Goldman Sachs Boosts Smallcap Stock with Block Deal as Shares Soar 50% in Just Six Months!
Shares of GNG Electronics experienced significant market activity on Thursday, highlighted by a block deal valued at approximately Rs 175 crore. Notably, promoter Vidhi S Khandelwal divested 44.87 lakh shares at a price of Rs 390 per share, facilitating a substantial transaction that attracted both domestic mutual funds and foreign institutional investors. Among the key purchasers was Motilal Oswal Equity Opportunities Fund Series II, which acquired 6.41 lakh shares. Other participants included prominent investors such as Mirae Asset Mutual Fund, ITI Mutual Fund, and Goldman Sachs Asia Equity Portfolio, indicating robust institutional interest in this recently listed player in the refurbished electronics sector.
Motilal Oswal’s initiation of coverage on GNG Electronics presents a bullish outlook, emphasizing the company’s commanding position within the global refurbished electronics market. The firm has developed a comprehensive refurbishment platform that spans approximately 46 countries, generating nearly 95% of its revenue through institutional and B2B channels. The integrated model encompassing sourcing, refurbishment, and distribution is pivotal in achieving an impressive 43% volume CAGR projected between FY23 and FY26. This strategic positioning underlines GNG’s capacity to capitalize on market trends, particularly as the refurbished personal computer segment enters a new growth phase.
The positive sentiment is further bolstered by Motilal Oswal’s assessment of several macro-environmental factors contributing to GNG’s anticipated performance. These include heightened affordability, enhanced product reliability, and the influence of AI-driven hardware replacement cycles, along with supportive regulatory changes such as the right-to-repair laws and extended producer responsibility norms. The company’s internal refurbishment capabilities have yielded significant advantages, evidenced by low warranty-related costs despite scaling volumes nearly threefold over FY23-26, signifying superior operational controls and process efficiencies.
Looking ahead, the brokerage forecasts a compelling growth trajectory for GNG Electronics, projecting a revenue CAGR of 26%, EBITDA CAGR of 31%, and profit CAGR of 36% from FY26 to FY28. Such robust forecasts are underpinned by anticipated volume increases, margin enhancements, and the favorable effects of lower financing costs. As GNG Electronics operates under the reputable “Electronics Bazaar” brand, it stands out as one of the largest organized entities in the refurbished ICT devices market, catering effectively to a diverse clientele encompassing enterprises, retailers, and distributors on a global scale.
Source: The Economic Times
(Expert Note: This report was prepared by the Wealthova team.)