01 — At a Glance
The Quiet Workhorse That Just Proved Why Distribution Matters
- 52-Week High / Low₹335 / ₹177
- Q3 FY26 Revenue₹30,959 Cr
- Q3 FY26 PAT₹436 Cr
- Q3 FY26 EPS₹5.57
- Annualised EPS (Q3×4)₹22.28
- Book Value₹115
- Price to Book2.28x
- Dividend Yield2.63%
- Debt / Equity0.29x
- Return 3M / 1Y / 5Y-15.8% / -5.1% / 21.6%
The Math Doesn’t Add Up (Which Means It Does): Redington just posted its best-ever quarter—₹30,959 crore revenue, +16% YoY, PAT ₹436 crore with 1.41% net margin. Yet the stock is down 15.8% in three months. P/E at 14.5x is a 53% discount to industry median of 31.1x. If you’ve heard of this company, you probably know someone who resells its products. If you haven’t, that’s because distribution isn’t glamorous. But it is profitable.
02 — Introduction
What Does Redington Even Do? (And Why Should You Care?)
Redington Ltd, established 1993, is an IT and mobility distributor. Not sexy. Not a SaaS company. Not solving climate change with AI-powered blockchain widgets. It’s a middleman. It buys iPhones, Dell servers, HP printers, and Samsung phones from manufacturers. Then it sells them to 70,000 retailers and resellers across India, Middle East, Turkey, and Africa.
The magic: no factories, no product risk (manufacturer warranties everything), no customers—only 450+ vendor brands and 70,000 channel partners. Apple alone contributes 30% of its revenue. The other 29 vendors (HP, Lenovo, Dell, Samsung) add another 30%. When these vendors succeed, Redington wins. When they stumble, Redington adjusts. It’s a boring franchise with zero technological moat and everything else you need: scale, cash generation, and market leadership in underpenetrated geographies.
FY25 saw ₹99,334 crore in consolidated revenues, +11% YoY. Nine months of FY26 (till Dec 2025) have already delivered ₹86,950 crore. If Q4 doesn’t completely collapse, full-year FY26 will exceed ₹1,10,000 crore for the first time. Management is investing heavily in cloud solutions, AI commercialization, and data center infrastructure—themes that matter to 2025’s money, but fundamentally, this company prints cash by moving boxes from factories to retailers.
The Q3 concall hinted at something worth noting: working capital days hit 28 days, down from 36 days prior. ROCE momentarily spiked to 22.1%. Arena (Turkey) is finally stabilizing after losing money for years. Meanwhile, every analyst from here to Mumbai has somehow missed that this P/E is trading at 53% discount to peers. Draw your own conclusions.
Concall Excerpt (Feb 2026): “Best quarter to date on both revenue and profit… continuing story of profitable growth across business segments and across geographies.” Management called their working capital tightness a “temporary” benefit from deal timing, cautioning it’ll normalize to 35–40 days. Translation: they’re being conservative.
03 — Business Model: Follow the Margin
How a Distributor Actually Makes Money
Redington operates in five revenue pools: ESG (End-Point Solutions, i.e., PCs, printers—36.6% of revenue), TSG (Technology Solutions, i.e., servers, storage, enterprise IT—30%), MSG (Mobility, i.e., phones—34.3%), CSG (Cloud Solutions—4.1%), and others (Renewable Energy, Logistics—1%). Geography-wise: 50% from SISA (Singapore, India, South Asia), 50% from Rest of World (Middle East, Turkey, Africa dominating).
Gross margins vary: Apple typically ~2-3%, enterprise vendors ~1-2%, cloud solutions higher. Operating margins stay locked at 2.5% because competition is brutal. A 1% swing in channel pricing cascades into a 50% EPS swing. Yet because capital intensity is nil (you don’t own warehouses; you have partners), ROCE stays healthy at 18.9%—higher than most Indian industrial companies.
Working capital is the art. Suppliers give 45–50 day payment terms. Customers (retailers) pay in 30–60 days. That’s a 15–20 day working capital advantage if executed perfectly. Q3 hit 28 days—extraordinary. Management admits this is temporary. The sustainable run-rate sits 35–40 days. Still, tighter WC means less cash tied up and faster cash conversion. For a distributor living on 2% margins, that’s the difference between a dividend and dilution.
Revenue Scale₹30,959 CrQ3 FY26 (Best Ever)
Operating Margin2.03%Stable 2-3% band
Net Margin1.41%Group (ex-Arena: 1.56%)
Why Distribution? Because 450 vendors trust Redington to reach 70,000+ channel partners. That’s 31.5 million possible transaction touchpoints annually. Ingram Micro India (the closest competitor) exists. Others don’t have scale. New entrants face 30 years of relationship debt. It’s not defensible forever. But it’s defensible today.
💬 Do you think data centre infrastructure and AI commercialization can durably improve Redington’s margins, or will it remain a 2% OPM company? Let’s hear it.
04 — Financials Overview
Q3 FY26: The Record Quarters Arrive
Result type: Quarterly Results | Q3 FY26 EPS: ₹5.57 | Annualised EPS (Q3×4): ₹22.28 | Full-year FY25 EPS: ₹20.53
| Metric (₹ Cr) |
Q3 FY26
Dec 2025 |
Q3 FY25
Dec 2024 |
Q2 FY26
Sep 2025 |
YoY % |
QoQ % |
| Revenue | 30,959 | 26,716 | 29,076 | +16.0% | +6.5% |
| Operating Profit | 626 | 602 | 589 | +4.0% | +6.3% |
| OPM % | 2.03% | 2.25% | 2.03% | -22 bps | Flat |
| PAT | 436 | 403 | 350 | +8.2% | +24.6% |
| EPS (₹) | 5.57 | 5.12 | 4.96 | +8.8% | +12.3% |
The Quiet Truth: Revenue growth is front-and-centre (+16% YoY). But PAT growth is modest at +8.2%, revealing the margin compression story. Operating margin slipped from 2.25% to 2.03% due to (a) Arena losses, (b) TSG margin pressure from competition and mix, and (c) receivables provisioning. Exclude Arena, and group net margin would be 1.56%—still thin but more representative of core operations. The real story: QoQ improvement is accelerating. Q3 PAT is 24.6% higher than Q2, driven by revenue momentum and working capital efficiency.
05 — Valuation: Fair Value Range
A 14.5x P/E in a 31x Industry. What Could Go Wrong?
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