Newjaisa Technologies Ltd Q4 FY2026 Concall Summary

Key Takeaways

• Amazon exit forced a hard reset: Revenue fell from ₹65 CR to ₹40 CR as 65% of sales vanished overnight when Amazon stopped selling refurbished goods in February 2025, triggering a year of consolidation and a painful pivot to owned channels.
• One-time inventory write-off cleans the slate: A ₹12 crore write-down, driven by obsolete sub-8th-gen stock and spares that became unsellable after the Amazon exit and Windows 10 end-of-support, clears the way for a cleaner balance sheet.
• Margins held despite the model change: Loss margins were maintained even as the business radically reoriented from marketplace-led retail to direct website and enterprise sales, with ASP improving YoY on the enterprise mix shift.
• EBITDA turned positive in February 2026: After a year of restructuring, a 46% headcount reduction, and fixed-cost drag, the company broke even at the EBITDA level in the last two to three months of the fiscal year.
• What to watch next quarter: Whether the core PC business can sustain its ~10% H1-to-H2 growth trajectory now that the one-time mobile transaction and inventory clean-up are behind it, and whether the enterprise team’s 80% retention rate converts into a meaningful revenue ramp.

The Amazon Shock & Channel Reset

• 65% of revenue disappeared overnight: Amazon was the dominant sales channel, and its February 2025 decision to stop selling refurbished goods forced Newjaisa to rebuild its go-to-market from scratch around its own website and a newly built enterprise sales team targeting SMEs, large corporates, and education.
• The pivot is showing early traction: The core PC business grew ~10% from H1 to H2 FY26 once a one-time ~₹2 crore mobile transaction in H1 is excluded, while the online retail channel remained flat across halves.
• Enterprise team built ground-up: The company stood up a dedicated enterprise sales force during the year, reporting strong conversion ratios and 80% customer retention, though absolute scale remains small relative to the lost Amazon volume.
• R2V3 certification unlocks OEM relationships: Completing the international R2V3 certification during the year is a precondition to work directly with OEMs, a channel the company could not access before.

Vishesh: "This year was largely a year of consolidation and re-orientation. We doubled down on our own channels that includes our website and also our efforts towards enterprise sales including SMEs large corporates and education as a sector."

Inventory Write-Off: What Got Cleared & Why

• Three forces made older inventory unsellable: Microsoft ended support for Windows 10, making 8th-generation and below laptops obsolete for most buyers; the Amazon marketplace exit removed the only channel that could liquidate low-end stock quickly; and spares like DDR3 RAMs and older hard disks were sold at roughly 10% of book value.
• The ₹12 crore write-off, broken down: 20% of the write-off value was old-generation laptops and desktops; 60% was spares, of which 80% related to those same old-generation machines. The remaining portion covered other aged components.
• Current inventory is healthier: 85% of inventory by quantity is now 8th generation and above, and the below-8th-gen portion is a much smaller share by value because those units carry lower prices. Average ageing across all inventory sits at 90 to 105 days.
• No further write-offs expected: Management believes the comprehensive audit and write-down have addressed the problem fully and does not envisage more ageing inventory charges. The company now gets quarterly external inventory valuations with proper ageing controls.

Vishesh: "We did a comprehensive inventory audit and took a one-time write-up on our inventory positions as such."

Cost Structure & the Path to Operating Leverage

• Fixed costs were a millstone at low volumes: The facility is built to support 15,000 units per month, and with volumes depressed, fixed costs including leadership and employee overhead ran at ~15% of revenue, down from ~20% earlier but still enough to drive negative EBITDA. Management expects this to stabilize at 7 to 8% in steady state.
• Headcount was cut 46% at the start of FY26: The reduction took a full quarter to implement, and the company has only in the last quarter returned to hiring as volumes began to recover.
• Support functions are already lean: Finance, IT, MIS, and marketing together run at 7 to 8% of the top line, and management sees that ratio optimizing naturally as revenue builds rather than through further cuts. Top management remuneration is expected to stay flat.
• EBITDA broke even in February 2026: After a year of restructuring, the company entered positive territory in the last two to three months of the fiscal year, though no specific timeline was given for sustained profitability.

Demand Environment & Pricing

• Hardware cost inflation is a tailwind: RAM and SSD prices have risen 30 to 40%, making refurbished devices more attractive to price-sensitive buyers and widening the value gap versus new equipment.
• ASP improved as the mix shifted: Moving from a purely retail customer base to include enterprise sales lifted the average selling price year-on-year, a structural improvement that should persist if the enterprise channel scales.
• Inventory is expected to stay flat: Management does not see inventory rising significantly from the current ₹26 crore level and believes there is no opportunity to reduce it by more than 10%, because stock must be maintained to service the order book. The level should remain stable through both halves of FY27.

Competitive Context & Unanswered Questions

• Industry grew ~50% while Newjaisa shrank: An analyst flagged that peers like GNG Electronics and EPW India are growing at roughly 50% year-on-year, and management did not directly explain why Newjaisa’s trajectory diverged so sharply beyond pointing to the Amazon exit and the one-time mobile transaction in H1.
• Investor communication gaps surfaced: One analyst noted that emails to the company’s investor relations address had gone unanswered; management provided the same email ID again and offered to loop in a team member, but did not address the specific complaint about non-response.
• Granular inventory data was not available on the call: When asked for the exact value of inventory by generation rather than just percentage splits, management said they could not provide the figure offhand and would share a sheet later.

Guidance & Commitments

Vishesh: "The verse is over and we will be we are like well positioned in terms of building upwards from here and coming into positive territories as well."

Key Metrics