Redington (REDINGTON) Q1 24/25 earnings summary

Executive summary

• Achieved highest-ever Q1 revenue, with consolidated revenue at ₹21,282.33 crore and PAT up 13% year-over-year (excluding Arena), despite market headwinds in India, Middle East, and Turkey.

• SISA region led growth with 6% revenue and 10% PAT increase; ROW (excluding Arena) saw 4% revenue decline but 17% PAT growth.

• Cloud Business Unit posted 35% top-line growth, and Endpoint Solutions Group grew 11% in revenue.

• The Group includes extensive international operations, with subsidiaries and associates across Asia, Africa, and Europe.

• Arena in Turkey faced losses due to high inflation, interest rates, and a sharp IT market decline; corrective actions are underway.

Financial highlights

• Global revenue grew 1.5% YoY (excluding Arena 2.6%); EBITDA up 7% (excluding Arena), PAT up 13% (excluding Arena).

• Free cash flow improved, but Q1FY25 saw negative Rs. 436 Mn due to working capital outflows.

• Gross debt at INR 3,180 crore; net debt at INR 1,659 crore; debt to equity improved to 0.21x.

• Factoring plus interest cost for the quarter was INR 149 crore, down from INR 185 crore in Q4.

• Inventory provision for the quarter was 1.3 basis points, higher than the usual 0.6 basis points.

Outlook and guidance

• Management expects headwinds in India, MEA, and Turkey to be transient, with recovery signs already visible.

• Focus on expanding subscription and consumption business models, digital adoption, and ESG leadership.

• Strategic investments in cloud, AI, cybersecurity, and sustainable tech to drive future growth.

• Q3 and Q4 are expected to be stronger due to seasonality and new product introductions.

• Dividend of ₹6.20 per equity share for FY24 was recommended and approved.