⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
REDINGTON - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.1
| Stock Code | REDINGTON | Market Cap | 20,811 Cr. | Current Price | 266 ₹ | High / Low | 335 ₹ |
| Stock P/E | 14.8 | Book Value | 61.3 ₹ | Dividend Yield | 2.55 % | ROCE | 32.6 % |
| ROE | 35.0 % | Face Value | 2.00 ₹ | DMA 50 | 271 ₹ | DMA 200 | 264 ₹ |
| Chg in FII Hold | 0.13 % | Chg in DII Hold | 0.31 % | PAT Qtr | 532 Cr. | PAT Prev Qtr | 200 Cr. |
| RSI | 48.8 | MACD | -3.40 | Volume | 7,14,083 | Avg Vol 1Wk | 15,52,275 |
| Low price | 177 ₹ | High price | 335 ₹ | PEG Ratio | 0.96 | Debt to equity | 0.30 |
| 52w Index | 56.7 % | Qtr Profit Var | -14.0 % | EPS | 17.9 ₹ | Industry PE | 32.3 |
📊 Core Financials
- Revenue & Profitability: Quarterly PAT at ₹532 Cr, up significantly from ₹200 Cr, though YoY profit variation shows -14%. EPS at ₹17.9 indicates strong earnings power.
- Margins: ROE at 35.0% and ROCE at 32.6% reflect excellent efficiency and profitability.
- Debt Ratios: Debt-to-equity at 0.30 shows low leverage, enhancing financial stability.
- Cash Flows: Strong operating cash flows implied by consistent profitability and low debt levels.
💹 Valuation Indicators
- P/E Ratio: 14.8, well below industry average of 32.3, suggesting undervaluation.
- P/B Ratio: Current price ₹266 vs. book value ₹61.3 → ~4.3x, moderately expensive relative to assets.
- PEG Ratio: 0.96, attractive, showing balanced growth-adjusted valuation.
- Intrinsic Value: Appears undervalued compared to fundamentals, offering margin of safety.
🏢 Business Model & Competitive Advantage
- Redington operates in IT product distribution, logistics, and services, with a strong presence across emerging markets.
- Competitive advantage lies in wide distribution network, diversified product portfolio, and partnerships with global tech brands.
- Business model benefits from rising IT demand and digital transformation trends.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive accumulation range between ₹250 – ₹265, near DMA200 and support levels.
- Long-Term Holding: Strong fundamentals, high ROE/ROCE, and undervaluation make it suitable for long-term investors. Best to accumulate gradually on dips.
✅ Positive
- Strong ROE (35%) and ROCE (32.6%).
- Low debt-to-equity ratio (0.30) ensures financial resilience.
- Dividend yield of 2.55% provides steady income.
⚠️ Limitation
- Quarterly profit variation of -14% highlights earnings volatility.
- P/B ratio of ~4.3x indicates moderate valuation premium.
- Stock trading below DMA50 suggests weak short-term momentum.
📉 Company Negative News
- Profit variation of -14% YoY raises concerns about earnings consistency.
- Stock trading below DMA50 indicates near-term weakness.
📈 Company Positive News
- Quarterly PAT surged from ₹200 Cr to ₹532 Cr sequentially.
- FII holding increased (+0.13%) and DII holding increased (+0.31%), showing institutional confidence.
- Strong 52-week performance with 56.7% gain.
🏭 Industry
- IT distribution and services sector trades at industry PE of 32.3, much higher than Redington’s 14.8, showing undervaluation.
- Sector growth supported by digital transformation, cloud adoption, and IT infrastructure demand.
🔎 Conclusion
- Redington is financially strong with excellent return ratios, low debt, and attractive dividend yield.
- Valuation is compelling compared to industry peers, though earnings volatility is a concern.
- Best suited for long-term investors, with entry around ₹250 – ₹265 offering a good margin of safety.
I can also prepare a comparative HTML snapshot of Redington versus Ingram Micro or Savex Technologies to highlight valuation and profitability differences in the IT distribution sector.