Rashi Peripherals Ltd Upgraded to Buy on Strong Technical and Financial Performance

Technical Trends Drive Upgrade

The primary catalyst for the upgrade was a marked improvement in the technical grade, which shifted from mildly bullish to bullish. Key technical indicators underpinning this change include a weekly MACD reading that remains bullish, daily moving averages signalling upward momentum, and Bollinger Bands on the weekly chart confirming a bullish stance. Although some monthly indicators such as the KST and Dow Theory show mixed signals—mildly bearish weekly KST and mildly bullish monthly Dow Theory—the overall technical picture is positive.

On 29 Jan 2026, Rashi Peripherals’ stock price closed at ₹357.05, up 6.52% from the previous close of ₹335.20. The stock traded within a range of ₹323.45 to ₹359.20 during the day, demonstrating strong intraday buying interest. The 52-week high stands at ₹408.90, while the low is ₹245.00, indicating the stock is trading closer to its upper range, reinforcing the bullish technical sentiment.

Valuation Remains Attractive Amid Growth

Rashi Peripherals’ valuation metrics continue to support the Buy rating. The company’s Return on Capital Employed (ROCE) for the half-year period is a robust 13.00%, with a trailing ROCE of 10.9%, signalling efficient capital utilisation. The enterprise value to capital employed ratio stands at a modest 1.2, indicating the stock is trading at a discount relative to its peers’ historical valuations.

Despite the stock generating a 5.18% return over the past year, its profits have surged by 52%, resulting in a very low PEG ratio of 0.2. This suggests that the stock is undervalued relative to its earnings growth potential, making it an attractive proposition for investors seeking growth at a reasonable price.

Financial Trend Strengthens with Consistent Quarterly Growth

Rashi Peripherals has demonstrated a strong financial trajectory, with positive results reported for three consecutive quarters, including Q2 FY25-26. Net sales for the quarter reached ₹4,155.41 crores, reflecting a 31.3% growth compared to the previous four-quarter average. Profit Before Tax (PBT) excluding other income stood at ₹74.18 crores, growing at an impressive 41.5% over the same period.

The company’s long-term sales growth rate is healthy at 22.60% annually, underscoring sustained demand in the IT hardware sector. This consistent financial performance has bolstered investor confidence and contributed to the upgrade in the Mojo Grade from Hold to Buy.

Quality Assessment and Market Position

Rashi Peripherals operates in the IT hardware industry, a sector characterised by rapid technological change and competitive pressures. The company’s quality grade remains strong, supported by its ability to maintain profitability and capital efficiency. Its market capitalisation grade is rated 3, indicating a mid-sized company with room for growth and scalability.

While the stock’s one-year return of 5.18% trails the Sensex’s 8.49% gain, the company’s profit growth and valuation metrics suggest it is well-positioned to outperform in the medium term. Over longer horizons, the Sensex has delivered significantly higher returns (38.79% over three years and 75.67% over five years), but Rashi Peripherals’ recent operational improvements could help it close this gap.

Technical Indicators in Detail

Examining the technical indicators more closely, the weekly MACD remains bullish, signalling positive momentum. The Relative Strength Index (RSI) on both weekly and monthly charts shows no extreme signals, suggesting the stock is not overbought or oversold. Bollinger Bands on the weekly chart are bullish, indicating price strength with potential for further upside.

Daily moving averages confirm a bullish trend, reinforcing short-term momentum. However, some caution is warranted as the weekly KST and On-Balance Volume (OBV) indicators show mildly bearish tendencies, reflecting some selling pressure. The Dow Theory readings are mixed, mildly bearish on the weekly timeframe but mildly bullish monthly, suggesting a transitional phase in the stock’s trend.

Comparative Performance and Market Context

Rashi Peripherals’ recent weekly return of 1.68% outpaced the Sensex’s 0.53%, indicating relative strength in the short term. However, monthly and year-to-date returns are flat or slightly negative, mirroring broader market volatility. The stock’s ability to maintain gains amid a challenging environment highlights its resilience.

Given the company’s strong fundamentals, attractive valuation, and improving technical outlook, the upgrade to a Buy rating is well justified. Investors seeking exposure to the IT hardware sector may find Rashi Peripherals an appealing candidate for portfolio inclusion, particularly as it trades at a discount to peers and offers robust growth prospects.

Outlook and Investor Considerations

Looking ahead, Rashi Peripherals is expected to benefit from sustained demand in the IT hardware segment, driven by digital transformation initiatives and increased enterprise spending. The company’s ability to maintain strong sales growth and improve profitability metrics such as ROCE will be critical to sustaining its upgraded rating.

Investors should monitor the stock’s technical indicators for confirmation of the bullish trend, particularly the weekly KST and OBV readings which currently show some bearish signals. Additionally, valuation multiples should be watched closely to ensure the stock does not become overvalued as earnings growth continues.

Overall, the upgrade to a Buy rating reflects a balanced assessment of Rashi Peripherals’ quality, valuation, financial trend, and technical outlook, making it a compelling option for investors seeking growth in the IT hardware sector.

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