Redington Ltd, a company that distributes products of Apple in India reported a 26% jump in its profit for the September quarter (Q2FY23). As a result, its share price has climbed 16% in the past two days. Redington’s shares were trading at ₹ 157.25 apiece, up 6.39%, at 12:39 PM on Thursday.
Redington is a leading distributor of products and integrated supply chain solution provider in the field of technology and communications in India as well as across the globe. It is the second-largest distributor of IT products in India and a premier distributor of products for more than 200 global technology vendors. However, Apple contributes about 27% to its revenue.
The company’s net profit surged 26% to ₹ 387 crores from ₹ 307 crores in September 2021. This happened on the back of a 25% increase in revenue to ₹ 19,050 crores in the latest quarters against ₹ 15,287 crores in September 2021. Its EBITDA stood at ₹ 562 crores, up 22% from ₹ 457 crores.
India’s distribution business continued to post double-digit growth, the company said. It benefitted even during the pandemic, as it sells everything from smartphones to personal computers and software to consumers and businesses across 38 countries. This led to a spike in demand with many employees working from home.
Redington is a mid-cap company with a market capitalization of ₹ 11,558 crores. It has a good return on equity of 23.88% and an ideal debt-to-equity ratio of 0.14. Its shares are trading at a price-to-equity (PE) ratio of 8.51, which is significantly lower than the industry PE. Therefore, the stock might be undervalued. Further, it has a good dividend yield of 4.46%.
Written by Simran Bafna
