Redington (REDINGTON) Q1 24/25 earnings summary

Executive summary

• Achieved highest-ever Q1 revenue at INR 21,282.33 crore (0.4% YoY growth), with profit after tax up 13% YoY, though EBITDA declined 12% and PAT was nearly flat excluding Arena.

• Maintained strong market presence across 40 markets, with leadership in India, UAE, KSA, GCC, East and West Africa, and #2 in Turkey.

• Unaudited standalone and consolidated financial results for Q1 FY25 were approved by the Board and auditors, with no material misstatements.

• 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

• Consolidated Q1 FY25 revenue was INR 21,282.33 crore, up from INR 21,187.18 crore YoY, with profit at INR 217.04 crore.

• Free cash flow improved in some segments but was negative at Rs. -436 Mn overall due to working capital outflows.

• Gross debt at INR 3,180 crore; net debt at INR 1,659 crore; net debt/equity improved to 0.21x from 0.33x.

• 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 visible.

• EBITDA margin guidance (excluding Arena) remains at 2.3%-2.5%, with PAT margin at 1.3%-1.4%.

• Focus on operational efficiency, digital adoption, and expanding as-a-service offerings.

• Strategic investments in cloud, cybersecurity, and sustainability tech to capture market trends.

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