Redington (REDINGTON) Q4 07/08 earnings summary

Executive summary

• Consolidated total revenue rose 20% YoY to Rs.10,883.81 crore; PAT increased to Rs.136.07 crore from Rs.101.70 crore. Overseas operations contributed 47% of revenue and 48% of earnings.

• Growth reflected higher IT volumes, expansion in Non-IT products and services, and increased contribution from higher-margin value products.

Financial highlights

• Consolidated sales and service income was Rs.10,870.06 crore; total revenue was Rs.10,883.81 crore, versus Rs.9,064.87 crore in FY07.

• Consolidated EBITDA rose 31% to Rs.259.04 crore; EBITDA margin increased to 2.38% from 2.19%.

• Consolidated PBT increased 39.14% to Rs.177.06 crore and PAT rose 33.80% to Rs.136.07 crore; EPS was Rs.17.48 versus Rs.15.36.

• Standalone revenue increased ~23% to Rs.5,780.27 crore; PAT rose 58.20% to Rs.67.11 crore and EPS increased to Rs.8.62 from Rs.6.41.

• Proposed dividend rose to 35% (Rs.3.50/share) from 25% (Rs.2.50/share) in FY07.

Outlook and guidance

• FY09 outlook remained encouraging, supported by low PC penetration and expected demand in India, the Middle East and Africa; expansion into new verticals and markets was expected to add growth avenues.

• First Chennai automated distribution centre was expected to be operational by Q4 FY09; overseas scale-up planned through organic and inorganic growth.

• High-level repair services, service-network expansion and third-party logistics were positioned to contribute to future growth and earnings.