GNG Electronics (EBGNG) Q2 FY27 Profit Jumps 73% as Refurbished PC Demand Surges
The refurbished electronics specialist reported its strongest quarterly growth since listing, with revenue up 42% and profit up 73% year-on-year.
GNG Electronics posted a stellar Q2 FY27, with revenue hitting ₹625 crore and net profit surging 73% to ₹56 crore. Management raised its full-year revenue growth guidance to 40%, citing a structural shift towards refurbished devices.
For GNG Electronics, the business model is simple: sell refurbished computers at a fraction of new prices. The proposition turned compelling as new device prices soared 80% over the past year, doubling the absolute savings for customers and driving a structural demand shift. This dynamic powered the company's best-ever quarter, with revenue jumping 42% and profit surging 73% year-on-year.
Revenue for the September quarter reached ₹624.8 crore, up from ₹439.9 crore a year ago. Net profit climbed to ₹56.35 crore, pushing the net profit margin to 9%, a 160 basis point improvement. The sequential bounce was even sharper, with revenue up 51.5% and profit nearly doubling from the June quarter.
Revenue & profit
Revenue (₹ Cr)
Profit (₹ Cr)
Net Profit Margin
| Metric | CurrentQ2 FY27 | PreviousQ1 FY27 | Same quarter LYQ2 FY26 |
|---|---|---|---|
| Revenue (₹ Cr) | 624.81YoY +42% | 412.46 | 439.92 |
| Profit (₹ Cr) | 56.35YoY +73% | 28.93 | 32.66 |
| Net Profit Margin | 9.0%YoY +22% | 7.0% | 7.4% |
The margin engine behind the growth
The real story is in the margins. According to the company's earnings call, gross margin expanded by 515 basis points to 25.1%. Management attributed about 125-150 basis points of this to strategic inventory gains, with the rest from better pricing and the growing strength of its Electronics Bazaar brand. This pricing power is critical as the gap between new and refurbished device prices widens, allowing GNG to command a premium.
Investing in the next phase of growth
This growth is not cost-free. Employee costs surged 73.5% year-on-year as the company hired talent globally to manage new verticals and expand refurbishment capacity. Interest expense more than doubled, driven by higher borrowings to fund working capital for inventory. The consolidated balance sheet, cited by Arthneeti, shows total borrowings rose to ₹610.5 crore in September from ₹405.7 crore in March.
Management is confident these investments will pay off. They raised their full-year FY27 revenue growth guidance to 40% from 30%, as reported by Investing.com. The profit-growth target was also lifted, aiming for a 150 basis point margin expansion over FY26. The company processed 225,000 units in the quarter and believes its current capacity can support growth well into next year.
Key Points
- Revenue grew 42% year-on-year to ₹625 crore, the strongest quarterly growth since the company's listing.
- Net profit margin expanded to 9%, driven by a 515 basis point jump in gross margin from better pricing and inventory gains.
- Management raised FY27 revenue growth guidance to 40% and increased its profit margin expansion target.
- The stock reacted positively, trading up 4.18% near its 52-week high following the results announcement.
Hexa Perspective
The quarter validates GNG's positioning in a market undergoing a structural shift. Rising new-device costs are making refurbished alternatives more attractive, a trend management believes is durable. The margin expansion, while partly aided by inventory timing, is supported by genuine brand-led pricing power.
The catch is the rising cost of growth. Higher employee and interest expenses are necessary to scale but pressure the bottom line. Investors are betting that the company's elevated 30.5x P/E, which trades at a discount to the industry, is justified by its raised guidance and the long runway for the refurbished electronics market. The next few quarters will test whether this margin profile can be sustained as strategic inventory benefits normalize.
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