Redington Limited

Technology — Information Technology Services · NSE

₹384.40−₹7.70 (−1.96%)

DalalBaazaar Score

55 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Low

No individual risk factor stands out on this snapshot.

In simple words: Strong business and financial position, with both sales and profits growing well. Thin profit margins are the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 8:27 pm

Understanding the Business

Company site ↗

The 60-second version of Redington Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Redington Limited distributes information technology, mobility, and other technology products in India, the Middle East, Turkey, Africa, and South Asian countries.

IndustryInformation Technology Services

SectorTechnology

Employees13,457

Annual revenue₹1.19 L Cr

How does it make money?

Turns over ₹1.19 L Cr a year. Of every ₹100 of sales, about ₹1 reaches shareholders as profit, with ₹2 left at the operating level before interest, tax and depreciation. Each of its 13,457 employees supports ₹8.85 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹8.85 Cr

Who are its competitors?

The closest listed comparisons in its industry are TATA CONSULTANCY SERV LT, INFOSYS LIMITED, HCL TECHNOLOGIES LTD, WIPRO LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Some evidence

ROCE of 18.8% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

Peer median ROE32.0%

What is the outlook?

6 analysts covering the stock expect revenue to grow about 14.6% and earnings to grow about 16.3% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+14.6%

Est. earnings growth+16.3%

Analysts6

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +50% while net margin moved -29% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+50%

Margin effect-29%

DalalBaazaar Score

55/ 100

Moderate

Weighted across six categories. Every point is explained below.

• ROE of 14.7% is moderate
✗ ROE has fallen by 5.4 points over the period

Quality vs. Valuation

Company Quality

54/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

44/ 100

Expensive

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

17.7x

3Y Median

12.8x

40 monthly readings · mean 13.3x · range 8.0x–21.4x

Sector Median

16.5x

median of 4 sector peers

⚠️Current valuation is approximately 38% above its 3y median of 12.8x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

🟡Against its sector it is priced broadly in line with the peer median of 16.5x.

vs. its own history

Expensive

12.8x median over 40 months · +38%

vs. sector peers

Fair

16.5x median of 4 peers · +7%

vs. generic bands

Fair

15x–35x

EV/EBITDA

13.3x

PEG

7.73

What's Good / What's Bad

🟢 What's Going Well4

Debt is being paid down
Total debt is down 14% over 3 years.
Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
Very low debt
Debt/Equity of 0.27x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 20.1% to 14.7% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 27.4% to 18.8% — often a sign of competition or overexpansion.

Red Flags

1 item require attention · 1 watch

🟡Receivables growing faster than salesFinancial
Receivables up 79% against revenue up 50% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 18.8% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹49 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Sales are being booked faster than collected
Receivables are up 79% against revenue up 50%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
The price already assumes success
The stock trades 38% above its own median multiple. At this level the business has to deliver just to stand still, and a stumble is repriced twice — lower earnings on a lower multiple.
Returns on shareholder capital are falling
ROE has dropped from 20.1% to 14.7%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 11% a year✓ 14.5% CAGR
Latest reported year was 34.6%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 0%✓ 2.0%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✓ ₹49 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 1.2x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 16%✓ 18.8%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

10 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

6 good · 5 neutral · 0 weak

Market Cap

₹30,051 Cr

Mid Cap

Mid-sized — more growth headroom, but sharper swings than large caps

P/E (Trailing)

17.7x

Fair

Fairly valued against the generic band

P/B Ratio

2.96x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹21.76

Profitable

Profitable on a per-share basis

ROE

14.7%

Moderate

Moderate capital efficiency

ROCE

18.8%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.27x

Low

Conservative leverage

Revenue Growth (YoY)

34.6%

Healthy

Healthy top-line growth

Profit Growth (YoY)

76.7%

Healthy

Profits growing at a healthy clip

Dividend Yield

1.56%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹49 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

12.4x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

1.9%

Weak

Thin margins leave little room for error

Net Margin

1.3%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.41

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.86

Market-like

Moves roughly in line with the market

52W Range Position

85%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

399.2 / 376.1

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

38.4

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹79,337 Cr	₹89,310 Cr	₹99,291 Cr	₹1.19 L Cr	+14.5%
EBITDA	₹2,250 Cr	₹2,161 Cr	₹2,249 Cr	₹2,394 Cr	+2.1%
EBITDA Margin	2.8%	2.4%	2.3%	2.0%	—
PAT (Net Profit)	₹1,393 Cr	₹1,219 Cr	₹1,605 Cr	₹1,490 Cr	+2.3%
EPS	₹17.81	₹15.59	₹20.53	₹19.06	+2.3%
ROE	20.1%	16.1%	18.4%	14.7%	—
ROCE	27.4%	23.8%	27.7%	18.8%	—
Total Debt	₹3,321 Cr	₹2,958 Cr	₹2,809 Cr	₹2,842 Cr	-5.1%
Free Cash Flow	-₹3,396 Cr	₹957 Cr	₹129 Cr	₹49 Cr	—

🟢 Revenue has grown at 14.5% a year over 3 years.

🟢 EBITDA has grown at 2.1% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 2.0% over 3 years.

🟢 PAT (Net Profit) has grown at 2.3% a year over 3 years.

🟢 EPS has grown at 2.3% a year over 3 years.

🔴 ROE has fallen from 20.1% to 14.7% over 3 years (-5.4 pts).

🔴 ROCE has fallen from 27.4% to 18.8% over 3 years (-8.6 pts).

🟢 Total Debt has shrunk at 5.1% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹3,396 Cr to ₹49 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹33,839 Cr

Total Liabilities

₹23,415 Cr

Cash & Equivalents

₹1,110 Cr

Operating Cash Flow

₹231 Cr

Capex

-₹182 Cr

Shareholding (proxy)

Institutional Holding

38.5%

Insider Holding

26.0%

Corporate Actions

Next Earnings

04 Nov 2026

Dividend Rate

₹6

Ex-Dividend Date

03 Jul 2026

Analyst Consensus

Recommendations

6 Buy · 0 Hold · 0 Sell

Target Price (Mean)

₹444

+15.5% vs CMP

Target Range

₹380 – ₹505

Peer Comparison

Company	P/E	ROE
TATA CONSULTANCY SERV LT	17.3x	45.6%
INFOSYS LIMITED	15.8x	32.0%
HCL TECHNOLOGIES LTD	20.4x	24.6%
WIPRO LTD	14.5x	15.9%

Recent News

4 mixed2 general

Stocks to Buy: Expert Picks That Could Deliver Returns of Up to 27%; Pricol, Redington and More | Target Price

Goodreturns, 13 OctAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Is Redington Limited (NSE:REDINGTON) Potentially Undervalued?

Simply Wall Street, 02 Jun

Redington could gain as memory shortage reshapes ICT distribution; brokerage sees 20% upside

The Economic Times, 15 OctAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Redington Share Price fall: today’s close at Rs 391

Univest, 21 SeptPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Redington Share Price: Redington hits new all-time high, zooms 18% on record Q1 earnings

Business Standard, 30 JulResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Redington Stock In Focus After Report Of Apple Scaling Back iPhone 18 Pro Orders

NDTV Profit, 09 Oct

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongFinancial Health · Risk

MiddlingGrowth · Valuation

WeakBusiness Quality · Profitability

Points for each in the Score ↑

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you.

All 5 tripwires holding · see Key things to watch ↑