Q1 2027 Redington Ltd Earnings Call Transcript
Key Points
- Consolidated revenue grew 34% year-on-year to INR34,966 crores, with EBITDA up 67% and PAT up 77%, showcasing strong operating leverage.
- India business was a standout, with top-line growth of 63% and profit growth of 60%, driven by strong performance across all business units.
- Software Solutions Group (SSG) grew 52% year-on-year, the highest among business units, fueled by cloud, software, and professional services.
- Technology Solutions Group (TSG) grew 50%, with a strong pipeline of large data center deals worth nearly INR1,000 crores in the quarter.
- Working capital discipline improved, with days reduced to 32 from 37 in the prior year, and the company earned Microsoft's Frontier Partner designation.
- Arena business continued to be a drag, posting a loss of INR64 crores (Redington's share: INR31 crores) due to lower revenue and gross margin compression.
- Geopolitical tensions in the Middle East caused flat to slight degrowth in UAE and Saudi Arabia, with new projects being postponed.
- Supply chain disruptions in the Middle East led to increased freight and insurance costs of about $3 million, not all of which could be passed on to customers.
- The strong growth in Endpoint Solutions was partly driven by component shortage-induced price hikes, with unit growth only in single digits, raising sustainability concerns.
- Finance costs increased sharply by 74% sequentially due to higher inventory levels and rising market interest rates, impacting profitability.
Ladies and gentlemen, good day and welcome to the Redington Limited Q1 FY27 earnings conference call. (Operator Instructions) Please note that this conference is being recorded. This conference call may contain forward-looking statements about the company, which are based on beliefs, opinions, and expectations of the company as of the date of this call.
These statements are now the guarantees of future performance and may involve risks and uncertainties that are difficult to predict. I would now like to hand the conference over to Mr. V.S. Hariharan, Managing Director and Group Chief Executive Officer of the company.
Thank you and over to you, sir.
Thank you. Good morning, everyone, and thank you for joining us. Q1 FY '27 has been an exceptional quarter for Redington and a strong start to the new financial year, both from a revenue and a profitability perspective. Technology continues to accelerate dramatically.
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