Artificial intelligence is reshaping the global PC market by driving demand for data centre infrastructure and tightening the supply of key components used in personal computers. The resulting rise in memory and processor prices has pushed up the cost of new computers, creating an opportunity for refurbished PC sellers such as GNG Electronics.
GNG Electronics' shares have risen more than 100% in 2026 as investors bet the company can benefit from this shift. The company refurbishes computers and other electronic devices under the "Electronics Bazaar" brand and has expanded its operations, distribution network and refurbishment capacity to meet growing demand.
The company's investment case rests on three factors: rising prices for new computers, expansion across international markets and improving profitability. Management also expects elevated component prices to support demand for refurbished devices over the next several quarters.
Business Expansion
GNG Electronics refurbishes and sells computers, laptops and other electronic products. It offers warranties of one to three years on refurbished devices to target both consumer and enterprise customers.
The company positions its products as a lower-cost alternative to entry-level new computers. Its customers include first-time computer buyers, students, small businesses and enterprise clients.
Computers and laptops contributed about 81% of revenue in FY26, while other electronics accounted for the remaining 19%. During the year, GNG refurbished 727,000 units and expanded its presence to 46 countries from 38 at the beginning of the year.
The company operates refurbishment facilities in India, the UAE and the US and serves customers through 4,895 touchpoints across enterprises, institutions, distributors and channel partners.
India contributed 33% of FY26 revenue, followed by the US at 21%, Europe at 20%, the UAE at 12% and the rest of the world at 14%. Revenue from India rose 80% year-on-year to Rs 622 crore, making it the company's largest market.
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Growth Drivers
Management said the AI-led shift in the semiconductor industry has tightened the supply of components used in personal computers.
According to the company, the price of an 8GB DDR5 memory module increased to about $120 from $23.35 over six months. Prices of 1TB SSDs rose 3.5 times, while processor prices increased 45%.
Management said these higher component costs lifted the price of entry-level laptops in India by about 57% over the same period, while prices in international markets rose about 40%. The company believes this has increased the appeal of refurbished computers for consumers and businesses.
IDC estimates global shipments of new PCs will decline 11%, or about 32 million units, in 2026. At the same time, AI adoption is expected to increase demand for computing devices, potentially leaving an unmet demand of 55 million to 60 million PCs.
To prepare for sustained supply constraints, GNG increased inventory to Rs 743.1 crore at the end of March 2026 from Rs 486.6 crore a year earlier.
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Management said it expects elevated component and new computer prices to continue until January 2028. It believes inventory acquired at lower costs could support future margins, although higher inventory also exposes the company to risks if demand weakens or component prices fall faster than expected.
The company expanded EBITDA margin by 166 basis points to 10.6% in FY26, while net profit margin rose 209 basis points to 7%. Management has guided for at least 50 basis points of further expansion in net profit margin, implying EBITDA margin of about 11.5%.
GNG is also expanding its global distribution network. It has partnered with Ingram and Supertron and is in advanced discussions with additional distributors in the US and Europe. The company is offering 30 to 45 days of credit to channel partners to support sales.
It has increased refurbishment facilities from three to eight in the UAE and from one to two in India. Its workforce has grown to 2,148 from 1,200, while refurbishment capacity has reached about 150,000 units a month.
To widen adoption, the company is introducing an EMI programme that offers premium laptops from Rs 1,000 a month. Management said it will also increase spending on marketing, influencer campaigns and channel partner events.
Financial Performance
Revenue from operations rose 34% year-on-year to Rs 1,891 crore in FY26.
EBITDA increased 59% to Rs 200.5 crore, with EBITDA margin at 10.6%. Net profit climbed 91% to Rs 132 crore.
Net debt declined to Rs 300 crore in March 2026 from Rs 383 crore a year earlier.
The company reported return on capital employed of 20.3% and return on equity of 26.8%. Management expects revenue to grow about 25% in the next financial year.
Valuation
At Rs 656 a share, GNG Electronics trades at 56.6 times FY26 earnings, compared with 18 times for Rashi Peripheral and 13 times for Redington.
The premium valuation reflects expectations of continued revenue growth, margin expansion and international expansion. Continued execution on these fronts will be important to support the current valuation.
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