Financial Performance Highlights

Standalone Q2 FY27 Performance:

  • Revenue from operations: INR5,708 crores, up 42% YoY
  • EBITDA: INR196 crores, up 96% YoY
  • EBITDA margin: 3.44%, expanded 95 bps YoY
  • PAT: INR153 crores, up 172% YoY
  • PAT margin: 2.68%, expanded 128 bps YoY

Standalone H1 FY27 Performance:

  • Revenue from operations: INR10,540 crores, up 49% YoY
  • EBITDA: INR345 crores, up 71% YoY
  • EBITDA margin: 3.28%, expanded 42 bps YoY
  • PAT: INR250 crores, up 117% YoY
  • PAT margin: 2.37%, expanded 74 bps YoY

Consolidated Q2 FY27 Performance:

  • Revenue from operations: INR6,185 crores, up 49% YoY
  • EBITDA: INR220 crores, up 112% YoY
  • EBITDA margin: 3.56%, expanded 106 bps YoY
  • PAT: INR131 crores, up 121% YoY
  • PAT margin: 2.1%, expanded 69 bps YoY

Consolidated H1 FY27 Performance:

  • Revenue from operations: INR11,287 crores, up 55% YoY
  • EBITDA: INR375 crores, up 81% YoY
  • EBITDA margin: 3.33%, expanded 49 bps YoY
  • PAT: INR235 crores, up 95% YoY
  • PAT margin: 2.08%, expanded 43% YoY

Operational and Strategic Updates

Market Context:

  • India's PC market grew ~12% in April-June quarter per IDC, led by commercial, education and small business demand
  • Premium and AI-capable notebooks driving growth
  • Commercial and enterprise demand expected to be steadier in second half
  • Consumer affordability affected by higher prices

Strategic Initiatives:

  • Acquired 67% stake in VDA Infosolutions (enterprise IT, cloud infrastructure, cybersecurity, system integration, managed IT services)
  • Formalized joint venture with Japan's Restar Corporation (semiconductor and embedded solutions business)
  • Conducted AI bootcamps across 6 metro cities with ~150 customers per location
  • Expanded to 57 branches, 50 service centers, and 728 locations across India
  • Working with 89 global brands
  • 10,280 channel partner ecosystem

Working Capital and Capital Structure:

  • Working capital days improved to 55 days from 61 days YoY
  • Debtors days reduced to 43 from 46
  • Creditors days increased to 48 from 44
  • Net debt to equity rose to 0.76x (deliberate choice for inventory buildup and VDA acquisition funding)
  • Operating cash flow negative for H1 due to inventory buildup
  • Annualized ROCE and ROE both ~23% for the quarter (highest since listing)

Growth Drivers Breakdown (Management Commentary):

  • 50% growth dissected as: 30% from price increase, 10-11% from volume increase, 10% from new businesses
  • VDA contributed <2% to Q2 revenue, ~6 bps to EBITDA
  • Semiconductor business done 2x of last year's numbers in first 6 months, expecting 3-4x for full year

Forward-looking Commentary

Inventory Management:

  • Priority to convert inventory to cash in second half
  • Inventory buildup due to Deepavali season shift (2025: October 20, 2026: November 8)
  • Sales described as "very good" in October

Growth Outlook:

  • H2 price increase expected to contribute 10-15% growth (vs 30% in H1)
  • Consumer business expected to degrow unit-wise, commercial business flat or positive
  • Targeting 20% business from enterprise segment next year
  • Semiconductor JV expected to contribute >10% to top line with 2x margins

Capital Raise Plans:

  • QIP provision for ~INR900 crores (15% dilution at current market cap)
  • Described as "advanced preparation for growth engine"
  • May not execute if growth capital not needed
  • Each capital raise with 1:1 debt-equity could support INR12,000-15,000 crores additional revenue

Margin Guidance:

  • Sustainable EBITDA margin of ~2.75% for long-term horizons (FY29-FY30)

Q&A Key Points

Market Position:

  • First mover in AI data center space, present in almost every project
  • Chose not to aggressively pursue large projects due to existing 50% growth rate
  • INR20,000+ crores of orders placed in last quarter alone in AI data center space

Restar JV Details:

  • Semiconductor distribution market opportunity in India estimated at INR25,000 crores
  • JV brings: new Japanese brands, design capabilities (200 engineers in Tokyo), access to Japanese manufacturers in India
  • Currently serving 10% of market opportunity, 90% unserved

Financial Metrics:

  • Depreciation run rate: INR12 crores per quarter post-VDA consolidation (includes intangible amortization)
  • Employee cost: INR70-71 crores run rate including VDA
  • ESOP amortization: INR3.8 crores this quarter