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Redington - Its not just IT

Printed From: The Equity Desk
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Forum Name: Stock Synopsis
Forum Discription: A bried discussion of companies on very specific matters. Normally this is the prelude for further research as always members would be discussing quality companies with good management only
URL: http://www.theequitydesk.com/forum/forum_posts.asp?TID=3259
Printed Date: 21/Apr/2025 at 3:12pm


Topic: Redington - Its not just IT
Posted By: paps3535
Subject: Redington - Its not just IT
Date Posted: 02/May/2011 at 4:46pm
     
        
         Redington (India) Ltd (Redington) is engaged in providing supply chain infrastructure management and management information system solutions. The company offers non-banking financial services and after sales service to its customers through its subsidiaries.The company distributes a range of IT products, such as networking, storage, and enterprise products, as well as servers and software solutions. It also distributes non IT related products, which include digital life style, digital printing, and consumer electronics products. In addition, the company provides infrastructure management, remote service management, facility management outsourcing, and third party logistics services; and repair services for mobile phones, mother boards, and liquid crystal display panels. The company operates and distributes its services across Asia Pacific, the Middle East and Africa. The company through its 29 subsidiaries, distributes products to manufacturers, and provides services to various channel partners in India and worldwide. Redington is headquartered at Chennai in Tamil Nadu, India.
 
 
BSE Code 532805
Book Value (Rs.) 19.37
Market Cap (Rs Mn) 35279.6
CMP 87
 
 
 
Years Mar2010 Mar2009 Mar2008 Mar2007 Mar2006
Debt-EquityRatio 0.52 0.46 0.52 0.57 0.46
Long Term Debt-Equity Ratio 0.52 0.46 0.23 0 0.09
Current Ratio 1.86 2.02 1.62 1.36 1.55
Fixed Assets 105.49 115.46 113.1 102.21 103.2
Inventory 18.54 21.09 19.37 19.96 27.04
Debtors 9.75 11.3 12.05 10.79 12.35
Interest Cover Ratio 5.64 3.77 3.55 2.85 2.99
PBIDTM(%) 3.13 2.87 2.57 2.22 1.92
PBITM(%) 2.89 2.79 2.5 2.14 1.84
PBDTM(%) 2.61 2.13 1.86 1.47 1.31
CPM(%) 1.78 1.41 1.23 0.97 0.87
APATM(%) 1.54 1.33 1.16 0.9 0.79
ROCE(%) 19.04 19.6 17.23 14.24 13.67
RONW(%) 15.42 13.63 12.15 9.4 8.52
 
 
Chairman J. Ramachandran
Managing Director R Srinivasan
 
   Professor J. Ramachandran is a professor of business strategies at the Indian Institute of Management, Bangalore. Professor Ramachandran is the Chairman of our Board and carries rich experience in corporate management, acting as an independent director for several well-known Indian companies, including Reliance Infocomm Limited, Reliance Communication Ventures Limited, Sasken Communication Technologies Limited and Indus League Clothing Limited.
 
 
 
 
   Brokerage houses remain positive on medium to long term growth prospects due to increase share of higher margin non IT business like mobile phones and consumer durables.
Redington India is working closely with Nokia, Blackberry, LG, Whirlpool, Godrej Consumer.
 
 
Source:
http://www.redingtonindia.com - http://www.redingtonindia.com
 
http://www.reportsnreports.com/reports/62826-redington-india-limited-532805-financial-and-strategic-swot.html - http://www.reportsnreports.com/reports/62826-redington-india-limited-532805-financial-and-strategic-swot.html

http://www.monarchproject.com/CorporateInfo/Key-Financial-Ratio/12586/12586 - http://www.monarchproject.com/CorporateInfo/Key-Financial-Ratio/12586/12586

http://www.thehindubusinessline.in/iw/2010/12/26/stories/2010122651800100.htm - http://www.thehindubusinessline.in/iw/2010/12/26/stories/2010122651800100.htm
 
Link to Audited Report:
http://www.monarchproject.com/CorporateInfo/Auditor-Report/12586/12586 - http://www.monarchproject.com/CorporateInfo/Auditor-Report/12586/12586
 
Link to Kotak Research report:
http://www.business-standard.com/content/research_pdf/redington_271010_01.pdf - http://www.business-standard.com/content/research_pdf/redington_271010_01.pdf
 
DNA Money article:
http://www.dnaindia.com/money/report_rising-it-spend-ipad-smartphone-sales-lifting-redington-fortunes_1538418 - http://www.dnaindia.com/money/report_rising-it-spend-ipad-smartphone-sales-lifting-redington-fortunes_1538418
 
 
Registered Office Address SPL Guindy House
95, Mount Road
Guindy
Chennai
Tamil Nadu-600 032
PHONE (044) 4224 3352/ 53
FAX (044) 2235 2790
 
 
 
 
(requesting Moderator to move this thread to Stock Sypnosis section)
 
 
I am not invested in this scrip.but I have just initiated a discussion on this.Expecting support from other members for analysing this scrip.
 


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Everything has good end.if it is not good,then it is not the end.


Replies:
Posted By: paps3535
Date Posted: 02/May/2011 at 8:28pm
expecting inputs from senior members...
 
Basant sir,whats your take on Redington?


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Everything has good end.if it is not good,then it is not the end.

Posted By: basant
Date Posted: 02/May/2011 at 8:32pm
No idea on this really.

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'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in

Posted By: Kautilya
Date Posted: 02/May/2011 at 9:33pm
With a market cap of 3,500+ crores it is quite a big company. Now selling at more than 16 times earnings. Doesn't appear cheap market cap wise. How is this better as compared to other good companies? Where is the moat?

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My indecision is final.

Posted By: Electrodelic
Date Posted: 02/May/2011 at 12:49pm
Redington (India) Ltd has informed BSE that subsequent to signing with Dell India Private Limited (DELL) for their Smart Phone & Tablets distribution, DELL has further appointed the Company as their National Distributor for their commercial products like Laptops, Desktops, Servers, etc.

DELL has recently floated a new business unit called the Global Commercial Channels to devote added focus to its set of SMB channel partners and this new sign-up would enable Dell to meet their objective of having a seamless and highly efficient Supply Chain Solution for its ever growing Commercial Channels business in India.

Source : http://www.bseindia.com/stockinfo/anndet.aspx?newsid=cb78344e-8107-4783-a39e-43a1e52459dc

Posted By: nitin_jagtap
Date Posted: 02/May/2011 at 9:52am
Margins are not very impressive afterall they are only resellers / box pushing ...at the end of the day if you get this really cheap you can consider this I guess

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Warm REgards
Nitin Jagtap

Posted By: anthro
Date Posted: 02/May/2011 at 11:17am
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.

Posted By: rdyn
Date Posted: 03/May/2011 at 1:23pm
I got my Microsoft XBOX 360 India power adapter delivered recently by these guys. Sounded pretty professional. I remember seeing one shop in a business center near my city.

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My aim is to read each and every post on TED!

Posted By: SK1076
Date Posted: 03/May/2011 at 5:53pm
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.


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Patience PAYS/-

Posted By: subu76
Date Posted: 03/May/2011 at 12:07pm
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

Posted By: SK1076
Date Posted: 22/May/2011 at 2:46pm
@ 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


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Patience PAYS/-

Posted By: subu76
Date Posted: 22/May/2011 at 1:23am
Got ot........it's also instructive to know what you posted...i doubt i'd ever read it in any magazine

Posted By: paps3535
Date Posted: 13/Jun/2011 at 7:43pm
http://economictimes.indiatimes.com/pictures/videos/pictures/stocks-8-consistent-performers-to-consider-now/redington/articleshowpics/8833844.cms - http://economictimes.indiatimes.com/pictures/videos/pictures/stocks-8-consistent-performers-to-consider-now/redington/articleshowpics/8833844.cms

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Everything has good end.if it is not good,then it is not the end.

Posted By: rdyn
Date Posted: 13/Jun/2011 at 8:08pm
Originally posted by SK1076

@ 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


Thanks you very much SK1076. Great insights.

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My aim is to read each and every post on TED!

Posted By: rdyn
Date Posted: 16/Jun/2011 at 8:13pm
"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
%20 - http://economictimes.indiatimes.com/tech/software/rim-ingram-partner-for-blackberry-enterprise-solutions-in-india/articleshow/8877672.cms



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My aim is to read each and every post on TED!

Posted By: paps3535
Date Posted: 23/Jun/2011 at 12:30pm
 Blackstone and Standard Chartered Private Equity are vying to acquire a large chunk of the promoter stake in Redington India Ltd, one of the country's oldest and leading distribution firm of telecom and IT products. Singapore based NRI conglomerate Kewalram Chanrai Group is set to dilute just under 15% stake to one private equity investor for roughly Rs 500 crore..
 
 
http://timesofindia.indiatimes.com/business/india-business/StanChart-Blackstone-in-fray-for-Rs-500cr-Redington-stake/articleshow/8956671.cms - http://timesofindia.indiatimes.com/business/india-business/StanChart-Blackstone-in-fray-for-Rs-500cr-Redington-stake/articleshow/8956671.cms


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Everything has good end.if it is not good,then it is not the end.

Posted By: commnman
Date Posted: 05/Aug/2011 at 6:39pm
Q1/Fy-12 results out...

Total Income up 47.4% to 5202.35 Cr from 3528.69 Cr.
EBIDTA up 50.4% to 138.18 Cr from 91.89 Cr.
Net Profit up 28.9% to 61.59 Cr from 47.77 Cr.

EBIDTA margin is 2.7% V/s 2.6% (JQ-10) and 2.9% (MQ-11)
NET Pr margin is 1.2% V/s 1.4% (JQ-10) and 1.4% (MQ-11)

Cost of Goods Sold as a %ge to Income is 94.6% V/s 94.5% (JQ-10) and 94.4% (MQ-11)
Employee plus Other expenses to sales is stable below 3%.

Tax Rate is 26% V/s 24.5% (JQ-10) and 25.9% (MQ-11)

Of concern is Interest expense thats up 98.9% to 33.29 Cr from 16.74 Cr in absolute terms.
Significance of which is that Interest expense now eats up to 25.4% of EBIT v/s 19.3% (JQ-10) and 22.4% (MQ-11)

Also note that Promoter holding has considerably reduced to 21% from 29% Quarter ago and from 43% year ago.
I am not sure if this is because of allotment of employee stock options and preferential allotment to Regington Investments Pvt Ltd, a subsidiary of the company.

A look at the segments:
INDIA sales up 38.6%, PBIT up 42.6% with a margin of 3.3%
Oversease sales and PBIT up 57% with a margin of 1.8%
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main toh aam aadmi hun... jo sunta hoon wohi sach maanta hoon


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