Been tracking this company for a while now and the company delievered beyond their guidance for FY26- The largest laptop refurbisher in India- GNG Electronics. Post includes quick RHP Notes followed by my thoughts on the company:
Market Cap: 4845 Crores
1. About the company:
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The company is India’s largest refurbisher of laptops and desktops and among the largest refurbishers of ICT Devices overall, both globally and in India with significant presence across India, USA, Europe, Africa and UAE, in terms of value, as of March 31, 2025 (Source: 1Lattice Report). The company operates under the brand “Electronics Bazaar”, with presence across the full refurbishment value chain i.e., from sourcing to refurbishment to sales, to after – sale services and providing warranty. The company solves customers’ requirement of affordable, reliable and premium ICT Devices which are as good as new devices, both functionally and aesthetically, and are backed by proven warranty. Electronics Bazaar is India’s largest Microsoft Authorised Refurbisher, in terms of refurbishing capability as of FY25.
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Electronics Bazaar is unique in the industry for its presence across the full value chain. Each of the facilities is equipped with extensive refurbishing capabilities which include not only screening and parts repair (L1 and L2 activities) but also motherboard repairs (L3 activities) along with laser keyboard reprinting, paint, fabrication and cosmetic work. Electronics Bazaar is amongst a few companies globally specialising in LCD repairs including repolarisation and light guide plate (LGP) correction. Additionally, the dispatch area, receiving zone, and QC division guarantee rigorous quality control.
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The packing department prepares devices for shipment, while the sales and operations teams distribute refurbished products to various distributors across cities, enhancing customer confidence with a 1 to 3 years warranty. The company operates from a state-of-the-art facility spanning 58,127.82 Sq. Ft. across India, UAE, and the USA, which gives Electronics Bazaar the flexibility to scale and meet growing market demands efficiently and effectively access ~70% of global GDP from these strategic locations.
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Electronics Bazaar’s facility in the USA serves North and South America, while its UAE facility provides access to Europe, the Middle East, Africa, and the Asia-Pacific regions. Electronics Bazaar has one of the largest facilities among Indian ICT refurbishes, with a high-level of integration.
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Certifications: The company also holds key certifications, including the prestigious R2V3 certification—recognized as the highest standard in responsible recycling—along with various ISO certifications, further reinforcing its commitment to quality and sustainability.
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The company offers other value – added services such as ITAD and e – waste management services, warranties, doorstep service, on–site installation, flexible pay options, easy upgrades, assured buyback programmes and buyback programmes for refurbished ICT Devices. The company provides tailored buyback solutions for laptops and desktops to help large format retail stores such as Vijay Sales (India) Private Limited (“Vijay Sales”) and OEM brand stores such as HP India Sales Private Limited (“HP”) and Lenovo Global Technology (India) Private Limited (“Lenovo”) to run efficient, customer – friendly buyback programs facilitating sale of new devices. The company also offers other categories of ICT Devices such as open – box and brand new ICT Devices, providing customers with a range of options that cater to different needs and budgets. In addition, the company also offers ICT Devices customised to customer specifications and requirements. Moreover, the company offers a wide range of stock keeping units (“SKUs”) and as of March 31, 2025, the portfolio included 5,840 SKUs.
2. Everything about the Procurement and Supply Channels: (The whole play infact)
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Electronics Bazaar serves as an IT asset disposition (“ITAD”) partner for leasing companies, IT consulting companies and banks as they meet their sustainability and data privacy requirements, thus the company enjoys a strong procurement advantage, underpinned by mature relationships with OEMs such as HP, and Lenovo, enabling direct procurement from these leading brands.
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Also serves as an IT asset disposal partner for India’s second – largest software company, in terms of market capitalisation as of Financial Year 2025, procuring their used IT assets.
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The company has a multi – channel global procurement network of 557 suppliers supported by an extensive procurement network in India and across the globe. The procurement network comprises corporates, consulting companies, intermediaries, recyclers, refurbishment partners, educational institutes, leasing companies, NBFCs, large format retail stores and OEM brand stores, as of March 31, 2025. As refurbishers, the company also enables HP and Lenovo for their assets/devices recovery services which they offer to their corporate customers which also helps them enable sale of new devices.
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RM: Major materials apart from ICT Devices are spare parts and accessories such as hard disk drive, solid state drive, random access memory, keyboard, battery, adapters and cables. These spare parts are procured from suppliers of spare parts and accessories.
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Distribution Dynamics and Channels:
- Devices refurbished by Electronics Bazaar sell at a premium compared to other players in the industry due to superior quality of product and Electronics Bazaar’s ability to provide proven and reliable warranty solutions.
- Electronics Bazaar’s comprehensive process of refurbishment of ICT devices such as laptops, desktops, tablets, servers, premium smartphones, mobile workstations and accessories ensures that such devices are similar to new, in terms of both performance and aesthetics, and able to offer laptops at one-third price of new devices.
- The company also offers best-in-class service, with a device customization facility for ‘configuration to order’ and strong after-sales support.
- The company has a sales network with refurbished ICT Devices being sold in 38 countries as of March 31, 2025. The sales network comprises 4,154 touchpoints, in India and globally, as of March 31, 2025. These touchpoints include sale of ICT Devices through IT Solutions Providers/ Value Added Resellers, System Integrators, E-Tailers, Rental and Leasing Companies and Distributors/Aggregators. The company even supplies to global refurbishment companies including US based companies such as Joy Systems Inc, HUBX LLC, PlanITROI LLC, and Europe based companies such as PhoenixRM Ltd (Trading as GreenIT), ATX Computers Group, who procure from Electronics Bazaar on account of quality, skill set and cost advantages. Additionally in India, among other prominent names, the company supplies to HP India Sales Private Limited, Lenovo Global Technology (India) Private Limited and Vijay Sales (India) Private Limited.
3. The refurbishment Process:
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Electronics Bazaar uses multiple check points and meets quality standards with world class SOPs. These include measures such as software reinstallation, reset settings, small part replacement, PCB chip repair level. The company goes an extra mile by focusing on data sanitization / data security using both soft and hard erasures. It uses data erasure measures like NIST SAS, etc, drive degaussing, and hard drive shredding. The company executes data sanitization procedures on all devices in strict accordance with R2 V3.
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The facilities are equipped with in-house parts and components (including LCDs) with restoration, fabrication and paint capabilities to improve cost efficiency, reduce dependency and provide better control on production time and quality of critical components.
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With in-house repairing capabilities of parts and components and reclaiming plastic parts using fabrication and paint allows the company to give a greater yield.
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Inwarding: ICT devices are logged into the system upon arrival (inward process). Timeline: Completed within 1 day.
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Data Wiping/Destruction: Storage drives undergo data wiping or destruction to ensure data security. Timeline: 3-5 minutes per drive.
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Entry Level Screening (ELS/L1): All components of the device are tested, and an existing level of service (“ELS”) report is prepared, documenting the device’s condition and performance. Timeline: 5 minutes per device.
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Allocation and Repairs:
- Devices are allocated to various teams based on refurbishing needs.
- Level 3 (L3): Repairs at the motherboard or chip level. Timeline: 1 hour per device.
- FIF (Fabrication in Factory): Fixing cracks, dents, broken plastics, rubber fixtures and hinge cover. Timeline: 1 hour per device.
- PS (Paint and Skin): Painting to make the device Equal to New and application of skin. Timeline: Masking: 10 minutes per device; painting and drying: 1 hour per device; skin: 5 minutes per device.
- LCD Repair: Restoration work on LCDs (e.g., polarizer application, LGP and LCD repair). Timeline: 0.5 hour per device.
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Functional Testing (L2): After repairs, devices undergo level 2 testing for functional reconfiguration, assembly and quality checks to ensure they are fully operational and cosmetically acceptable. Timeline: 30-45 mins.
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Quality Control and Assurance: Timeline: 10 – 15 minutes
- Devices that pass Level 2 are sent for quality check.
- After QC, they undergo cleaning, packing, and forwarding to the stacking area.
Quality assurance is the final step, ensuring devices meet the 21 quality checkpoints before being marked as finished goods.
4. The Industry Size
- The global refurbished personal computers market grew from US$ 9.7B in CY18 to US$ 17.1B in CY24, reflecting an 9.9% CAGR, and is expected to grow at 18.9% over CY24-29 reaching US$ 40.6B. By CY29, the global used and refurbished PCs market is projected to reach US$ 61.0B, with a CAGR of 10.4%, as more consumers seek cost-effective options without compromising on performance.
- Similarly, the Indian refurbished PC market grew from US$ 0.2 billion in FY19 to US$ 1 billion in FY25, showing a 28% CAGR, and is expected to reach US$ 4 billion by FY30, at a CAGR of 30%. However, even the organised market remains fragmented with no player occupying >5% of the market and a large number of small-scale outlets with limited reach and refurbishment capacity. In India, the organized market share grew from 5.2% in FY19 to 13.2% in FY25, with a robust CAGR of 35.5%.
5. P2P: (Not really peers though)
Quick Thesis:
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Geographical Expansion: Selling is not the problem if you know where to sell. Company entered 8 new countries and inceased the touchpoints significantly. (Q4 Concall)
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Refurbished market share gains coupled with ASP gains (Solid combo): A percentage of any shortfall in new PC Shipments due to n number of reasons finds its way into the refurbished shipments and guess who benefits.
ASP Gains:
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Economies of Scale: Imagine a bank selling 10k Laptops to a refurbisher and looking for upfront payment. The refurbisher not only has to buy them at an upfront cost, it must also ensure the procurement is relevant, the refurbishment process to be quick(Think refurbishment taking long enough for the model to become irrelevant), and then be able to sell it across channels globally. Many don’t even clear step 1 of the procurement process. Better procurement rates, lower marketing heads, lower refurbishment costs with quick turnaround = Benefits of scale. Most Important- No inventory write off. Post all the capex done in FY26- the capacity now stands at 150,000 Units per month.
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The ESG Tailwinds: France has introduced legislation to reduce the environmental footprint of digital technology. This mandates that 20% of IT devices bought by organisations need to be refurbished, with a target of 40% by 2040. The legislation is even more stringent in the public sector, targeting an increase of up to 50% by 2025. Similarly, The Irish Government, under its “Buying Greener” Green Public Procurement Strategy and Action Plan, aims that by 2025, at least 80% of newly procured ICT end-user products will be either refurbished or will meet other environmental standards. As global efforts to mitigate climate change intensify.
To sum up- Volume growth, Geographical expansion and ASP growth for few years.
Risks:
- Working Capital streched
- Brand identity used by promoter led entity- Kay Kay Overseas (Clarification given by the promoter is sufficient though): Watch this on issue: https://youtu.be/yizuFoTU8oI?si=tf3TNe3QIghokjGP
- Warranty costs and Inventory write off risks- Biggest risk
I will try to add a few more threads on how the growth looks for the future and numbers for FY26.
Disc: Transactions in last few months- Not invested!
