REDINGTON IND FUNDAMENTAL REPORT

-Omkar Amin
Established in the year 1993, Redington India Limited has evolved from the very
humble beginnings of one brand, one product category into a major player in
distribution and supply chain solutions with 235+ International brands in IT and
Mobility spaces serving 37 emerging markets. Me, as an Investor, I always look at
these main aspects of the company. The main aspects are as follows-
● Company’s Introduction/ Demand growth of the Company-
1. Redington Ind is mainly engaged in the business of Wholesale of
machinery, equipment, and supplies. The company’s Total Operating Revenue
is Rs. 22720.67 Cr. and Equity Capital is Rs. 77.84 Cr.
2. The overall Demand for Redington Industries has been expected to grow
significantly. The company has been successful to cater to its demand while
maintaining a significant lean balance sheet. This can be seen as the demand
for premium products has also been growing very rapidly in India.
3. Because of the growth in the IT sector, the Cloud segment continues to grow
rapidly. An annuity business is more attractive. Currently, the managed
service forms a meager position i.e. 3-3.5%. Whereas, reselling is the
dominant part of the business.
4. The working capital is likely to increase in 25-28 days.

● The main Financial Statements ( Cash Flow)-

1. As I have read the infamous book of Peter Lynch- One Up on Wall Street,
Cash flow is also one of the main growth drivers for a company.
2.
Year to March FY21 FY22 FY23E

Reported Profit 7,576 12,701 12610

Free Cash Flow 34,489 449 4,020

3. The Cash Flow in the business plays an important role as it permits the
company to undertake new possibilities.
● The Key Financials (RoE Growth)-
1. The RoE ( Return on Equity) growth plays an important role when I am
Investing as it resembles how much the company is giving back to its
shareholders. their Growth of the Redington Ind is given below.
2.
Roe(%) FY21 FY22 FY23E

16.4 23.9 20.8

3. As it is seen in the above table, the RoE growth of Redington has been
growing significantly.

● The Shareholding Pattern of Redington -

The Shareholding pattern of the company resembles the growth of the
company. And for me, the more the Foreign Institutional Investments the more
the Organization has the capability to grow dynamically.

● Peer Comparison of Redington Ind-

1. Amongst the other Organizations in the Technological Hardware field,
Redington is surely in the lead and The same can be seen in the data of the
Peer's comparison as well.
 2. Below is the data of the main Companies which are the peers of Redington,
Optimeaous Infracon, and Cerebra Integrated Technologies.

3. As seen in the above graph Redington and Optimeaous Infracon had a good
competition but Redington proved to be the one on the top.

SWOT ANALYSIS OF REDINGTON

STRENGTHS
● Company has reduced its Debt
● Company is almost Debt Free
● Company has been maintaining a
healthy Dividend payout of about
35.68%
● The 3 Year CAGR is 47
● The 4 Year CAGR is 22
● Great Market Leadership
● Strong Brand recognition
● Largest distribution channel in India
WEAKNESS
● The company has delivered a poor
sales growth of 9.95% over the past
five years.
● The 3 Year ROE was below 18
● The 5 Year ROE is below 18
● Easily Imitable Business Model
● Declining market share Declining
per unit revenue
 OPPORTUNITY
● Accelerated technological
innovations and advances
● Local collaboration
● Trend of customers migrating to
higher-end products
● Customer preferences are fast
changing
PORTERS FIVE FORCES ANALYSIS
Bargaining power of
customers
Bargaining power of
suppliers
Threats of new entrants
Threats of close substitutes
THREATS
● Amid War conditions can be a threat
to the whole market
● Competetive pressure
● Trade relations between US and
China
● Competitors catching up with the
product development
High As there are a lot of producers in
the computer peripheral industry
the bargaining power of customers
is relatively high which tends to
take the price down
Moderate The threat from the the increasing
bargaining power of suppliers is not
that much as the Redington Ind as
the suppliers have been the really
old and they have a good relation
with the company as well
High In the industry of IT and computer
peripherals, there are chances of the
new entrants with their established
brands like FIn.Tech, etc.
Moderate ● Available competitors have
performance limitations
● As the brand loyalty of
Redington Ind. is way better
than the other companies,
the substitutes can be done
but cannot be completely
replaced
Rivalry among current High ● Three main competitors are
players Celebra Integ B rating, TVS
Electronics A rating,
SPARC Electrex A+ rating.
● Out of which CELEBRA
has a greater market cap
than Redington