Redington shares surge 18% after posting record quarterly revenue and profit

Shares of Redington surged as much as 17.8% on Thursday, July 30, after the technology solutions provider reported record quarterly revenue and profit for the June quarter on Wednesday. This marked the biggest stock gain since September last year.

The company's netprofit jumped 76.7% year-on-year to ₹486 crore, marking ithighest-ever quarterly profit.

It reported a 34.6% year-on-year increase in revenue from operations to ₹34,922 crore, while Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) rose 76.9% to ₹708 crore. EBITDA margin expanded to 2.03% from 1.54% a year earlier.

What's driving the rally

Growth was led by the Singapore, India and South Asia (SISA) business, where revenue rose 63% year-on-year. Within the segment, the Mobility Solutions Group grew 88%, Technology Solutions Group expanded 57%, Software Solutions Group increased 42%, while End Point Solutions Group grew 49%.

The company also reported improved capital efficiency, with global working capital days declining to 32 days from 37 days a year ago.

Its higher-margin Software Solutions Group business continued to gain traction, posting 52% global growth, while the Rest of the World (excluding Arena) business reported 16% revenue growth and an 81% increase in profit after tax, supported by cost controls and a favourable base.

Reddington's logistics arm, ProConnect, posted its highest-ever quarterly revenue, up 38% year-on-year.

The company also said its vendor mix continued to diversify, with Apple's contribution to revenue declining to 31% from 34% a year earlier.

Despite the strong earnings, free cash flow remained negative at ₹995 crore, compared with ₹940 crore a year ago, primarily due to higher working capital investments to support growth.



Shares of the company rose as much as 17.8% on Thursday morning, reacting to the results announced on Wednesday night, to an intraday high of ₹338.50. The stock has pared some of its gains and was trading 10.4% higher at ₹317.30 apiece as of 10:45 am. It has advanced about 20% over the last 12 months.

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