REDINGTON - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.0
| Stock Code | REDINGTON | Market Cap | 17,255 Cr. | Current Price | 221 ₹ | High / Low | 335 ₹ |
| Stock P/E | 13.9 | Book Value | 67.8 ₹ | Dividend Yield | 3.09 % | ROCE | 26.4 % |
| ROE | 25.2 % | Face Value | 2.00 ₹ | DMA 50 | 226 ₹ | DMA 200 | 246 ₹ |
| Chg in FII Hold | -0.45 % | Chg in DII Hold | -0.16 % | PAT Qtr | 289 Cr. | PAT Prev Qtr | 223 Cr. |
| RSI | 50.6 | MACD | -0.54 | Volume | 21,94,116 | Avg Vol 1Wk | 36,19,416 |
| Low price | 191 ₹ | High price | 335 ₹ | PEG Ratio | 2.69 | Debt to equity | 0.28 |
| 52w Index | 20.4 % | Qtr Profit Var | 37.8 % | EPS | 15.9 ₹ | Industry PE | 26.2 |
📊 Financial Overview: Redington Ltd shows strong fundamentals with quarterly PAT rising from ₹223 Cr. to ₹289 Cr. (37.8% growth). ROE at 25.2% and ROCE at 26.4% highlight excellent capital efficiency. Debt-to-equity ratio of 0.28 indicates low leverage, ensuring financial safety. EPS of ₹15.9 is healthy, supported by consistent profitability and strong cash flows.
💰 Valuation Indicators: Current P/E of 13.9 is well below the industry average of 26.2, suggesting undervaluation. P/B ratio of ~3.26 (₹221 / ₹67.8) reflects fair pricing. PEG ratio of 2.69 indicates growth is priced in at slightly stretched levels. Intrinsic value appears higher than current market price, offering margin of safety for investors.
🏢 Business Model & Competitive Advantage: Redington operates in IT distribution and supply chain solutions, with strong presence in hardware, software, and cloud services. Its competitive advantage lies in scale, diversified product portfolio, and global partnerships. Low debt and strong profitability strengthen resilience, though valuations remain sensitive to global IT demand cycles.
📈 Entry Zone & Holding Guidance: Attractive entry zone lies between ₹200–₹210 (near support levels and below DMA 200). Long-term investors may hold for undervaluation benefits, dividend yield, and strong fundamentals. Fresh entry is favorable at current levels for value-focused portfolios.
Positive
- 🌟 Strong [ROCE](ca://s?q=Explain_ROCE) at 26.4% and [ROE](ca://s?q=Explain_ROE) at 25.2%
- 📈 Quarterly PAT growth of 37.8%
- 💡 Diversified IT distribution and supply chain solutions
- 🛡️ Low [debt-to-equity](ca://s?q=Debt_to_equity_ratio_explained) ratio of 0.28
- 💰 Dividend yield of 3.09% adds investor appeal
Limitation
- ⚠️ [PEG ratio](ca://s?q=Explain_PEG_ratio) of 2.69 indicates growth priced at stretched levels
- 📉 Decline in trading volumes compared to weekly average
- 🔎 Sensitivity to global IT demand cycles
Company Negative News
- 📉 Decline in FII holdings (-0.45%)
- ⚠️ Decline in DII holdings (-0.16%)
Company Positive News
- 📈 Strong quarterly earnings momentum
- 💡 Expansion in IT distribution and cloud services
Industry
💻 The IT distribution and services industry trades at an average P/E of 26.2. Redington’s P/E of 13.9 highlights undervaluation. Industry growth is supported by rising digital adoption, cloud services, and hardware demand, but profitability remains sensitive to global IT cycles and supply chain dynamics.
Conclusion
✅ Redington Ltd offers undervaluation, strong return metrics, and consistent profitability, making it attractive for long-term investors. Entry around ₹200–₹210 provides a favorable risk-reward balance. Long-term holding is suitable for value investors seeking exposure to IT distribution and digital infrastructure growth.
Would you like me to extend this with a peer comparison or a IT distribution outlook to deepen the perspective?