I begin by thanking you all our Shareholders for supporting us and standing byus through good times and through challenging times.
I raise a toast to all my extraordinary colleagues who over many years have giventhis great Company of yours the highest possible levels of commitment dedication andunqualified support.
I wish to express my deep gratitude to all our Business Partners Vendors andDealers who continue to bestow their confidence in your Company.
My sincere appreciation for the whole-hearted support that we have received at alltimes from our bankers and our auditors.
My heartfelt thanks to the Members of Redingtons Board whose guidance adviceand support has been invaluable especially during one of the most momentous periods inyour Companys history.
FY21 was unprecedented. An unknown virus originating from deep within China inDecember 2019 had by March 2020 spread across the Globe like a wildfire in the form ofa pandemic aided by a supremely mobile & connected society. All of us are acutelyaware of how this has fundamentally changed our lives. Many sectors of the economyespecially those engaged in Hospitality Travel Tourism Entertainment and a multitude ofSmall & Medium businesses have witnessed closures for long durations leading to lossof livelihood for millions. Rapid vaccination is now the single most important agenda formost National Governments.
The widespread "Engage-from-Home" has required individuals societiesbusinesses & governments to turn to technology in order to evolve a working model andthis placed your Company in an advantageous position.
Demand for IT & Mobility products which help people engage with each otherwitnessed a tremendous surge in demand and your Companys position as a premierdistributor of such products enabled it to fully capitalize on this opportunity.
But this required planning discipline and preparedness. As I had reported last yearwe quickly devised a customized play-book to ensure the highest possible degree of RiskMitigation & Business Preparedness. The principle of 7Cs (Cash Flow Collection CostCustomer Contract Control and Communication) was always an integral part of ourbusiness philosophy but our heightened focus during the last financial year has nowembedded it in our daily & routine decision making.
Across the diverse markets & geographies; with challenges arising out of thepandemic and often stoked by economic circumstances or socio-political turmoilsRedingtonians leveraged the 7Cs to not only overcome challenges but to do that withstyle and panache going on to deliver historic Revenue & Profits. Each & everyconstituent came together to craft this record breaking performance.
The results require no elaboration
Revenue growth of 10.7%
EBITDA growth of 34.3%
PAT growth of 46.8% (PAT growth without one-time tax effect - 64.1%)
A 16.4% ROE
A 19.9% ROCE (Gross); 36.5% ROCE (Net of Cash)
Net Debt : Equity of (0.58) [Negative NDE]
The outstanding results are attributable to Top & Bottom line growths in India aswell as Overseas theaters and through stellar contribution from both IT & Mobilitybusiness verticals. Growth in Mobility business on the back of very strong demand forSmart Phones was higher at 20% as it contributed 35% towards the consolidated Revenue forFY21. In India IT & Mobility delivered Revenue growths of 17% & 36% respectively.Fuelled by the high PC demands Consumer IT in India grew Revenue by 26%.
Since listing your Company has delivered a Revenue CAGR of 14% and PAT CAGR of 15%.Only the very best of organizations have demonstrated such sustained excellence.
While Consumer IT & Mobility verticals flourished demand for Enterprise products& solutions witnessed stagnancy as SMBs and large Corporates deferred Capex andTechnology refresh. However as we entered the second half of FY21 organizations hadstarted re-assessing investments and prioritizing spends on IT assets that wouldaccelerate their Digital Transformation & equip them for the "Workplace of theFuture".
Transition to Cloud has gained a bigger momentum as the benefits of a flexible andon-demand infrastructure became self-evident during the pandemic. In FY21 our Cloudbusiness witnessed a 53% YOY growth reaching Rs. 917 crores. We plan to exponentiallygrow the Revenue from Cloud and Cloud Managed Services business in the next 3 years.
The uncertainties imposed by the pandemic compelled us to temporarily defer someimportant investments during FY21. We did however continue to re-structure our businessand build the skills necessary to address the growing opportunities in EmergingTechnologies like Cloud Data Analytics IoT Artificial Intelligence (AI) MachineLearning (ML) & Cyber Security.
We have restored our investment plans in FY22 and will strengthen our Services andSolutioning capabilities as well as enhance assets essential towards your CompanysDigital Transformation.
In the next two years your Companys business model will be fully transformedwith the "Digital Way" at the front and center of everything that we do andevery decision that your Company takes. Significant investments are planned towardsupgrading our Cloud Management Portal and building an integrated Digital BusinessPlatform.
For your Companys 3PL logistics arm ProConnect Supply Chain Solutions Ltd.(PCS) FY21 was a period of consolidation & regrouping after the challenges of FY20. Iam very happy to report that not only did PCS successfully turn the corner but it alsodid commendably well in addressing the unprecedented situations created by the pandemic.Even during the strictest phases of lock-down PCS Team kept operations going to fulfilldeliveries to sectors deemed critical by the Government. The warehouses were keptoperational with special permissions working under strict COVID guidelines.
I would like to take this opportunity to express my personal gratitude to our very ownfront-line warriors at PCS. By the second half of FY21 PCS was back on its growthtrajectory and it plans to significantly increase its Digital quotient through investmentsin Automation and Digital processes & systems as it aims to become one ofIndias most tech-enabled SCM solution provider.
Despite remaining committed for many years to the Parts & Repair Services businessthat was housed under a wholly-owned subsidiary Ensure Services it was concluded thatthis Line of Business was no longer strategic to your Companys future plans. We tooka decision to divest Ensure and the exercise was completed during July 2020.
One of the most significant decisions taken during the FY21 was to settle the longrunning Gift Tax dispute with the Income Tax department by paying Rs. 70.3 Cr under the"Vivad Se Vishwas" (VSV) scheme. The IT Department had filed an appeal inthe High Court against a decision given in our favour by the IT Appellate Tribunal andunfortunately the Honourable Courts decision went against us. Although we stillbelieve our case to be strong we decided against prolonged litigation at the level of theSupreme Court of India in order to avoid years of uncertainty and significant legalcosts.
During the most critical phases of the lock-down Redington CSR Foundation undertookseveral initiatives to distribute items of daily necessities to the economicallychallenged strata of our society. The Foundation forged partnerships with localauthorities and healthcare facilities to supply Personal Sanitizing Material Masks PPEKits & Oxygen Concentrators. Many Redingtonians volunteered to help the Foundation toextend these humanitarian services in their localities braving personal exposures and Iam filled with a sense of pride at my colleagues demonstration of the true Redingtonspirit.
Long before Environment Social & Governance (ESG) entered the Corporate &Regulatory lexicon we at Redington have actively promoted these good practices. We havetried to minimize our carbon footprint through optimal use of electricity & water atall our facilities while ensuring containment of electronic waste through extendedlife-cycle management and safe disposal of IT assets. Apart from discharging some measureof our dues to the society through our CSR initiatives we ensure social equality atworkplace by promoting gender diversity equal opportunity and meritocracy. Being a BoardManaged & Professionally Run Company a high level of Corporate Governance has alwaysbeen our topmost priority. Your Board of Directors exercise a strong oversight on allmatters related to statutory & business compliance with comprehensive protocolsguidelines & processes in place defining all SOPs.
Effective succession planning is a key to business continuity. With an experienced andskilled Executive Management Team in place your Board of Directors inducted Mr. RajivSrivastava as the Joint Managing Director of the Company. Rajiv brings deep experience ofheading large organizations and spearheading strategic initiatives which have had farreaching impacts. His experience with premier Technology brands like HP & Microsoftwill be invaluable as your Company completes its shift to a Services & Solutionsoriented Organization. Please join me in welcoming Rajiv into the Redington family.
Your support & encouragement dear shareholders are critical to yourCompanys success. The Board & the Management recognize our responsibilitytowards delivering value for your investment in us. For long our dividend distributionpolicy mandated returning 20% of the annual consolidated profits to the shareholders. Inmy last address to you from these pages I had mentioned that the Board continuouslyre-evaluates the dividend policy with the aim of maximizing shareholder returns whileensuring Capital adequacy for business & investments.
In line with this commitment I feel privileged to report that your Board hasrecommended a total Dividend payout of 60% of consolidated profits (40% normal Dividendand a special Dividend payout of 20%) amounting to
Rs. 11.60/- per share. This is the highest-ever dividend payout and my team & I aredelighted that we have been able to express a measure of appreciation of your continuedsupport.
As I scan our horizon I am struck by the range of possibilities that beckons us. YourDirectors and your Managers have worked very hard to bring your Company to a stage whereit is uniquely positioned to take advantage of all the opportunities that lay ahead. Thechallenges of the year gone by have only strengthened our resolve to ensure in perpetuitythe progress of Redington on the path of Profitable Growth.
I once again thank you for your support confidence and guidance.
Vice Chairman and Managing Director