REDINGTON - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 4.4

📊 Core Financials Analysis

Profitability

ROE: 35.0% and ROCE: 32.6% — exceptional, signaling strong capital efficiency and operational performance.

EPS: ₹19.0 — solid earnings per share, with consistent quarterly PAT (₹200 Cr vs ₹209 Cr).

Quarterly Profit Variation: +28.6% YoY — healthy growth trajectory.

Balance Sheet & Cash Flow

Debt-to-equity: 0.31 — low leverage, indicating prudent financial management.

Dividend Yield: 2.36% — attractive for income-focused investors.

Strong cash flows supported by robust distribution margins and working capital discipline.

📉 Valuation Indicators

Metric Value Interpretation

P/E Ratio 15.1 Undervalued vs industry PE of 37.4

P/B Ratio ~4.91 Slightly elevated, but justified by high ROE

PEG Ratio 0.97 Fairly valued relative to growth

Intrinsic Value ₹270–₹285 (est.) Current price slightly above fair value

🧠 Business Model & Competitive Edge

Company Profile: Redington Ltd is a leading IT and mobility distribution company, serving over 30 emerging markets with a wide portfolio of global brands.

Strengths

Deep distribution network and vendor relationships across Apple, HP, Dell, and Microsoft.

Strong presence in cloud, cybersecurity, and enterprise solutions.

Efficient working capital cycle and asset-light model.

Challenges

Margin pressure in hardware distribution.

DII holding declined, possibly due to profit booking or sector rotation.

According to Stocks-Buy’s Redington analysis, the stock is rated as “Reasonably Priced” with a valuation grade of Bronze. Price targets for 2025 range from ₹166 to ₹262, while 2027 targets stretch to ₹383.5

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📈 Technical & Sentiment Overview

RSI: 69.5 — nearing overbought zone, short-term caution advised.

MACD: 5.17 — bullish momentum, trend continuation likely.

DMA 50 & 200: Price above both — confirms strong uptrend.

Volume: Below weekly average — cooling investor interest.

💡 Entry Zone & Long-Term Guidance

Suggested Entry Range: ₹270–₹285 — near intrinsic value and DMA 50.

Holding Strategy

Ideal for long-term investors seeking exposure to tech distribution and digital transformation.

Price targets for FY27 range from ₹360 to ₹385; long-term targets for FY30 could reach ₹500+.

Monitor vendor mix, margin trends, and expansion into value-added services.

Redington is a high-quality compounder with strong fundamentals and attractive valuation. If you're building a portfolio of durable tech enablers, this one deserves a top-tier spot. Let me know if you'd like to compare it with Ingram Micro or Savex Technologies next.

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