India’s digital economy is entering a phase where demand is moving beyond software and connectivity. The rapid expansion of Artificial Intelligence, cloud computing and data centres is creating new opportunities across the technology value chain.
The Information and Communications Technology (ICT) industry sits at the intersection of these trends. India’s ICT market was valued at US$43 billion in FY24 and is expected to reach US$75 billion (around ₹7 lakh crore) by FY29. Rising digital adoption, AI, cloud computing, 5G and the rapid build-out of digital infrastructure are expected to support this growth.
However, the opportunity is not limited to companies building new digital infrastructure. Rising memory prices are making refurbished electronics relatively cheaper, as businesses look for cost-effective alternatives. At the same time, technology distributors are moving up the value chain by expanding into data centre business solutions.
The Dual Approach to Digital Growth
This positions them to benefit from rising infrastructure spending. Against this backdrop, two distributors offer different ways to play the expanding digital infrastructure opportunity in India. One taps the growing demand for refurbished electronics, while the other expands into data centre solutions as AI and cloud adoption accelerate.
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Here’s why these companies deserve a closer look.
#1 Rashi Peripherals
Rashi Peripherals is an Information and Communications Technology (ICT) distributor in India. The company sells technology products in partnerships with 80 global technology brands. With 57 branches and 50 service centres across 20 regions, the company reaches 706 locations.
Core Verticals & AI Tailwinds
Rashi Peripherals manages its business through two main verticals. Personal Computing and Enterprise Solutions (PES) is the largest business vertical, contributing 66.3% of revenue. PES delivers bundled enterprise technology solutions (PCs, servers, data centres, and storage) to enterprise, government, and institutional clients.
It’s currently benefiting from a major industry super-cycle driven by 3 tailwinds. The first is a multi-year PC refresh cycle triggered by the move away from Windows 10. The second is accelerating demand and adoption of higher-average-selling-price, AI-enabled PCs.
The third is the impact of rising component costs and higher prices, driven by structural constraints in memory capacity (such as conventional DRAM and NAND flash) and global AI data centre demand.
The Lifestyle and IT Essentials (LIT) segment contributes 33.7% of revenue. This segment focuses on standalone consumer technology products like accessories, gaming, wearables, and everyday items. Rashi is leveraging its wide reach to continue gaining market share. This is relatively a high-inventory-turnover model.
Expanding Margins: The VDA Acquisition & Data Centre Push
Rashi is transitioning from a pure-play distributor to a high-value integrated solutions partner. To do so, management has prioritised a high-margin, capital-efficient data centre business. It is leveraging its pre-sales, logistics, and installation expertise in smaller data centre component transactions in the ₹20 crore to ₹70 crore range.
Rashi focuses on neo-clouds, smaller cloud service providers, and niche operators who provide specialised AI-based solutions in their data centres. These tier-2 operators offer a continuous, regular run-rate buying cycle, which fits Rashi’s high-turnover business model. Rashi aims to leverage its relationship with NVIDIA and Supermicro to participate in these deployments.
In Q1FY27, Rashi acquired a majority stake in VDA Infosolutions, a systems integrator across India. VDA generated ₹850 crore in FY26 and helped Rashi move up the value chain and into a stable, regular service revenue stream. This includes enterprise implementation, consulting, managed IT services, cloud, and cybersecurity.
The company has partnered with WEKA to expand into AI infrastructure and high-performance workload management. Its alliance with Dell Technologies to distribute commercial servers, storage, monitors, and laptops is progressing well. Dell contributed approximately 5% to the business in Q1FY27, exceeding internal estimates.
The Restar Joint Venture: Scaling Semiconductors
For Rashi, Semiconductors are a key long-term growth lever. This is because the company’s Q1FY27 semiconductor revenues had already crossed 70% of FY26 semiconductor revenue. To scale this segment, Rashi has formed a 74:26 JV with Restar, a $4 billion Tokyo-listed semiconductor technology company.
The joint venture will focus on developing advanced image sensing solutions for robotic, industrial, and automotive applications in India. Rashi will receive direct distribution rights for Restar’s global portfolio. It will also receive technology transfer and access to major Japanese automotive and manufacturing customers operating in India.
Restar will deploy Japanese design experts to local design labs (such as Bangalore) to train Rashi’s engineering team. Management has conservatively guided for more than US$100 million (₹950 crore) in revenue under the JV within the next three years. The business will command a significantly higher margin profile than its core IT distribution business.
Q1 FY27 Financial Breakdown
Financially, consolidated revenue from operations grew by 61.9% to ₹5,101.9 crore. EBITDA (Earnings Before Interest, Tax, Depreciation, and Amortisation) surged 50% to ₹155.3 crore, while margins contracted slightly by 24 bps to 3%. Net Profit rose by 69.5% to ₹104.6 crore. Working capital cycles also improved from 73 days to 56 in Q1FY27.
Looking ahead, management is optimistic about Q2FY27, which has historically been a peak quarter. Strong commercial momentum and high consumer sentiment are expected to persist. However, the pace of component price increases is projected to slow down.
Management is confident it will maintain its main long-term growth trajectory of 20% CAGR, based on its 20-year track record.
#2 GNG Electronics
GNG Electronics operates under the consumer-facing brand “Electronics Bazaar.” The company sells refurbished devices with a one- to three-year warranty to build institutional trust. GNG now supplies refurbished technology to 49 countries, up from 46 countries at the end of FY26.
Furthermore, GNG Electronics has expanded its physical and retail footprint to more than 5,130 customer touchpoints globally. Its sourcing network includes 773 suppliers across regions.
Global Footprint & Q1 Revenue Mix
India remains its largest market, contributing 36% of revenue in Q1FY27. The United States contributed 24%, followed by Europe (23%), and the Middle East contributed 12%, leaving other regions at approximately 5% of the total mix.
Operationally, the company sold 108,000 laptops during the quarter, which accounted for 81% of revenue realisation. Desktops and other categories contributed the remaining portion of sales with 42,000 units.
ASP Expansion & The Memory Tailwind
Unit economics also expanded strongly, with laptop average selling prices rising to ₹30,763, up 12% year-on-year from ₹27,500 in the first quarter of FY26. Similarly, the ASP for desktops and other categories rose 10% year-on-year to ₹19,326, up from ₹17,500 in Q1FY26.
The core driver for GNG is rising memory component prices. Memory component prices surged an additional 5% to 10% during Q1FY27, with 8 GB DDR5 memory priced at $126 and 16GB DDR5 memory at $231. Since October 2025, DDR memory prices have actually increased nearly fivefold, providing a substantial tailwind to GNG’s pricing power.
Meanwhile, the price of a new entry-level laptop with 8GB of RAM and a 512GB SSD has risen from ₹40,000 to ₹48,000. This has led to a global PC supply shortage of about 3 crore units by June CY2026. This supply shortage and rising PC prices have driven companies, students, and institutions to refurbished alternatives.
Profitability Surges on Operational Leverage
The company’s Q1FY27 financials reflect this momentum. Although units increased by low double digits, revenue grew by 32.1% to ₹412.5 crore. EBITDA grew 50.4% to ₹52.9 crore, with EBITDA margin expanding by 156 basis points to 12.8%. This strong execution translated directly to the bottom line, with net profit growing 56.2% to ₹28.9 crore.
Upgraded FY27 Guidance & Inventory Strategy
To hedge against these rising hardware costs and protect its realisations, GNG had an inventory of about ₹700 crore at the end of Q1FY27. This strategic inventory enables the company to secure PCs at low costs, maintain pricing power, and fulfil large institutional orders instantly.
On the distribution front, during Q1FY27, GNG partnered with Redington Limited, India’s leading technology distributor. This partnership complements GNG’s existing relationships with other national distributors, including Ingram (ranked second in India) and Supertron (ranked fifth).
After a strong Q1FY27, management has upgraded its full-year guidance for FY27. The company now expects revenue growth of 30%, up from 25% previously. In addition, the company has increased its net profit margin growth target to 0.75% to 1.0%, up from the previous target of 0.5%.
The Valuation Mismatch: Discount vs Growth Premium
With higher margins and thus superior profitability growth, GNG boasts a relatively higher Return on Capital Employed (ROCE) and Return on Equity (ROE) than Rashi. From a valuation perspective, after a near 100% upside in 2026, GNG now trades at nearly double the industry median P/E, while Rashi trades at a discount.
| Peer Comparison (X) | ||||
Company | Price-to-Earnings Multiple | Return Ratios | ||
| Company | Industry | ROCE (%) | ROE (%) | |
| Rashi | 17.4 | 24.0 | 16.8 | 14.7 |
| GNG | 45.2 | 24.0 | 20.3 | 26.8 |
| Source: Screener.in (Data as of 14 August 2026) | ||||
Rashi and GNG Electronics offer two unique plays on India’s evolving technology cycle.
Rashi is building beyond distribution, with data centres, AI infrastructure and semiconductors opening higher-value revenue pools. GNG, meanwhile, is benefiting from a more immediate trigger as surging memory prices widen the cost gap between new and refurbished devices.
However, the trade-off is valuation. Rashi offers relative valuation comfort, while GNG commands a growth premium due to its higher-margin profile. That said, you could keep these names on your watchlist to track execution.
Disclaimer:
Note: Throughout this article, we have relied on data from http://www.Screener.in and the company’s investor presentation. We used an alternative, widely used, and accepted source of information only when the data was unavailable.
The purpose of this article is only to share interesting charts, data points, and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educational purposes only.
About the Author: Madhvendra has been deeply immersed in the equity markets for over seven years, combining his passion for investing with his expertise in financial writing. With a knack for simplifying complex concepts, he enjoys sharing his honest perspectives on startups, listed Indian companies, and macroeconomic trends.
A dedicated reader and storyteller, Madhvendra thrives on uncovering insights that inspire his audience to deepen their understanding of the financial world.
Disclosure: The writer and his dependents do not hold the stocks discussed in this article.
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