Crisil Ratings reaffirms ratings of Rashi Peripherals at 'AA-/A1+'

Crisil Ratings stated that the group's business risk profile continues to benefit from its established market position in the domestic IT hardware distribution industry, with the company remaining amongst the top five IT hardware distributors in India.

Continued addition of new products, expansion into newer geographies and strengthening of the distribution network have supported sustained growth in scale of operations over the past few years.

The revenue is expected to witness further strong growth in fiscal 2027, supported by the acquisition of VDA Infosolutions (VDA), improvement in product diversification and continued expansion of the customer base.

The profitability is expected to improve further over the medium term, aided by continued growth in revenue and contribution from VDA. Nevertheless, profitability remains susceptible to the competitive nature of the IT distribution industry and the group's ability to effectively manage supply chain costs and vendor relationships.

The financial risk profile remains strong, supported by a healthy net worth of Rs 2033 crore as on 31 March 2026, and comfortable debt protection metrics.

The group's liquidity position remains strong, supported by healthy cash accrual generation and adequate financial flexibility. Net cash accruals are expected to exceed Rs 400 crore against scheduled debt obligations of only Rs 105-106 crore over the near term. Average bank limit utilisation remained moderate at around 77% during the 12 months ended May 2026.

Further, RPL had free cash and cash equivalents of Rs 79 crore as on 31 March 2026, while VDA had cash and cash equivalents of around Rs 150 crore, providing additional liquidity support for post-acquisition.

The ratings continue to reflect RPL's established market position in the IT and peripheral products distribution business, diversified product portfolio and geographical presence, and strong financial risk profile.

These strengths are partially offset by the inherently low-margin nature of the IT distribution business, large working capital requirements and susceptibility to the performance of key principals.

Rashi Peripherals is a distributor of personal computers and notebooks, mobile phones, wearable IT consumables, printers, peripherals, networking products, storage products, UPS and invertors. It also provides after-sales services.

The scrip rose 0.71% to currently trade at Rs 820.50 on the BSE.

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