Redington Ltd - Where technology meets scale | Initiating Coverage Report

We initiate coverage on Redington Ltd with a BUY rating and target price of Rs 370. Redington stands as a dominant and well-diversified technology distributor in India, spanning mobile devices, cloud and software solutions, and ICT products. The company enjoys strong partnerships with global majors such as Apple (largest distributor in India), HP, Dell, Lenovo, Samsung and many other brands. Redington is at an inflection point in its high-growth, scalable cloud and software business, and it aims to expand 3x over the medium term. Rising premiumization trends, a forthcoming PC refresh cycle, and the upcoming Windows upgrade are expected to further accelerate demand across its Mobility and Electronics (MSG & ESG) segments. Valuations at 9.7x FY27E EPS offer an attractive entry point. BUY.

Cloud and Software Solution - Game changer:

Redington’s Software Solutions Group (SSG) and Cloud segment are set to be key value drivers, with revenues expected to grow 3x over the next 4-5 years, expanding their contribution from 15% to over 30%+. Anchored by strong partnerships, this subscription-led, high-retention business (95%+) delivers 5.5-6% gross margins versus 4–5% in hardware. Its proprietary CloudQuarks platform supports provisioning, billing, analytics, and lifecycle management for 40,000+ resellers and SMBs, fostering deep engagement. With cloud adoption in India, MEA, and ASEAN still nascent compared to the West where software forms ~25% of IT distribution Redington has a long runway for sustainable growth and margin expansion.

Premiumization & Refresh Cycles - Twin growth levers:

Redington is well-positioned to benefit from rising premiumization in mobility and an upcoming PC refresh cycle slated to start from H2FY26. Premium smartphones from Apple, Samsung, Motorola, and Google are driving higher ASPs, supported by Redington’s strong premium retail network. On the enterprise side, deferred upgrades and the Windows 10 end-of-support in Oct’25 are set to trigger a major replacement wave, led by AI-enabled PCs. These trends strengthen Redington’s growth visibility across consumer and enterprise segments, while its expansion into 300+ cities deepens reach beyond metros.

Best-in-class distributor on all parameters:

Redington is the 8th-largest distributor globally and the clear leader in India, the UAE, and Saudi Arabia. Its 40,000+ channel partners across Tier 1–4 cities provide unmatched reach, while exclusive partnerships ensure strong vendor stickiness. The company delivers steady cash flows through disciplined working capital management and maintains a healthy 0.3x debt-to-equity ratio (best in the industry). Beyond distribution, Redington is evolving into a solutions-driven enterprise with investments in its cloud marketplace, AI integration, and sustainability verticals such as solar and device refurbishment.

Valuations, view & risks:

We are factoring in 14.0%/18.6%/22.1% Revenue/EBITDA/Adj. PAT CAGR over FY25-28E. We value the company at an average of 14x PE & 2x PB on Sept’27E to arrive at TP of Rs370. BUY. Our positive stance on Redington is given its leading market positioning, underlying growth in the segments of operations, and ability to generate healthy OCF and superior return ratios. Risks include vendor concentration (Apple, HP, AWS, Microsoft), channel partner risk, working capital intensity in hardware, and geopolitical/FX volatility.

Company website: https://redingtongroup.com/

Click to download the full Redington Group IC Report

Analyst: 

• Vinay Menon - Research Analyst, Institutional Equities (NISM-201600112117)
• Miloni Mehta - Research Associate, Institutional Equities (NISM-201800127664)