Rashi Peripherals - Another record quarter | Q1FY27 Company Update

Rashi’s Q1FY27 earnings were ahead of our estimates, driven by strong ASP growth in PCs along with continued traction in Peripherals.  PES (66% of revenue) benefited from price hikes taken by brands in Q4. PC prices are up 20-50% across segments over the last 6 months. EBITDA margins were in-line with our estimates of 3%, with the company continuing to operate at the upper end of its guided margin band of 2.5-3%. The company completed the acquisition of VDA Infosolutions in Q1, which gives them an entry into cloud, cybersecurity and services. They also completed a JV with Restar (Japanese semiconductor distributor) which materially expands it TAM across semiconductors in India. We have upward revised our earnings estimates by 37.5%/29.5% for FY27E/28E to account of the incremental ASP benefit and acquisition of VDA. We value the company on an SOTP basis and arrive at a target price of Rs 1,015 (Rs 630 earlier).

Rashi Peripherals Ltd. Stock Price Chart

Strong revenue growth across segments:

The company reported revenue growth of 13.6%/61.9% QoQ/YoY, driven by elevated ASPs in the PC segment and continued strength in enterprise demand. PES and LIT segments delivered high single-digit volume growth despite higher product prices, reflecting resilient underlying demand. The management remains cautious on large enterprise deals, indicating that the current demand environment is sufficient to support growth. Higher ASPs could weigh on consumer demand in H2FY27E. The semiconductor distribution business is expected to witness a meaningful ramp-up from H2FY27E following the Restar JV, while the acquisition of VDA Infosolutions is expected to start contributing to consolidated financials from Q2FY27.

EBITDA margins to remain at the upper end of 2.5-3%:

EBITDA margins for Q1FY27 came in line with our estimate at 3.0%. We expect margins to remain at the upper end of the guided 2.5–3.0% range over FY27E–FY28E, supported by operational efficiencies and an improving business mix. Gross margins declined sequentially due to a higher contribution from the lower-margin PES segment. Working capital days improved materially to 56 days in Q1FY27 from 73 days in Q1FY26, primarily driven by lower inventory days, reflecting continued focus on working capital optimization.

Outlook:

While elevated ASPs are expected to support revenue growth over the next few quarters, we expect pricing to gradually normalize by Q4FY27E. The acquisition of VDA significantly expands Rashi's presence in cloud, cybersecurity and IT services, diversifying its revenue mix towards faster-growing and higher-margin segments. Additionally, the partnership with Restar marks Rashi's entry into the semiconductor ecosystem, providing access to design capabilities, technical expertise and global OEM relationships beyond traditional component distribution. We believe these strategic initiatives will strengthen the company's margin profile, improve return ratios and deepen its technology portfolio over the medium term.

Valuation, View and Risk:

We have upward revised our FY27E/FY28E earnings estimates by 37.5%/29.5% to incorporate the impact of sustained higher ASPs and the acquisition of VDA Infosolutions. We value the company using a Sum-of-the-Parts (SOTP) methodology, reflecting the distinct growth and profitability profiles of its core distribution, VDA and semiconductor businesses, and arrive at a revised target price of Rs 1,015 (vs. Rs 630 earlier), based on Q1FY29E EPS estimates. We expect Rashi to deliver Revenue/EBITDA/PAT CAGR of 18.0%/21.3%/25.7% over FY26–FY29E, supported by resilient growth in the core business and increasing contribution from higher-margin businesses. Key risks include a delay in the PC replacement cycle, a sharp correction in DRAM/SSD prices, slower-than-expected integration of VDA, slower ramp-up of the semiconductor business and higher-than-expected working capital intensity.

Company website: https://rptechindia.com/

*CMP is as per report published date

Click to download the full Rashi Peripherals Ltd Q1FY27 Company Update

Analyst:

• Vinay Menon - Senior Research Analyst, Institutional Equities (NISM-201600112117)
• Miloni Mehta - Research Associate, Institutional Equities (NISM-201800127664)

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FAQs on Rashi Peripherals Ltd Q1FY27 Company Update

Below are key investor FAQs highlighting the growth drivers, financial outlook and risks based on our institutional equity research view.

How did Rashi Peripherals perform in Q1FY27?

Revenue increased 61.9% YoY and 13.6% QoQ, supported by elevated PC ASPs and continued demand across enterprise and peripherals. EBITDA margin was 3%, at the upper end of management’s guided range.

What is the target price for Rashi Peripherals?

The research report assigns an Accumulate rating with a target price of ₹1,015. This is an analyst estimate and does not guarantee future returns.

What is driving Rashi Peripherals’ revenue growth?

Higher PC prices, resilient enterprise demand and continued traction in peripherals are supporting growth. PC prices have increased materially across segments, benefiting reported ASPs.

What is the VDA Infosolutions acquisition expected to add?

VDA Infosolutions expands Rashi Peripherals’ presence in cloud, cybersecurity and IT services. The acquisition is expected to contribute to consolidated financial performance from Q2FY27.

How does the Restar JV benefit Rashi Peripherals?

The partnership expands Rashi’s addressable market into semiconductor distribution in India and provides access to technical capabilities, design expertise and global OEM relationships. A meaningful business ramp-up is expected from H2FY27.

What are the key risks for Rashi Peripherals?

Key risks include a delayed PC replacement cycle, falling DRAM or SSD prices, normalization of PC ASPs, slower VDA integration, delayed semiconductor ramp-up and elevated working-capital requirements.

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