Redington sinks 6% amid weak June quarter results

Redington reported a 21.2 per cent year-on-year decline in consolidated net profit at Rs 248.8 crore in Q1FY24. Ebitda margin fell 100bps YoY to 2 per cent

Shares of technology solutions provider Redington tumbled 6.3 per cent to Rs 171.45 per share on the BSE in Wednesday's intra-day trade after the company posted a weak set of number for the April-June quarter (Q1) of financial year 2023-24 (FY24).

At 10:45 AM, the stock was quoting 5.9 per cent lower at Rs 172.3 apiece as against 0.77 per cent fall in the benchmark S&P BSE Sensex. 

On Tuesday, Redington reported a 21.2 per cent year-on-year decline in consolidated net profit at Rs 248.8 crore in Q1FY24 as against a net profit of Rs 315.8 crore in Q1FY23. Sequentially, too, the profit fell from Rs 310.10 crore seen in Q4FY23.

Moreover, Ebitda (earnings before interest, tax, depreciation, and amortisation) falls 9.2 per cent to Rs 419.2 crore relative to Rs 461.8 crore in the corresponding period in the previous fiscal.

Ebitda margin fell 100bps YoY to 2 per cent in the quarter under study as compared to 3 per cent seen in the corresponding period of the previous fiscal.  That said, total revenue stood at Rs 21,187.2 crore, up 26.1 per cent YoY from Rs 16,803.1 crore reported in Q1FY23.

"At Rs 21,251 crore, overall global revenue for the quarter has been the highest ever for any Q1, growing by a strong 26 per cent YoY. Further, at Rs 1,248 crore, it has registered the highest-ever Q1 gross profit with a 17 per cent YoY improvement. However, the PAT is down 21 per cent YoY due to a significant increase in interest and factoring charges. Both these have been driven by the ongoing situation of the global financial markets, and should start to normalise in the second half of the year. The Cloud business – an area of strong focus

for the organisation - has achieved the highest quarterly revenue of Rs 674 crore, with a 44 per cent YoY growth," the company said in its statement.

Redington Limited, an integrated technology solutions provider and a Fortune 500 company, enables businesses in their digital transformation journeys by addressing technology friction – the gap between innovation and adoption. With presence across 38 markets through 60 subsidiary offices, over 300 brand associations, and 43,000 channel partners, Redington enables seamless and end-to-end distribution for all categories of IT/ITeS, Telecom, Lifestyle, and Solar products in India, Singapore, South Asia, Middle-East, Africa and Turkey.  

Redington's return on equity also slipped to 14.4 per cent in Q1FY24 from 21.3 per cent YoY, while return on capital employed declined from 41.1 per cent last year to 19.4 per cent.