Prabhudas Lilladher's research report on Redington (India)
Redington’s revenue growth of 11% YoY was below our and cons estimates (Ple: 15.4%, Cons: 14.3%) due to decline in overseas revenue, -0.4% YoY, while India business grew at strong rate of 30% YoY. Muted performance in overseas was led by decline of 23% YoY in SSA (7% of overseas revenue, due to ongoing shift of vendor business from Singapore to India initiated in 3Q21) and decline in Mobility business (32% of overseas revenue, -12% YoY). Enterprise IT continued to perform well in India (31% YoY) as well as overseas (41% YoY).
Outlook
We continue to value Redington on earnings multiple of 12x on Sep23 EPS of 17.7 to arrive at revised TP of Rs 213 (earlier: 202). Currently, Redington trades at 8.4x/7.9x on FY23/24E EPS of Rs17.2/Rs.18.3 respectively with Revenue CAGR of 14.8% and EPS CAGR of 7.3% over FY22-24E. Maintain BUY.
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