299 Cr
- Working Capital Cycle: 60 days
- Dividend Payout: 6% of PAT (tokenism or tight cash?)
High inventory days (56), receivables (48 days), and negative CFO are red flags in a low-margin biz.
🤯 Recent Triggers
- Q4FY25 revenue at ₹2,973 Cr, PAT at ₹53 Cr
- 51% stake divested in ZNet (non-core cloud business) to focus on hardware.
- Investor buzz from AI and embedded systems distribution segment.
- Branch network expansion to 52 cities = broader reach = deeper float.
🔢 Valuation: Cheap for a Reason?
- EPS (FY25): ₹31.57
- P/E (TTM): 9.6x
- Book Value: ₹264
- ROE: 12.5%, ROCE: 14%
Fair Value Range = ₹280 – ₹350
- Base Case: 11x EPS = ₹347
- Conservative: 9x EPS = ₹284
In a frothy midcap market, this one looks… boringly stable. Which might be bullish.
📊 Verdict: Pickaxe in a Gold Rush
- Rashi doesn’t sell hype. It sells routers and printers. To every corner of India.
- Great volume play, but tight margins = always skating on thin ice.
- If they crack 3-4% OPM consistently, re-rating is possible.
Until then? It’s the guy who sells shovels during the AI gold rush.
✍️ Written by Prashant | 🗓️ June 18, 2025
Tags: Rashi Peripherals, ICT Distribution, AI India, IPO Stocks, Tech Hardware, Value Picks, EduInvesting
