I am from this industry. The margins are very thin & RIL doesnt have any pricing power. With HP business out of its kitty & vendor opting for Regional distributor instead of NDs, future of this IT distributor looks not so bright.

Originally posted by anthro my perception is that this company is a "glorified dealer " with limited pricing power which will anyday be lesser than that of the ip holder.They do not "create" anything new and business is low moat.

@ Subu - I am in IT Hardware/PC industry & in distribution only. The problem here is not capital but thin margins & bad debts. Other challenges are
- Vendor focus on LFR directly
- Regional distribution getting more succes as compared to National distribution model
- Increasing trend of Online direct customer purchases to havean impact on Retail / Distribution channel

However, Let me tell you RIL is second biggest Distribution co. after Ingram Micro & is a very professionally driven org.

Originally posted by subu76 SK 1076 what is the industry you're associated with?   I think this company will require a lot more woking capital for it's growth

http://economictimes.indiatimes.com/pictures/videos/pictures/stocks-8-consistent-performers-to-consider-now/redington/articleshowpics/8833844.cms

"The low current penetration of BlackBerry handsets in India, recent sign-ups with other tablet and Smartphone OEMs will ensure that the growth momentum in non-IT products remains strong," says Ankur Rudra, analyst at Ambit Capital. Further, the management's plan to focus on non-risky , profitable deals and the increasing push towards the value segment should help it sail through the choppy business environment comfortably.

In other words, while the rising inflation and interest rates may impact the overall business sentiment, its impact on Redington will be minimal because of its focus on high-value products (Redington contributes around 90% of BlackBerry sales in India). Further, it is still quoting at a comfortable PE of 14.18 and this explains why all the eight analysts who track Redington have given it a buy recommendation.

This is from the above article link posted by paps.

This is from today's Economic Times. Ingram and Redington are the big players in the distribution business and look like competitors to me.

RIM, Ingram partner for BlackBerry Enterprise soutions in India
http://economictimes.indiatimes.com/tech/software/rim-ingram-partner-for-blackberry-enterprise-solutions-in-india/articleshow/8877672.cms



Edited by rdyn - 16/Jun/2011 at 8:13pm