Please refer to important disclosures at the end of this report
1
Redington (India) Limited (Redil) is a supply chain solutions provider worldwide to
leading manufacturers of information technology, telecom, lifestyle and
consumer electronics products. Redil will continue to register revenue growth and
maintain its operating profitability, over the near to medium term, leading to
steady improvement in its cash generation. Redil is taking initiatives to expand its
product offerings and customer base in the non-IT space, which along with the
healthy demand for Apple products, and a continued recovery in IT spending in
the domestic market, should help sustain and register annual revenue growth
over the medium term. Steady cash generation, limited capital spend and
prudent working capital management has led to Redil's gearing improvement.
Redil’s financial performance continues to be healthy characterized by stable
accruals and profitability with higher revenue share from the non-IT segment as
well as sluggish pick up in the domestic higher margin IT business segment.
Management expects modest recovery in the Indian market and believes Q3 did
not see any major channel filling as H1FY17 IT growth rates were higher than
that for the quarter.
W
orking capital (WC) position continued to improve with WC
days down to 43 (Q3FY16: 60). The company has been maintaining a health
y
dividend payout of 17.05% (Div. Yield: 1.84%). The company has reported a
healthy profit growth of 14% CAGR and RoE of 18% for the last 5 years. Hence
Buy.
BUY
CMP `126
Stock Info
Sector
Beta
Bloomberg Code
Shareholding Pattern (%)
Promoters 8.2
MF / Banks / Indian Fls 24.3
FII / NRIs / OCBs 65.4
Indian Public / Others 2.2
Abs. (%) 3m 1yr 3yr
Sensex 7.4 13.6 28.2
Redington India 13.4 0.8 41.9
.
0.5
Reuters Code REDI.BO
REDI@IN
2
BSE Sensex 29,656
Nifty 9,218
Face Value (
`
)
IT (Hardware)
Market Cap (
`
cr) 5,054
52 Week High / Low 129/80
Avg. Daily Volume 4,12,678
Vaibhav Agrawal
022 – 3935 7800 Ext: 6808
Redington India
Others | IT (Hardware)
April 25, 2017
Redington India | IT (Hardware)
A
pril 25, 2017
2
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com
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Disclosure of Interest Statement Redington India
1. Financial interest of research analyst or Angel or his Associate or his relative No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives No
3. Served as an officer, director or employee of the company covered under Research No
4. Broking relationship with company covered under Research No
Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
over 12 months investment
p
eriod
)
: Reduce
(
-5% to -15%
)
Sell
< -15
)