Rashi Peripherals Limited (RPTECH.NS) Q2 FY2026 Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Q2 and H1 FY '26 Conference Call of Rashi Peripherals Limited. [Operator Instructions] Please note that this conference is being recorded. Before we begin, please note that this conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not the guarantee of future performance and involve risks and uncertainties that are difficult to predict. On the call today, we have Mr. Kapal Pansari, Managing Director; Mr. Rajesh Goenka, Chief Executive Officer; and Mr. Himanshu Shah, Chief Financial Officer. The management will take us through the operational and financial performance for the quarter gone by, following which we will open the forum for Q&A. I now hand the conference over to Kapal Pansari. Thank you, and over to you, sir.

Good morning, everyone. We welcome you to the second quarter earnings call. Hope you have had the chance to go through our results, press release and investor presentation, which are available on the exchange and our website. As we navigate the digital frontier, the global PC market is roaring back to life with Q3 2025 shipments surging 8% to 10% year-over-year, propelled by inexorable Windows 10 sunset and easing tariff headwinds. In India, this renaissance is even more electric. Quarter 2 shipments climbed 6% to 3.6 million units with notebooks fueled by enterprise AI adoption and Windows 11 refreshes, leading an 8% charge. Government initiatives such as Digital India and Make in India are accelerating domestic hardware manufacturing and digital adoption across education, governance, health care and enterprise sectors. The Indian IT hardware market continues to grow at 10% to 12% annually, driven by rising laptop penetration, smart city projects and expanding data center infrastructure. For our ICT distribution networks, this signals an era of premium hardware demand and genuine solutions. We are poised to capture this momentum, delivering scalable solutions that empower India's creators and gamers. The future isn't just computing, it's computing smarter. As a leading value-added distribution PC components and embedded devices, Rashi Peripherals is playing a pivotal role in this transformation, bridging global innovation with India's rapidly evolving digital ecosystem. By empowering OEMs, channel partners and enterprises with integrated, energy-efficient and AI-ready solutions, we remain committed to strengthening the backbone of India's connected future. In order to strengthen our nationwide coverage and serve customers' demand seamlessly, we have expanded our distribution network with commencement of 2 new branches in Maharashtra. We are also delighted to announce our ESOP program for our employees fostering a culture of ownership and rewarding our talented team for driving our shared success. This initiative strengthens our bond and propels future growth. Before inviting Mr. Rajesh Goenka to speak, I am pleased to share that Rashi Peripherals has been recognized by 2 prestigious awards, NCN's Best National Level Value- Added Distributor of 2025 and Digital Terminal's Most Trusted National Distributor of ICT Solutions in India. With that, I now hand over to our CEO, Mr. Rajesh Goenka, to share further updates about the company.

Thank you, Kapal Pansari. I extend a warm welcome to all stakeholders on today's call as we discuss our business and operational highlights for the quarter and the half year. Let me begin by sharing some of the key highlights of Q2 FY '26. We continue to strengthen our position in the market with new brand alliances, welcoming Dell Commercial Technologies business and Indian start-up named Teachmint Technologies to our portfolio. Our PC business maintained strong momentum, growing at 2x the market rate, reflecting our consistent execution and customer focus and expansion. We also had a very active industry presence participating in the prestigious electronica embedded exhibition in Bangalore, which provided a great platform to showcase our embedded products and solutions and engage with potential OEMs and customers. Another proud achievement was the successful completion of India's longest running channel roadshow covering 50 cities, engaging 4,000-plus small partners, featuring 300-plus product demonstrations from leading brands. We further expanded our server and storage portfolio, reinforcing our commitment to offering comprehensive ICT solutions to our partners across the length and breadth of the country. Our evolution is marked by an aggressive expansion beyond conventional hardware into the future-ready categories like AI-enabled services, embedded and semiconductor solutions and comprehensive enterprise and cloud solutions. We are leveraging our robust tech-driven infrastructure primarily driven on SAP HANA and SAP CRM systems to optimize our supply chain, ensuring we move with the market velocity. We have consciously invested in strengthening our presence, particularly in Tier 3 and Tier 4 cities. Our diversified portfolio split across PES and LIT segments make us resilient and position us to capitalize on India's digital transformation journey. Furthermore, our increasing penetration into AI solutions is delivering meaningful results, reinforcing our leadership in this transformative domain. Lastly, we are accelerating the growth of our embedded/semiconductor vertical. We remain focused on leveraging our extensive distribution network, which now caters to more than 10,000-plus customers in 700-plus towns and cities of India to ensure sustained value creation for our stakeholders. To provide further details on our financials for this quarter, I hand over the call to our CFO, Mr. Himanshu Shah.

Thank you, Rajesh, and a very warm welcome and good morning to all of you, all the investors present on the call. I'm delighted to take you through the consolidated financial highlights, especially the cash flow positive financial highlights for quarter 2 and H1 FY '26. During quarter 2 FY '26, revenue stood at INR 41,554 million, up by 12.1% Y-o-Y and other than project deal, it was up by 20% Y-o-Y. EBITDA came in at INR 1,081 million, an increase of 3.5% Y-o-Y with an EBITDA margin of 2.6%. PAT for the quarter was INR 592.2 million, translating into a PAT margin of 1.4%. Adjusted PAT, excluding the extraordinary items, stood at INR 664 million, with an increase of 7.4% Y-o-Y. Talking about H1 FY '26 for the first half of FY '26, revenue was at INR 73,076.5 million, 8.3% decline on Y-o-Y. However, with the large project deals which we executed last year, excluding those, we are 16% up on our run rate business. EBITDA grew by 12.6% Y-o-Y to INR 2,195.5 million with an EBITDA margin of 3%. PAT stood at INR 1,209.2 million, down 3.2% Y-o-Y with a PAT margin of 1.7%. However, adjusted PAT, excluding extraordinary items was at INR 1,281 million with an increase of 9.7% Y-o-Y. ROE is at 13.33%, ROCE is at 15.06% for the -- on an annualized basis for the H1 FY '26. Working capital days were at 61 days for H1 FY '26. Trade receivables, trade payables and inventory stood at 46, 44 and 59 days, respectively. During the corresponding period last year, our EBITDA and PAT were inclusive of certain one-off items. Excluding these items, the normalized growth in the current period reflects a strong improvement in underlying business performance, supported by steady demand and operating efficiency. This provides a more accurate view of our year-on-year profitability trajectory. And of course, we have been able to manage our working capital components well, resulting in a positive cash flow. Looking at the business mix on a trailing 12-months basis, our PES segment contributed 57% of the revenue, while LIT accounted for 43%. Region-wise, 61% of the revenue came from metro cities and rest from non-metro geographies. The ESOP rollout during the quarter has led to a modest noncash expense, slightly diluting EPS in the quarter by under 1%. This balanced approach prioritizes talent retention while maintaining our robust financial trajectory. With this update, now I would like to open the forum for question and answers. Thank you.

[Operator Instructions] The first question is from the line of Nigel Mascarenhas from Leo Capital.

A couple of questions from my end. Firstly, can you please elaborate on the extent of the ESOP cost booked in this quarter versus last year and versus the previous quarter? And what's the likely future run rate?

So the ESOP expense last year was nil because this has been rolled out. The grant has been given in this quarter. And the accounting treatment of the provisioning of ESOP cost has been done as per Ind AS, wherein this quarter has involved a provisioning of INR 72.17 million.

Got it. And what's the likely future run rate as well?

So for up to 3 years, like for next 4 quarters, it will be almost in the same range.

Okay. About INR 72 million for the next 4 quarters. Got it. And lastly, what is your growth outlook and margins for the company going ahead?

Yes. So as far as the growth is concerned, if you see exclude the last year, the big project deal, otherwise, we are growing at a healthy rate of 16%. And particularly when you compare Q2 to Q2, then our growth is around 20%. So while we cannot exactly predict, but we've been always maintaining since last few years that our CAGR has been 20% for last 20 years, and our aspiration is always to meet or be near there.

Got it. And margin-wise?

So margin-wise, as I mentioned in my highlights also, that H1 results gives a picture of our margin trajectory, which we have been able to deliver in the long run also.

The next question is from the line of Madhur Rathi from Counter Cyclical Investments.

Sir, I wanted to understand regarding our revenue growth, sir, if I consider -- sir, one of our competitors, sir, Redington, sir, they consider the large deal as a part of their business. But sir, when we consider the large deal on a consolidated basis, our revenue has grown by like 12%, 13% for this quarter versus sir, our larger peer has grown 16%. Sir, what is the reason why we are not taking any large deals? Is it based on margin? And sir, yes, if you could just help us understand on that?

So last year, large deal that we got in quarter 1 and part of it in quarter 2, if you recollect, it was close to almost INR 1,800 crores. So that we always take it separately because these large deals, there are multiple macro factors of getting those businesses or no. So therefore, for sake of discussion, we always keep it aside and then discuss so. However, going -- and second is what we also want to do, these large deals execution should be complete. Our payment cycle, all our obligations also should be complete before we get into another large project. So I'm happy to share with you that all these orders have been very successfully executed and all our obligations are completed. So now onwards, obviously, we are open for large projects once again. And we have won some very strong funnel for Q3 and Q4. And hopefully, we will win some large projects once again.

Got it. Sir, on a net margin front, sir, we have been constantly delivering more than our guided of 1.3% to 1.5%. So can we expect our net margins to be upwards of 1.5%, whether or not we get large deals and our revenue to grow at double-digit, excluding the large deals as well?

So on the margin front, as you rightly mentioned, we have been constantly delivering more. And we -- the company continuously strive for optimizing its operational efficiencies. And with the dynamics of the customer mix, product mix and the margins flowing from GP to working capital discipline, it's a mix of all those factors. So that is why 1.5% is a safer PAT margin, which can be considered for the long run.

Got it. And sir, just a final question, sir, if you could just help us understand on the software division, how is that scaling up? And what kind of margin profile are we currently operating at? And where do we see it scaling over the next 2 to 3 years?

Yes. So at this moment, it is very small, like a small start-up. We are still at the design board. So it's too premature to speak in detail about it.

[Operator Instructions] The next question is from the line of Kunal Mehta from Sunidhi Securities.

Sir, you just mentioned that you are also now ready to take up large projects. And I think the last large project that we took from Yotta was at a lower margin. So going ahead, will we be compromising on margins for larger projects? Or we will be taking a stand and maintaining our gross margin of 5% and EBITDA margin of about 2.5% to 3% on the large projects.

Yes, the answer is very simple. We've obviously had good learnings of the past deal, and we had some challenges as well. So with those learnings, we will have to tread a little bit carefully. So I would say that we would take probably a middle path. And focus is going to be primarily on ROCE.

Okay. And sir, taking larger projects, does it maybe deviate the usual business that we have? Because last year, I think because of the larger project, has it been that a lot of bandwidth has been gone towards that? Or it doesn't affect the usual business?

Not really. It's the exposure, it is the ROCE. From a bandwidth perspective, I think we have enough bandwidth to manage the run rate BAU business and the project business, both simultaneously.

Okay. And sir, I think this quarter, the e-commerce channel percentage is about 17%. Is it higher than usual? Is it -- this is something that we are -- a channel that we are focusing to grow more on?

Yes. So as I have been always explaining that there is always a fight between the September quarter and March quarter. September quarter is a consumer quarter, September quarter is an e-commerce quarter. And March is a commercial quarter, it is an enterprise quarter. So therefore, this quarter, e-commerce is high. But as we progress in Q3 and Q4, our GT business, regular business will come up again. Diwali time, all the big festivals, BBD, all these festivals are there. So therefore -- and it's every year scenario depending on when the Diwali is there and when these festivals are there. So it's a repetitive in nature on account of festivals.

It is in line with the seasonality applicable to the business.

Okay. And sir, what is the average lease term on our warehouses and branches? Is it 5 years? Is it -- how...

So these are long-term leases only -- most of them are long-term leases from 3 to 5 years, of course. And when we do capacity expansion, definitely, we then look for renewing for some other properties.

Because I think we just renewed the lease in this quarter or this half year?

Yes. So these are long-term leases.

Okay. So can we assume it's like a 5-year lease?

Yes.

The next question is from the line of Vinay from Monarch Capital.

Congratulations on a good set of results. Two questions from my side, sir. One on ESOP cost. You mentioned INR 72 million you booked for this quarter. And this is a 3-year program, any target with mind in terms of how these ESOPs will be given? And like what could be the yearly run rate on this?

The yearly run rate will be around INR 200 million for 2 years and very small piece getting spilled to third year, almost less than 1/3 of it.

Okay. Any revenue target or any target for which -- on which this will be given? Or is it just on the tenure getting over? How is it placed?

So it is more of tenure for the employees who have spent more than 5 years in the organization, and that is clearly spelt out in our ESOP policy, which is also available in the public forums.

Okay. Okay. Great. That helps. And on -- there was a sharp jump in inventory days this quarter. Any reason for that?

Inventory days are in the range of like 59 days only, which is not a jump. It is normal days applicable to the industry in this seasonality applicable to the business.

Okay. And our cash flow turned positive is a great thing for us. And is this sustainable, sir? And anything which we have done for this to kind of turn around so quickly for us?

So we feel that if you manage your working capital components well and be sensitized about the movements in that and keep a close track of it, I think we will be able to maintain it. To what extent is the range depends upon -- as certain external factors are also affecting the working capital components, it all depends on that.

Okay. And one last thing is this new partnership with Dell, what kind of revenue potential can we expect from it? And when can we start seeing revenue from that?

Yes. Thank you for asking this question. So Dell commercial business is already kick started. And in July, August, September quarter also, we booked a very small token revenue. This Q3, we are expecting substantial revenue in this and going forward also. Just to give you a ballpark figure, Dell commercial business, they do to the best of my estimate, about $3 billion in India. So theoretically, that plus growth is the opportunity for Rashi Peripherals.

The next question is from the line of Aejas Lakhani from Unifi AMC.

Yes. So sir, a couple of questions. One, the first one is that the competitive intensity is materially increasing, both from listed as well as unlisted peers. So your thoughts on how it's shaping up?

Yes. So with the globalization, more information, the competition definitely with the peers are definitely increasing. But then because of our inherent strength of widest product portfolio and the physical presence in 52 cities of India, which we have further expanded to Nanded and Baramati. So now we have 54 locations. So plus our prudent working right from the management level, all 3 is helping us to maintain our consistent growth to H1 to H1, it was -- excluding the big deal, it was 16% and Q2 to Q2, it is 20%.

Noted, sir. But sir, can you -- I mean, if you look at companies like Synnex or even Savex, et cetera, the competitive intensity with which they are participating is on the higher side. Are you seeing that not in your pockets of investments or in your pockets of products? Or is it happening more on the enterprise side? If you could textualize that answer a little bit?

I think it is happening everywhere. But again, as I said, because of our larger basket of products, larger locations, we are able to mitigate and maintain our growth trajectory.

Understood. Okay. Sir, the second question is that can you just quantify how large is our enterprise segment now become? And how is that scale up taking place?

So our enterprise business was about INR 1,000 crores last year. And of course, we are having the highest growth in that segment. But again, I just qualify excluding that one big deal.

Understood. And what's the run rate of that business, sir, now that you're seeing?

In the excess of 30% to 50% growth on a Y-o-Y basis.

Understood. And sir, what kind of deals are you participating in, in the enterprise business? Are these more larger deals that erstwhile because of our net worth, we are not able to participate in? Could you just call out some more color on the same?

So, our focus regular as a DNA- wise, our focus is more on SMB kind of deals, especially companies which have employee of 100 to 1,000 to 1,500 employees. However, selectively, we go for larger project deals also. Like last year, we executed 3 similar projects. This year, so far, we have not executed any, but we have a very strong pipeline in Q3 and Q4, and I'm sure we will win and execute some large projects in these 2 quarters.

Understood. And sir, since we've been a first mover in the data centers business, can you just call out how is that segment? Are there any tailwinds that you're seeing that you can incrementally participate in?

Yes. So data center, I think a lot of work is going on. But there are some capital constraints in this industry, which is now getting eased. So we will see next 2 quarters and subsequent years, a lot of data centers coming up. And Rashi, and thank you for highlighting that being the pioneer in this because of that large deal, we are very strongly well placed with our experience plus our distribution rights or brand alignment that we have with the global vendors.

Understood. So sir, is it fair to say that while the tailwinds of data center deals are incrementally there, you are -- because of capital constraints, the conversation just said a second ago, you are being far more selective and careful in your evaluation of what you're interested to participate in. Is that understanding correct?

Yes, absolutely. And our CFO is also a little bit adamant on ROCEs.

Understood. Okay. Sir, the next question is that you've had a certain set of product cohorts like the embedded and the large display formats, et cetera, which you've alluded to in the past have a slightly better gross margin mix. So could you just speak about what is the portfolio as a percentage of sales, which has a slightly better gross margin mix? How is that growing versus the company growth rates? And can that help hold or improve the gross margin over this and the next year?

Yes. So our embedded/semiconductor business is doing extremely good. And as I mentioned earlier, we participated in the largest exhibition of India, which was electronica. We were the leading exhibitors there. We could display a lot of our solutions, and we can see good business also emerging from it. So run rate, I think the growth is good. However, at this moment, in the overall revenue, the percentage is still small, and it will take 2 to 3 years to really make a very significant difference in the overall scheme of things.

Understood. And sir, could you just share what exactly and how are you participating in the software market?

As I said, this is at the drawing board only at this moment. So it's too early to mention anything about it.

Understood. But it will be more, again, distribution of the software products, right? Is that a fair understanding?

Right now, we are on the drawing board, I guess so, I cannot...

The next question is from the line of Bhavin Chheda from Enam Holdings.

Yes. Congratulations to the management team for the strong growth and the outlook. Just 2, 3 questions. So one on the Dell commercial business. You said you booked some revenues in quarter 2 and expect a strong momentum with Dell commercial business having $3 billion India TAM. So can you just guide us how many suppliers would be there who would be doing this Dell commercial business? And what kind of market share we would be targeting over the next few years in this? And prior to quarter 2, we didn't had any kind of Dell commercial business. It's the first time that we are booking revenues in this segment.

Yes. So first -- I'll be answering in the reverse. So yes, Dell commercial business, we started with 0 previous quarter, and we've booked some very small revenue. However, going from this quarter, we have built a separate team and our planning -- and our funnel is also very strong. So we expect a substantial execution, not only just order booking within this Q3 and of course, accelerated growth in Q4.

Sure. And depending on how -- there would be how many distributors who would be doing the model?

4.

There are 4 distributors in India who are distributing

Yes.

Sorry.

4

Okay. Okay. Second, on -- we see a debt reduction. I think congrats to Himanshu and the team to reduce the debt and bring working capital back under control. So if I see, I think previous quarter, we had some INR 280 crores Yotta receivable for the last year -- one big large deal. So the entire amount has been received or there's still some receivable spending on that side?

So happy to inform you that the entire amount has been received against that. Yes, it got delayed, but it has been -- as we like at the quarter itself, we were -- we had collected all.

So this quarter, closing balance sheet now reflects a normal working capital related to our business.

So these collections of large debtors has helped maintaining our working capital cycle also and the cash flow result and the positive cash flow.

And a couple, as we are obviously seeing a strong growth across most of the distribution companies, partly because of Windows 10 transition. So what kind of trends you saw in the festive season and how long this process will continue? And will it be a one-off effect and the growth will taper down after the transition has happened on the corporate side and all that? What is your outlook on Windows 10 transition, which is happening?

Yes. So first of all, what I -- in my initial speech while opening, I mentioned that overall globally as well as in India, there has been a robust uptake in the PC shipments fueled by AI-based laptops and the Windows refresh. With more and more AI work process flows, applications that are coming in, these laptops are becoming far more smarter and productive. So the trend -- one of the trends that we saw during this festive period was the premiumization of laptops. Instead of the entry level, there was a significant demand and interest from the customers for mid- and higher-end segments. Gaming segments continue to be strong and growing, followed by the Windows refresh cycle. I think these were the key trends of PC drive that has happened in the country. Whether these are one-off or whether these will continue, I think this is just a start of the transformation for PC industry. More and more adoption will continue to happen because when the transformation happens or the technology upgrade happens, it's not possible for any organization, SMB or enterprise to refresh their entire infrastructure to these new devices. They have to use the PCs that was bought last year and the year before for another 1 or 2 years. When the refresh happens, it will happen to these more efficient and premium products going forward. The third and information I would like to also highlight, while it is a public information about key components like memory, storage, computing chipsets, et cetera, are -- have started to face certain shortages in the market due to this high demand in the AI space, because of the AI space. The data is increasing, the computing capacity need is increasing for devices. This is not going to be short term. It is going to last for a couple of quarters at least with the way we look at the trends in the market. Therefore, even the expectations on some increase in pricing will also happen.

And a couple is also the rupee depreciation, partly helping out in overall increase in prices since a lot of our components or the equipments are imported and then sold in India. So probably the rupee depreciation has helped in slightly higher turnover?

Yes. So rupee depreciation in the long term, it cannot be directly attributed to the growth. But if you look at the -- theoretically, the economics, obviously, when rupee was INR 85 to INR 88, INR 89, the prices will eventually catch up and there will be some appreciation. But there is no direct correlation in the amount of growth attributed due to rupee depreciation.

Okay. And last one, can we figure out what was the volume growth, if at all, if you are mentioning in the number terms on a unit basis in quarter 2 on a Y-o-Y basis on units -- on volume basis?

Yes. So a very good point actually. So our first internal benchmark is unit growth, then we look at the average selling price growth and then we eventually come with the revenue growth and then the profitability. That's the sequence. So I'm happy to share with you that the market in terms of unit-wise has grown by about 8%. Our unit growth has been about 16%, 16.5% and Q2 to Q2 and our revenue growth has been about 20%. So that's the math overall.

The next question is from the line of Kunal Mehta from Sunidhi Securities.

Just 2 follow-up questions. One is on the debtors factoring. I think now that CFO score has got our rating up to AA-, so this is very commendable. When can we see that we start the debtors factoring, which can help us improve our working capital days?

Yes, you are right with the credit rating up, the products available are more, and we are very cautious about the nitty-gritties of the factoring, and we definitely started testing those things and reaching at a number which is most optimum to our kind of financials. Definitely, you'll see over a period of time.

Okay. And sir, on the forward-looking revenue guidance, can we see that apart from large projects, can we see that our core business can grow around 15% Y-o-Y comfortably?

Yes. Yes.

Next question is from the line of [ Vikrant Sahoo from RK Advisory ].

Just have a question like you have provided details about the inventory write-off and doubtful debt. Can you explain me how good these are important and where we stand in the industry?

So as far as inventory write-off is concerned, it is actually not write-off, but provision for aging inventory, which we do as a prudent accounting practice. However, company has not faced any write-off in the -- any sizable write-off in the past or a material write-off in the past, you may say. As far as provision for doubtful debts is concerned, yes, ours -- what I can mention is ours is lowest in the industry and in the range of 0.01% to 0.02% and long run also, like a 10, 15 years horizon, I'm talking about. And we continue to keep those things because credit risk is the major risk, which we have a mitigation product in our equity in the form of credit insurance, where we enjoy best of the terms from insurance companies also because of our performance on the doubtful debts.

Okay. One more question I had about the new branches in Baramati and Nanded aligned with your overall expansion strategy in Tier 2 and Tier 3 markets. How do we align that, the new branches?

So in our quest to reach to newer customers and newer towns and cities, we explore the viability of opening a branch operation. So we identified 5 locations where there is a substantial business opportunity. And to start with, we have started in Nanded and Baramati. And just to update all our investors, all our branch are profit centers. So we actively review the P&L of each branch individually. And as you know, Maharashtra as a state and particularly places like Baramati and Nanded, as a town, they are expanding rapidly and IT consumption in the home segment and the business segment, both is pretty high. And that's the reason we have set up these 2 new locations in Maharashtra.

Okay. And one more question I have. Are there any plans to transform digital sales platform or adopt AI-driven inventory management systems in future?

So Rashi Peripherals was one of the first companies to implement SAP almost 20 years back. And then we have upgraded our system to SAP HANA. So our entire ecosystem runs on SAP HANA. All our sales team, 400-plus salespeople, they are on SAP CRM. So they are all hands-on. Along with this, we have Power BI. So I think we have the entire ecosystem, which is digitized, and we continuously keep on upgrading our technologies because we realize that, one, multi-location, second, number of products, more than 4,000 products in our portfolio. It's a complex web. So all the possible tools we use and we are improvising regularly by a core team of IT specialists.

[Operator Instructions] The next question is from the line of Madhur Rathi from Counter Cyclical Investments.

Sir, I read somewhere that there are around 3 crore PC in India that are still on Windows 10. Sir, conservatively, how much can we expect to be converted to Windows 11 over the next 2 to 3 years? And sir, what is the average selling price for this AI-led PCs versus our current realization per PC, if you can help us understand?

Yes. So see, Windows refresh is going to be a continuous process. And in India, we typically try to refresh when we get stuck. So it's not going to be overnight. But what keeps me more excited is the overall digitization, the demand of notebooks, desktops and all related accessories. And obviously, the overall economy of India is also doing well. So all these 3 factors together is increasing the demand. And to further help to increase the revenue, the premiumization of the IT products and solutions, as Kapal mentioned, is helping us to drive a little bit higher revenues. To answer your question, a normal PC today in India costs about -- a notebook cost about INR 40,000, whereas AI PC on an average it costs about INR 75,000 to INR 80,000 onwards. But then people who can afford and who have the budgets, they buy these AI PCs only, core ultra PCs only because today, the AI consumption or usage may be only 20%. But in next 1 year, the way -- the speed with which it is the implementation and apps are being developed, the utilization in next 1 year is going to be very high. And typically, when someone buys a laptop, in the commercial space, they use for at least 3 years. In personal space, people use for more than 4 to 5 years. So it's a wiser thing to buy AI compatible PCs than a regular PC.

Got it. Sir, is it fair to assume that out of -- so from what I read is like around 6 crore PCs are currently in India. So is it fair to assume that the 50% that has been converted to Windows 11 have been the corporate customers. And going forward, the 3 crore, whatever needs to be refreshed to Windows 11, that will be a much lower cycle than what has happened? Or how should we look at it?

Absolutely. Only thing is this 3 crores and 2 crores, I cannot quantify because that's very subjective. But yes, the refresh has primarily started from the corporate sector because obviously, the support is not there. So there are multiple issues of using those notebooks and desktops.

Got it. Sir, just a final question from my end. Sir, when we see the data center, most of this business is either enterprise-driven or project deals. And sir, when we being exclusive NVIDIA distributors, sir, how does this help sir, when NVIDIA is bidding for these contracts, our competitors are bidding for these contracts. And we are focusing only on deals that are margin accretive, sir. So how should we look at it when the opportunity is there, but because our OEM is also competing in that and our competitors are also competing, sir, how should we look at it from Rashi's perspective regarding how can we capture this opportunity and growth other than the NVIDIA, the gaming and your personal requirements?

Yes. So in the data segment right now, there is a lot of demand tendering going on, and we have a strong funnel, and we are playing strong on that field. As I said earlier, we will look at the ROCE with our past good and some bad learnings also, which we want to correct. So we are at a strong position, and I can tell you very confidently that you will see good results in Q3 and Q4, both.

Got it. Sir, just a final question, sir, the NVIDIA -- as we are one of the sole distributors for NVIDIA, sir, is it -- so if I consider INR 100 to be the revenue of NVIDIA in India, sir, how much would be enterprise or corporate driven? And how much would be the consumer or retail driven? And in retail, are we the only player present in this segment?

So first, I just want to clarify, we are not the sole or exclusive distribution partner for NVIDIA. We are the oldest distribution partner for NVIDIA, one. Second, NVIDIA products and solutions are sold under the NVIDIA brand through the distribution one. But the larger business is through the OEMs like ASUS, Dell, HP, Lenovo, Supermicro, all these companies. These companies buy GPUs from NVIDIA directly. They assemble, make the complete servers and solutions, and then they provide to distributors like us. So it's very difficult to really determine what will be the consumer versus commercial ratio of NVIDIA.

The next question is from the line of Amit Agicha from HG Hawa.

I hope I'm audible clearly.

Yes, Amit.

Yes. So the current debt equity ratio, which is shown here 0.49x, like what is the targeted comfort range? And what are the company's plans to reduce the debt or improve the cash conversion?

So as we -- like the cash positive scenario continues, it will definitely reduce the debt burden on the balance sheet. As far as target debt is concerned, if the business warrants any additional capital or the fund infusion, I would say, capital employed, definitely, we have borrowing capacity in our kitty to utilize the debt and grab the opportunity provided the ROCEs and ROEs justify those infusions.

Sir, what is the current like cost -- blended cost of interest?

Currently, it is in the range of 7.6% to 7.8%.

So very comfortable. And sir, last question, like what are the top risk factors which you assume now like for the coming 2 quarters or for the coming year?

I think no major risk factors per se because our economy is doing good. With the tariffs, our impact to India is minimal as such, if you really ask me. Dollar fluctuation, now we are getting used to dollar going up only. So that also is settled. The only point I could highlight is globally, there is a shortage of all the components, particularly CPU, memory, SSD, hard drive, all these components are in shortage, primarily because of very high demand of data centers and capacity enhancements have not done. So that could potentially impact the revenue, but the feedback that we have from our vendor suppliers is that they will be able to maintain it. But since you asked this question, it could be a potential risk, but unlikely.

Thank you very much. Ladies and gentlemen, that was the last question. I would now like to hand the conference over to management for closing comments.

Thank you, everyone, for this wonderful round of questions and updates about Rashi Peripherals. As a part of closing remark, I only want to mention that the future of Rashi Peripherals continues to be robust and foundation-led. We participated on the enterprise in a big way. We had some learnings, and now we are ready for Phase 2 of our participation in this journey. Our traditional and perennial run rate business continues to be extremely strong foundationally, growing at double-digit plus growth. We only look for -- request all the participants and our investor community to continue to look for our performances and information that will prove to be a testimonial for our growth and ability to participate in this market. Thank you so very much, and have a great day.

Thank you very much. On behalf of Rashi Peripherals Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.