Buy Redington India; target of Rs 140: Firstcall Research

Firstcall Research's report on Redington (india)

"Redington established in 1993 is positioned as the largest Supply Chain Solution Provider in emerging markets. As a group, Redington is present in India, Middle East,Africa, Turkey, Srilanka, Bangladesh and CIS countries. Redington provides end-to-end supply chain solutions for all categories of Information Technology products (PCs, PC building blocks, networking, software and enterprise solution products) and Consumer and Lifestyle products (Telecom, Digital Lifestyle products, Entertainment products and Digital Printing Machines) to over 100 international brands and relationship with major brands have been for years."

"The Company Net sales for the 3rd quarter of FY15 rose by 18.24% to Rs. 84271.80 million from Rs. 71269.10 million, when compared with the prior year period. Net profit increased by 16.61% to Rs. 1010.70 million from Rs. 866.70 million, when compared with the prior year period. Reported earnings per share of the company stood at Rs. 2.53 a share during the quarter, registering 16.54%, increased over previous year period. In Q3 FY15, Profit before interest, depreciation and tax is Rs. 2023.30 million as against Rs. 1880.70 million in the corresponding period of the previous year."

"At the current market price of Rs.123.25, the stock P/E ratio is at 12.71 x FY15E and 11.59 x FY16E respectively. Earning per share (EPS) of the company for the earnings for FY15E and FY16E is seen at Rs. 9.70 and Rs. 10.64 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 15% and 10% over 2013 to 2016E respectively. On the basis of EV/EBITDA, the stock trades at 10.64 x for FY15E and 9.88 x for FY16E. Price to Book Value of the stock is expected to be at 2.04 x and 1.74 x respectively for FY15E and FY16E. We recommend ‘BUY’ in this particular scrip with a target price of Rs.140.00 for Medium to Long term investment", says Firstcall Research Report.

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