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Established in the year 1993, Redington India Limited provides end-to-end supply chain solutions for all categories of Information Technology, Telecom, Lifestyle, Healthcare, and Solar products. The company has been established from a single product distributor to a US $7.7 billion distribution and supply chain solutions provider to over 245+ international brands in IT and Mobility spaces, serving 37 emerging markets.

Investment Rationale:

1. Redington is one of the leading distributors of technology having long-standing relationships with leading IT vendors world-wide. Some of the reputed brand partners are Apple, Nokia, Amazon web services, SYSTIMAX SOLUTIONS, HITACHI, Red Hat, SanDisk, McAfee SECURE, Western Digital, Microsoft, HUAWEI, FORTINET, ASUS, AVAYA, AUTODESK, Acer, Canon, etc.

2. Indian markets for smart phone has significantly matured and people are demanding for better phones. The smart phone shipment in India grew 11% (yoy) to reach 169 million units and indicates a massive growth in the mid and premium segment market in India.

3. It is observed that there will be a strong push in the demand for Smart phones, desktop, laptops due to digitalization. Going forward one may experience far more digitally connected organizations which connect with their customers, partners and pretty much the whole ecosystem from a digitally enabled technology perspective.

4. PLI Scheme gave a great booster for the Indian mobile manufacturing ecosystem, attracting top players like Samsung & Apple to increase their "Make in India" footprints and make India their export hub.

5. Growth in IT Enterprise Business: Due to new work from home environment, companies quickly oriented themselves towards Cloud & Digital technologies.

6. Due to these changes, Redington has streamlined its processes and strengthened its partnership and offerings in Digital and Cloud Technologies.

7. Healthy Growth in IT Consumer Business & New Product Launch: Disruptions in manufacturing & supply chain issue resulted in shortage of PCs which led to unmet demand for PCs in the market. Resolution of supply chain issues and growth in the high value Gaming PC segment is expected to generate decent revenue growth in this segment. The company is also in the business of distribution of solar products from top global brands in the Indian market, which is a high growth and high margin business.

8. Strong Growth in Mobility: Mobility business is expected to do well due to growth in existing brands and addition of new brands to mobility portfolio. Demand for 5G enabled products is also going to provide growth momentum to mobility segment.

9. Redington's revenues have grown at a 5 year CAGR of 9% to Rs. 56,946 crore driven by consistent expansion in scope of operations through product and brand additions and expansion to new geographies. We understand that it will continue to tap new verticals, product categories and geographies to fuel growth. Further the company has reduced the debt from its book. On quarterly basis, the company recorded Rs. 7157 cr revenue from India whereas as Rs. 9463 cr revenue from overseas; EBITDA was Rs. 544 crs which is a 22% growth YoY and a PAT of Rs. 388 crs which is a 103% growth YoY.

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