32% growth, raised guidance—but Q1 seasonal; test momentum ahead

Delivered ₹412.5 Cr, +32.1% YoY; 64% from international (US 24%, Europe 23%, Middle East 12%)

Gross margin 24.65% (₹101.6 Cr gross profit); +329 bps YoY, +542 bps QoQ confirmed

Q1 delivered 32% rev growth; guidance raised 25%→30%; claim supported by delivery

8GB DDR5: $126 (vs $62 in Oct 2025 implied); 16GB DDR5: $231. ~3.8x on 8GB. Claim overstated initially but corrected.

Q1 units ~150K (+18% YoY implied); ASP +12% (laptops ₹30,763 vs ₹27,500). Math works: 32% growth = 18% units × 12% ASP uplift ≈ 30-32%

Q1 inventory ₹700 Cr (down from ₹740 Cr EOY); India built stock for price increases. Claim is about strategy not contradicted.

FY27 target 25%→30% revenue growth (raised mid-call). PAT margin growth +0.5%→+0.75-1%. Reflects confidence in Q1 beat and structural tailwinds.

US+Europe now 47% of sales (vs ~40% implied prior). US 24%, Europe 23%. Gross margin benefit: international ~30% vs India ~21% (QoQ dynamics).

₹700 Cr inventory at Q1-end, built strategically to lock in old prices before DDR5 jumped. Management sees this as margin and pricing power lever, not a concern.

Refurbished laptop now ~30% of new price (vs ~20% pre-tailwinds). Management claims room to 50% if trust brand solidifies. Margin upside: 30%→50% = 17%+ expansion on current margin.

Ajay: 81% from laptops, 19% others. Geographic mix (US/EU 47% vs India 36%) widening. Deeper penetration across all markets, not commodity pricing—trust and service proposition driving realization.

Ajay: Directionally correct split. Acceptability rising in both. Won't specify differential margins by state. Sharad: Negligible competition in our penetrated markets, pricing power visible. Margin uplift structural, not temporary.

Sharad: Revenue guidance revised 25% to 30%. PAT margin growth increased 0.5% to 0.75-1%. Conservative approach—under-promise, over-deliver.

Sharad: Strategic inventory helping margin and penetration. Prices up 5-10% quarterly (corrected: 5x since Oct). Buying ahead of curves locks old prices. Yes, inventory gains are real, temporary until prices stabilize.

Sharad: Procurement costs trailing (not in tandem with ASP inflation). Contracts + vendor relationships lock old prices. Well-positioned for next couple of quarters. Will keep higher inventory strategically.

Sharad: Expansion phase; hiring in advance for niche production training curve. Marketing for channel visibility. Leverage coming soon, but near-term opex necessary. Current situation demands org beefing up.

Sharad: Q1 is low seasonality quarter. Conservative guidance preference. Growth won't slow down—that's my answer to your concern. Job is to accelerate growth, top-line and bottom-line.

Sharad: Used cars 50% of new, used phones 50% of new. Refurbished PC currently 30%, room to 50% if trust builds. That's 17% margin upside. Not capped by new price; trust is the lever. Sourcing and sales both levers.

Sharad: B2B preferred—better margin, no price elasticity. Dell focused on enterprise. B2C later if retailers display properly and we get margin. Current B2B runway huge; staying focused.

Sharad: No disruption. All facilities up, shipments via air ongoing. 500+ missiles/drones intercepted by UAE; commerce functional. Employee count risen. No visible damage.

Raised mid-call based on Q1 beat and structural tailwinds (memory shortage, new PC unaffordability, refurbished adoption). Conservative approach; prefer under-promise.

Driven by gross margin expansion (pricing power, product mix, geographic mix), but partially offset by opex outpacing growth (hiring, training, marketing).

Refurbishment in-house, no machinery-heavy model. Focus on inventory management and distribution network, not fixed assets.

DDR5 prices up 5x since Oct 2025, driving new PC prices +₹8K (₹40→₹48K entry-level). This inflates refurbished demand & gross margin +329 bps YoY. If memory stabilizes or falls, both drivers reverse sharply.

Business buys from banks, leasing companies in lumpy lots. ASP & margin sensitive to procurement timing, lot size, pricing leverage. Non-linear, hard to forecast. One large deal loss (e.g., US bank 60K units) materially impacts Q.

Inventory ₹700 Cr (strategic buy ahead of price inflation). Net debt ₹406 Cr (+₹6-7 Cr QoQ despite lower profit). WC model requires 30-40 days finished goods for instant delivery moat. If sales slip or prices don't rise as expected, inventory becomes a drag (writedown, obsolescence, financing cost).

Employee costs and other expenses up ~65% YoY while revenue +32%. Hiring ahead of curve (niche production training), marketing (channel meets, Chai Pe Charcha, dealer engagement), sales support. Operating leverage promised soon but not yet visible in EBITDA or PAT margin %.

UAE refurbishment facility and Middle East distribution exposed to geopolitical tension. While management reports no impact (airborne shipments, high interception rate), escalation could disrupt logistics or facility operations.