SENSEX NIFTY
Feb 05, 2013, 03.28 PM IST | Source: Moneycontrol.com

Buy Redington (India); target of Rs 102: Motilal Oswal

Motilal Oswal is bullish on Redington (India) and has recommended buy rating on the stock with a target of Rs 102 in its February 2, 2013 research report.

Motilal Oswal is bullish on Redington (India) and has recommended buy rating on the stock with a target of Rs 102 in its February 2, 2013 research report.
 
“REDI's 3QFY13 results were marginally below expectations, with revenue up 11% YoY at INR61.2b (v/s our estimate of INR63.5b), EBITDA up 14% YoY at INR1.7b (v/s our estimate of INR1.8b) and net profit up 21% YoY at INR819m (v/s our estimate of INR824m). Domestic revenue grew 15% YoY and 6% QoQ to INR28.2b, while international revenue was up 8% YoY and 2% QoQ at INR33.1b. Domestic revenue was boosted by strong growth in the non-IT segment, primarily due to Apple iPhone launch.”
 
“The management moderated growth expectations and noted that consumer demand outlook remains weak; the anticipated recovery is not yet visible. Nonetheless, the management was optimistic of de-freezing of government project demand. It guided for IT growth rate of ~10% for the domestic and international markets. It even lowered its Apple iPhone guidance for FY13 from INR11b to INR8b. In 3QFY13, REDI generated FCF of ~INR2.7b (~INR2.3b for 9MFY13), primarily due to lower working capital requirements, on favorable working capital terms in case of Apple iPhone sales. REDI's net debt-equity stood at ~1x.”
 
“REDI is the leading IT SCM player in India and the Middle East and is a strategic partner to the world's leading technology companies. We expect REDI to post revenue CAGR of 17% and net profit CAGR of ~20% over FY12-15. Implementation of GST would unveil and increase new opportunities for the company, particularly in the non-IT vertical. We are revising our revenue estimates by -1.3%/-2.4%/-2.2% for FY13/FY14/FY15 and PAT estimates by -3.3%/-1.4%/-0.9% for FY13/FY14/FY15. REDI trades at 7.6x/ 6.3x its FY14/FY15E earnings and EV of 6.5x/5.7x FY14/FY15E EBITDA. We maintain Buy with a target price of INR102 (based on intrinsic P/E of 8x FY15E) - an upside of ~17%,” says Motilal Oswal research report.

FIIs holding more than 30% in Indian cos Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

To read the full report click here

Set email alert for

ADS BY GOOGLE

video of the day

Market in fine fettle; 2014-end Sensex target at 26300:Citi

Explore Moneycontrol

Copyright © e-Eighteen.com Ltd. All rights reserved. Reproduction of news articles, photos, videos or any other content in whole or in part in any form or medium without express written permission of moneycontrol.com is prohibited.