Give it a listen - Analyst meet recording.
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One of the key insights from that recording:
Redington’s cloud platform has been successful in registering more than 11,000 channel partners in less than 6 months and over 6,000 of them are actively transacting over that platform.
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It is a very technical talk. I can understand the direction in which they are moving, but I couldnt understand most terms they use or the concepts they explain, the new business models they talk about… The language is too “tech”. Can any techie who has read the concall transcript and the PPT simplify the business models proposed?
Source: Q2FY23 – INVESTMENT VALUATION UPDATE – Financial Odyssey
The company’s revenues from operations increased to 19050.74 Crs (24.62% YoY and 13.38% QoQ), its operating income increased to ₹495.29 Crs (25.22% YoY and 16.45% QoQ) meaning a 2.6% OPM, its net profits increased to 391.91 Crs (21.3% YoY and 20.09% QoQ) meaning a 2.05% NPM.
Similar to the standalone cash flows, the negative cash flows during H1FY23 were caused by substantial investment in working capital. The company’s ROCE and ROE for the quarter were 35% and 25% respectively and working capital days were 27 days (SISA – 21 days and ROW -32 days).
Revenue from the cloud business in Q2FY23 was ₹506 Crs and from the cloud-managed services was ₹21 Crs.
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Can someone share screen shot of this article as it’s paid or premium content
This company does not have any ideas if their plan is to get into services with “big deal from small, and small from big” plan. They are doing nothing special, this can be replicated, and any other firm who can do the same services for less ? (which they can by hiring people are even lower salaries) those firms will do it. Creating a spiral where redington will find itself in a regular excercise of finding ways to cut cost. Plus, New IT in India ? look around. Everybody opens an IT firm. The company is out of ideas, or just is incapable of thinking big, maybe it does not want to. Overall, lazy management.
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Redington Q4 FY23 Result Update:
- Guidance: The company expects to sustain revenue and margin growth despite geopolitical and financial challenges. The demand for data centre infrastructure products, servers, storage, networking, software, and security, as well as cloud products, has been robust, compensating for the subdued demand related to work from home and learn from home. Strong buying is happening in the BFSI, retail, healthcare, and government segments in India. Inventory across the globe has increased, leading to negative pressure on prices, discounting, and working capital flow.
- 30% revenue comes from Apple. Iphone’s revenue is 24%.
(Apple store opening in India will not impact Redington much: Analysts)
Notes of the Article: “Apple is opening just two stores here, which are insignificant to dent Redington’s fortunes. Apple will have to expand rapidly on-ground in order to make a significant impact. Redington operates on a wafer-thin margin of around 3 per cent, which is a worry. There are better options like DMart, Trent and Vaibhav Global in the listed retailing space than Redington,” said A K Prabhakar, head of research at IDBI Capital. HP Inc, Dell EMC, Lenovo, Samsung and other manufacturers were the other contributors during this period, with a share of 11 per cent, 8 per cent, 6 per cent, 5 per cent and 40 per cent, respectively, of the total revenue, a company presentation said. Redington continues to demonstrate superior execution on the back of strong brand partnerships and diversified geographical expansion.
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Till the global hardware giants migrate their production to india (Dixon could benefit), this will cause a negative impact on Redington’s revenues in Laptops and PC Segment.
Does anyone know what percentage of revenue la are in PCs/Laptops?
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india makes up part of south east Asia’s operations
and in that if I remember correctly IT makes 60 % of revenue roughly I think could not find a source of individual items
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how online sales will affect this company can some one explain this?
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Summary:
Financial Performance:
- Overall revenues grew by 26% YoY.
- Gross profit increased by 17% YoY.
- Revenue and gross profit growth in Singapore, India, and South Asia (SISA) at 24%.
- Rest of the world saw growth of 29% in revenue and 11% in gross profit.
- EBITDA for SISA grew by 19%, while the rest of the world saw a degrowth of 17%.
Digital Transformation:
- Redington’s digital transformation has been a key factor in its growth.
- Transitioning from a traditional distributor to a technology aggregator.
- Focus on providing managed services for private and public cloud security and audits.
Business Dynamics:
- Subdued demand for work-from-home and learn-from-home technology.
- Robust demand for data center infrastructure products and cloud solutions.
Guidance:
- Expecting a constrained demand environment in certain categories.
- Anticipate sustaining reasonable revenue and margin growth through operating improvements and strategic initiatives.
- Investments in technology capabilities, building partner relationships, and expanding offerings expected to pay off in the future.
Strategic Focus:
- Focused on becoming the number one digital distributor in the world.
- Providing comprehensive tech solutions to customers.
Macroeconomic Environment:
- Financial situation across the world continues to be volatile.
- Challenges such as high inflation, increased interest rates, and currency devaluation in certain operating countries. turkey mainly still achieved 2000 crore plus revenue and PAT of 12 crores in turkey
- Redington remains well-positioned to navigate the evolving macroeconomic environment and continue growing profitably.
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Do you see any growth trigger on this business in next 6 months , for past 2.5 years there is no growth in sales but its consistent
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more or less grows proportionally with the indian economy
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As highlighted earlier in this thread, Q1 challenges are due to economical challenges across the geography and still management says they have displayed profitability in countries like Turkey.
Also increase in investments has impacted profits. Increased expenses will continue for next 4-6 quarters. In Q1 FY24 earnings transcript, mgmt has touched upon staying competitive and very clear on what they are doing. This sounds quite optimistic.
On other side, if we see long term, Sales, Profit, Stock price have all increased with not much of deviation. Looks more for long term investment.
Disclosure: I am invested a small % for last 2 years. Considering Technicals on a monthly charts, I am exiting my position.
Independent director resigns & becomes CEO… Any Governance issues in this ?
Disc : Invested.
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Can anyone give current analysis of redington. Why the stock is moving sideways since past 6 months?
What are some future prospects? Is it because the whole IT sector is going through hard times.
Disc: holding 115 shares at Avg buy of ₹136
independence director become CEO any protective behavior’s from government of india and probable slowing of growth in summary
governance issue raised by proxy advisory firm