Redington (REDINGTON) Q4 12/13 earnings summary

Executive summary

• FY13 consolidated revenue rose 14.1% YoY to ₹24,210.4 crore; net profit increased 10.4% to ₹323.1 crore despite a difficult economic and operating environment.

• Growth benefited from overseas expansion, stronger telecom sales, product and brand diversification, and large enterprise projects closed in H2.

• Positive operating cash flow was maintained for a second consecutive year; the board recommended a ₹0.40 per-share dividend, equal to 20% of face value.

Financial highlights

• Consolidated revenue ₹24,210.4 crore, up 14.1% YoY; EBITDA ₹682.9 crore, up 7.8%; PBT ₹462.4 crore; PAT ₹323.1 crore, up 10.4%.

• Standalone revenue ₹10,454.6 crore, up 5.9% YoY; EBITDA ₹342.8 crore, up 6.7%; PAT ₹171.4 crore, up 9.3%.

• Consolidated EPS rose to ₹8.10 from ₹7.35; standalone EPS increased to ₹4.29 from ₹3.94.

• Consolidated finance costs rose 20.1% to ₹182.7 crore, mainly due to interest on a USD 78 million term loan; gross margin was 6.08% versus 6.07%.

Outlook and guidance

• FY14 outlook described as cloudy amid weak consumer demand, reduced corporate investment, delayed government IT projects, and policy uncertainty.

• Strategy is to prioritize market growth while seeking No. 1 positions and growth faster than the markets served.

• Planned GST implementation could shift logistics toward efficiency; existing warehouse capacity is intended to support ProConnect growth before considering additional logistics centres.

• Cloud offerings across SaaS, IaaS and PaaS were being prepared through partnerships with Microsoft, IBM, Hitachi, NEC, Trend Micro, Adobe, VMware, CA, CtrlS and Netmagic.