📌 At a Glance
Redington Ltd just wrapped FY25 with ₹99,334 Cr revenue and ₹1,821 Cr profit, clocking its highest-ever PAT. But here’s the kicker: OPM stuck at a humble 2%, and debt is quietly chilling at ₹2,809 Cr. For a company that handles half of India’s tech hardware movement, the numbers scream scale without swagger.
🧵 About the Company
Born in 1993, Redington Ltd is India’s largest tech product distributor. You buy a Dell, iPhone, HP printer, Cisco router, or an Xbox — odds are Redington moved it.
Their model:
- Import from global OEMs (Apple, Lenovo, HP, etc.)
- Distribute via 30,000+ channel partners
- Offer credit + logistics + after-sales support
- Operate across India, Middle East, Turkey & Africa
- Use automated warehouses (ADC) in Chennai, Kolkata, and Dubai
This is B2B supply chain tech — boring on paper, brilliant in scale.
💼 Key Managerial Personnel (KMP)
- Rajiv Srivastava – MD
- Ramesh Natarajan – CEO
- Rajiv Srivastava took over leadership from long-time promoter-linked execs.
- FY25 was the first full year under the “new-gen operator mindset”, post the change in top brass.
💰 5-Year Financials (FY21–FY25)
| Year | Revenue (₹ Cr) | EBITDA (₹ Cr) | PAT (₹ Cr) | EBITDA Margin % | EPS (₹) | Net Worth (₹ Cr) | Borrowings (₹ Cr) | ROCE % |
|---|---|---|---|---|---|---|---|---|
| FY21 | 56,946 | 1,392 | 788 | 2% | 9.74 | 4,939 | 622 | 20% |
| FY22 | 62,644 | 1,839 | 1,315 | 3% | 16.38 | 5,785 | 831 | 28% |
| FY23 | 79,377 | 2,203 | 1,439 | 3% | 17.82 | 6,927 | 3,321 | 25% |
| FY24 | 89,346 | 2,009 | 1,239 | 2% | 15.59 | 7,548 | 2,958 | 19% |
| FY25 | 99,334 | 2,029 | 1,821 | 2% | 20.53 | 8,721 | 2,809 | 18% |
📈 Revenue CAGR (5Y): 12%
📉 Margins stuck at 2–3%
💥 PAT CAGR (5Y): 19.5%
🧾 Dividend: Consistent 33–40% payout ratio
💣 Other Income FY25 = ₹854 Cr (boosted PAT)
📊 Stock Journey
- June 2020: ₹76
- June 2025: ₹283
- 🔺 5-Year Return: +272%
- 📈 CAGR: ~30%
Yet, valuation remains reasonable:
- P/E: ~18.8
- Dividend Yield: 2.4%
- Book Value: ₹112 → P/B ~2.5x
Redington is the tech stock your techie cousin has never heard of.
Until he reads this and buys it the next day.
🧮 Forward-Looking Fair Value (FY26–FY27)
Assumptions:
- Revenue CAGR: 10–11%
- PAT margin: stays below 2%
- Other income moderates
- Fair valuation P/E: 15–17x
FY26 EPS Estimate = ₹22–₹24
Fair Value Range = ₹330–₹410
At CMP ₹283, Redington looks undervalued if profits remain stable, and overvalued if other income disappears.
🔭 Growth Outlook
- 🖥️ Riding India’s digitization wave – increased demand from retail + SMEs
- 📦 Expanding warehouse infra (more ADCs coming)
- 🌎 Strong Middle East & Africa footprint = USD hedge
- 💰 Playing in value-added services (logistics, cloud, third-party support)
BUT…
Inventory turnover and margin compression are eternal risks in distribution
Also: the big FY25 PAT number is powered by non-operating income (₹854 Cr).
😎 EduInvesting Take
“Redington is the Flipkart seller behind every laptop deal… except it doesn’t get ratings, just margin compression.”
This is a biz built on speed, scale, and wafer-thin profits.
You don’t bet on Redington for ‘explosive growth’. You bet on it for stable compounding — like a boring SIP.
Unless… margins collapse further. Or that juicy “Other Income” disappears.
⚠️ Risks & Red Flags
- 💣 Other Income inflated FY25 PAT
- 📉 Margins too low to absorb demand shocks
- 🧾 Working capital cycle slowly worsening
- 📉 EPS volatile — due to external factors, not ops growth
- 🧮 Distribution businesses always at the mercy of OEM pricing & channel pressure
🎯 Verdict
Redington is a ₹99,000 Cr biz that operates on 2% margins and still survives. That’s either genius or gambling.
If you believe digitization = devices = distribution demand → you’ll love Redington.
If you want predictable cashflows + fat margins → move along, friend.
🗓️ Date: 8 June 2025
✍️ Author: Prashant Marathe
🏷️ Tags: Redington Ltd, Tech Distribution, FY25 Results, 5-Year Recap, Smallcap Tech, Value Pick, India-MENA Biz
