Buy Redington India; target of Rs 166: Edelweiss

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26 Aug, 2025 12:21

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Edelweiss' research report on Redington India

Redington India (Redington) reported weaker-than-expected top line— up 4.8% YoY versus 10.5% Street’s estimate—on weakness in India business (down 3.9% YoY). Overseas business reported strong 10.0% YoY growth despite currency depreciation and challenging business environment in Turkey. EBITDA margin fell 12bps YoY as gross margin dipped 29bps due to change in business mix. Management expects performance to improve in FY19 riding increasing traction in India IT business and momentum in overseas business. We maintain positive outlook on the company as: 1) higher commodity prices driving strong demand in MEA region; 2) GST-led bounce back in India business; and 3) strong traction in ProConnect business (up 58% YoY in Q4FY18).

Outlook

Maintain ‘BUY’ with TP of INR166 (10x FY20E EPS).

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