⚠ 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: 3.5
| Stock Code | REDINGTON | Market Cap | 18,094 Cr. | Current Price | 231 ₹ | High / Low | 335 ₹ |
| Stock P/E | 15.5 | Book Value | 61.3 ₹ | Dividend Yield | 2.94 % | ROCE | 32.6 % |
| ROE | 35.0 % | Face Value | 2.00 ₹ | DMA 50 | 256 ₹ | DMA 200 | 261 ₹ |
| Chg in FII Hold | 0.13 % | Chg in DII Hold | 0.31 % | PAT Qtr | 223 Cr. | PAT Prev Qtr | 532 Cr. |
| RSI | 40.9 | MACD | -7.70 | Volume | 37,42,929 | Avg Vol 1Wk | 51,56,777 |
| Low price | 177 ₹ | High price | 335 ₹ | PEG Ratio | 1.00 | Debt to equity | 0.30 |
| 52w Index | 34.4 % | Qtr Profit Var | -51.5 % | EPS | 14.9 ₹ | Industry PE | 29.9 |
📊 Core Financials
- Revenue Growth: Quarterly PAT declined from ₹532 Cr to ₹223 Cr (-51.5%), showing short-term weakness.
- Profit Margins: Margins remain healthy, supported by IT distribution and services.
- Debt Ratios: Debt-to-equity at 0.30 → low leverage, financially stable.
- Cash Flows: Strong operating cash flows due to recurring distribution revenues.
- Return Metrics: ROCE at 32.6% and ROE at 35.0% → excellent efficiency.
💹 Valuation Indicators
- P/E Ratio: 15.5 vs Industry PE of 29.9 → undervalued.
- P/B Ratio: ~3.77 (Price ₹231 / Book Value ₹61.3) → moderate premium.
- PEG Ratio: 1.00 → fair, suggesting balanced growth valuation.
- Intrinsic Value: Current price below fair value, offering upside potential.
🏢 Business Model & Competitive Advantage
- Redington operates in IT distribution, cloud services, and digital transformation solutions.
- Competitive advantage lies in scale, global partnerships, and diversified product portfolio.
- Strong return ratios and low leverage strengthen overall health.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive accumulation range between ₹220 – ₹230 (near support levels).
- Long-Term Holding: Suitable for investors seeking undervalued exposure to IT distribution with strong fundamentals and dividend yield (2.94%).
✅ Positive
- Undervalued on P/E basis (15.5 vs industry 29.9).
- Strong ROCE (32.6%) and ROE (35%).
- Dividend yield of 2.94% provides income support.
- FIIs (+0.13%) and DIIs (+0.31%) increased holdings.
⚠️ Limitation
- Quarterly PAT declined sharply (-51.5%).
- P/B ratio (~3.77) indicates premium valuation.
- Stock trading below DMA50 and DMA200, showing weak momentum.
📉 Company Negative News
- Quarterly profit decline (-51.5%).
- Weak technical indicators (RSI 40.9, MACD -7.70).
- Stock trading well below 52-week high (₹335 → ₹231).
📈 Company Positive News
- FIIs and DIIs increased holdings.
- Strong dividend yield supports investor confidence.
- Excellent return ratios (ROCE, ROE) highlight efficiency.
🏭 Industry
- IT distribution and digital services sector growing with cloud adoption and digital transformation.
- Industry PE at 29.9, showing Redington trades at a discount.
🔎 Conclusion
Redington offers strong fundamentals with excellent return ratios and undervaluation on P/E basis. Despite short-term profit decline and weak momentum, its dividend yield and efficiency make it attractive for long-term investors. Accumulation near support levels provides a good entry point for exposure to IT distribution and digital transformation growth.