Nikhil Motiani, Promoter & Whole Time Director, Silicon Rental Solutions, highlighted the company’s evolution into a full-stack CapEx-to-OpEx solutions provider, expanding beyond IT rentals with financing, value-added services, and Centre of Excellence (COE) offerings. He added that the company is targeting 35–40% annual growth, supported by strategic partnerships, strong cash flows, and continued business expansion.
Karunya Rao: Hi and welcome to SmallCap Spotlight and joining us today on the sidelines of our flagship event is Mr. Nikhil Motiani, he is a director at Silicon Rental Solutions. Nikhil, thank you once again for joining us and we’ve had you and your father who’s also one of the promoters in the company join us in the past. I want to understand that since we last spoke, several things have changed and in fact I was reading some of your investor material which described the company as a full-stack tech rental partner model.
Help us understand what that means, how have things changed in the company in the last few months since we spoke?
Nikhil Motiani: Thank you, firstly thank you for this. So when we call ourselves a full-stack rental company, what we mean is that whatever the solution that is required by the client, we can provide that. Our expertise till date, while it might have been more focused on IT, what we realise is that there is a lot of expertise we’ve built when it comes to credit risk management, when it comes to capital deployment and when it comes to just understanding which customer is good versus the bad.
So when it comes to providing a hardware solution, we’ve positioned ourselves where we can give you whatever solution you require and we do it from a capex to opex. Along with that with that capex to opex, so the opex has two arms to it. One is obviously the financial arm where we’re providing the financing of the equipment.
Secondly, we have our value-added services which adds on to our margin as well as the value that the customer gets from us. So that is what we mean by a full-stack rental service where it’s an end-to-end thing where you come to us with your requirement and we provide it to you with the financing, the service till the end of the duration of this contract. Talking about new services, you’re also offering something called COE as a service.
Karunya Rao: Now was that an organic extension of what you already did or is it a genuinely a brand new line of revenue that you guys have sort of started out?
Nikhil Motiani: So I would say it’s a little bit of both. Mainly, definitely an organic extension of the arm because like I said you know as a capex to opex company, COE is your centre of excellences. There are two components to a COE.
One is your equipment that you put in the centre. That equipment could range from anywhere from a CNC machine to something smaller and there are these big OEMs who are specifically creating curated machines for these COEs. So there is obviously the hardware part and there’s the teaching part.
So when we talk about a COE, it becomes a good extension to what our rental has been. Customer will be an educational institution or a bigger university. It could be that we’re providing the hardware on lease slash rent.
We service the equipment, we maintain the uptime, we give you the same output we have been giving till date. Along with that, we partner with companies for the teaching part. So that is where you know the additional partnership that we’ve created with other teaching companies that sort of seamlessly comes into this and we provide the full COE experience.
Karunya Rao: And on an average basis, what is the the contract duration like right now?
Nikhil Motiani: We look at contracts in on an average would be two years, two years to three years.
Karunya Rao: So is has that been consistent for you for the last few years or quarters or has that changed in any way?
Nikhil Motiani: Pretty much consistent. We focus on longer duration orders because that maintains our that for us it means that you know we know that our capital is deployed and we have a good visibility of what the returns will be for the next few years.
Karunya Rao: Let’s also understand about your client base. You’ve talked about pan-India reach of 250 cities last time when we spoke. What is the tier 2-3 expansion really looking like? Where are you right now in terms of that 250 cities target and are you setting up local service hubs, you’re outsourcing, you’re partnering, what is how is it working out?
Nikhil Motiani: So currently the way we’ve built our entire supply chain is that we have partnerships, we have our own people and we have like a model that we have a lot of third-party people on like a third-party vendor on feed.
So when it comes to most of the metros, we have our presence there very directly and obviously our staff can travel to tier 2 cities as well. So the way we built it is that we do a cost-benefit analysis and we know for this thing if we third-party outsource it, it’ll be much cheaper for us. So we already have those tie-ups and partnerships in place to reach to any and every corner of India to give a last mile support.
Karunya Rao: So how many cities have you reached so far? Honestly we’ve reached like the 250 plus numbers is the number of cities we’ve already reached over time. So this obviously includes one or two devices that might be in one particular location because we have clients that are pan India, they have a lot of work from home setups. So we do have requirements where we need to deliver even one laptop to the insides of Jharkhand and other places.
Karunya Rao: I have another question but that’s more pertaining to the company stock. It’s seen some sharp price movements as well this year and there were some regulatory clarifications also that were sought a few times. So for investors who are tracking that volatility, what’s the message you want to leave them with? What’s going on? What’s happening at the company and anything that you want to clarify?
Nikhil Motiani: To be honest, what I would like the investors to really focus on is the story that we’re building.
It’s definitely a marathon, it’s not a sprint. The promoters and the entire team is entirely focused just on business growth. That is what our focus is.
While we 100% agree that investors need to be rewarded, we believe that they will be rewarded by our hard work that we’re putting into the company and the kind of steps that we’re taking to do the next big thing is how they’re going to be rewarded. So while the price has moved sharply, they may not have seen the returns that they expected. I would like them to keep their faith intact in us.
I would like them to believe that every day, right from our waking time till the time we sleep, it’s purely for the company and it’s for the growth of the company. And every decision that we take is not just to reward them, but also add some value to society as well. So this is definitely, we’re focused on that growth.
So hopefully they should stick with us.
Karunya Rao: So any number, metric, goal, any monitorable that investors should now be watching out for?
Nikhil Motiani: 100%. So in terms of growth, we’re looking anywhere between 35 to 40% year on year and we would like to maintain that.
The way we’ve positioned ourselves in the last two years, we’ve built some great channel partnerships and great alliances that are definitely going to help us increase our business. The way we position ourselves as not just an IT rental company, but more of an CapEx to OpEx solution providing company gives us a lot of leeway to expand our base into other products as well. COE being a very good example of that.
And honestly, that’s just the start. There is an immense scope in this area. With how volatile the markets are right now, people would prefer to go into better finance deals with the service support.
And that’s where we are positioned right now. So it’s just about everything clicking at once.
Karunya Rao: In your last conversation with SmallCap Spotlight, we had the management say that acquisition is always an option.
So anything that has happened on that front, anything you’re looking at in terms of inorganic growth opportunities?
Nikhil Motiani: 100%. We are always in talk with companies which are probably doing very similar things. They’re smaller in scale, but definitely provide that extra arm that we may not be able to reach to.
We’re always in talk with those. When it comes to acquisition, we did pull in a little bit of an investment last year. And hopefully, like I said, the returns should be visible in the coming year for that investment.
Karunya Rao: And with respect to the full stack pivot that the company has done, any one metric beyond revenue and profitability that investors should be monitoring as far as this big business shift goes? What would that be?
Nikhil Motiani: 100%. So what I would like the investors to focus on is we’re very cash flow positive. Due to depreciation being the largest expense out there, we’re a cash rich company.
While that’s getting deployed, we fairly have a good generation. And that is something that investors should also look at, other than just the revenue and the path. Apart from that, like I said, there are very few companies which are probably 35-40% a bit positive.
And that should be something that investors can also focus on.
Karunya Rao: Wonderful. Thank you so much Nikhil for joining us and for taking us through the growth phase that the company has been in and what has been happening at Silicon Rental Solutions.
Nikhil Motiani: Thank you so much.