Hold Redington India; target of Rs 89: Nirmal Bang
Brokerage house Nirmal Bang has recommended hold rating on Redington India with a price target of Rs 89, in its May 28, 2013 research report.
June 04, 2013 / 16:08 IST
Nirmal Bang's research report Redington India
"Redington India, India business posted a robust growth of 22 percent YoY/4.6 percent QoQ with Apple’s business growing by 300 percent YoY during the quarter. In addition, company also booked revenues of ~ Rs.200 crore from the UIDAI project. Blackberry sales went down by almost 40 percent YoY for lack of sales. Management has given a cloudy outlook for the India business for FY14 citing reason to a sharp slowdown in overall business environment.""Overseas sales saw good growth of 24.4 percent YoY/16.8 percent QoQ on the back of good sales of Lenova in the Middle East and Africa which grew by 42 percent YoY. Arena continued to do well during the quarter and for FY13 sales and PAT of this business has grown by 3 percent and 47 percent respectively. Samsung is continued to gain steam in its African operations and the company expects this business to get into good shape in 12-18 months timeframe. Overall, company expects good growth in the overseas business in the next 3-5 years.""Valuation & Recommendation: Redington enjoys leadership position in the products it deals and is strategically growing its business in infant markets like Africa and Turkey. Though outlook remains gloomy for the India business (which contributes 45 percent to revenues), Redington has been able to grow market share by taking pressure on margins. At CMP, the stock is trading at a P/E of 8.5x and 7.3x of its FY14E and FY15E earnings respectively. We recommend to HOLD the stock and can accumulate further when the economy revives which would directly benefit Redington," says Nirmal Bang research report.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. 
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