Redington (REDINGTON) Q2 24/25 earnings summary

Executive summary

• Achieved record quarterly revenue of ₹24,952 crore in Q2FY25, up 12% year-over-year and 17% quarter-on-quarter, with profit after tax at ₹292.87 crore and PAT margin of 1.34%.

• All business units posted double-digit growth, led by Cloud (54% YoY), Mobility Solutions (26% YoY), and strong SISA (Singapore, India & South Asia) performance with 24% revenue and 13% PAT growth.

• India and UAE, comprising over 60% of business, grew 25% and 24% YoY, respectively; West Africa and smaller GCC markets showed signs of profitable growth recovery.

• ProConnect Global delivered strong results with Q2FY25 PAT up 409% year-over-year and EBITDA up 30%.

• Unaudited standalone and consolidated financial results for the quarter and half year ended September 30, 2024, were approved and reviewed by the Board and auditors.

Financial highlights

• Q2FY25 global revenue reached ₹24,952 crore, up 12% year-over-year; EBITDA at ₹1,305 crore, down 8%; PAT at ₹292.87 crore, down 3% YoY.

• Working capital days reduced to 25, with free cash flow of ₹2,260 crore, aided by operational efficiency and lower interest rates.

• Gross margin declined due to a higher mix of mobility business, large low-margin deals, and inventory provisions, especially in KSA.

• Interest cost for the quarter was ₹88 crore, down 50% YoY; excluding Arena, interest cost was ₹30 crore, down 59% YoY.

• Basic and diluted EPS (consolidated) for Q2 FY25 stood at ₹3.75, compared to ₹3.15 in Q1 FY25.

Outlook and guidance

• Optimistic outlook for Q3 and Q4, with festive season, NPI momentum, and backlog in India and MEA expected to drive growth.

• Expectation of margin improvement in H2, aided by KSA recovery and reversal of inventory provisions.

• Working capital days expected to normalize to 35-40 days in future quarters.

• Focus on operational efficiency, digital platforms, and leveraging technology trends such as hybrid cloud, AI, and digital transformation.