Motilal Oswal has initiated coverage on Redington with a Buy rating, implying a potential upside of 36% from the reports market price, valuing the company at 13 times price/earnings on FY29E EPS and expects the technology company to deliver revenue/EBITDA/PAT compound annual growth rate of ~23%/28%/27% over FY26-29E, with EBITDA margin estimated to improve by ~30bp to 2.2%. The growing contribution from Software Solutions Group, supported by hyperscaler partnerships, recurring revenue and cross-selling opportunities, should drive operating leverage and partially offset margin pressure from low-margin hardware distribution.
NDTV Profit's special research section collates quality and in-depth equity and economy research reports from across India's top brokerages, asset managers and research agencies. These reports offer NDTV Profit's subscribers an opportunity to expand their understanding of companies, sectors and the economy.
-
Indian Markets Turning Corner After Two Tough Years, Says Sandeep Tandon -
NDTV Profit Ignite 2026: Experts See Opportunity In Equities, Stay Bullish For Long-Term -
Buy Right, Sit Tight Does Not Work for Individual Stocks, Says Dinshaw Irani -
'Worst Is Behind': Quant MF Sees Market Bottom, Flags 'Extreme Euphoria' In Midcaps -
India's Mutual Fund Industry Could Become A $1 Trillion Opportunity, Say Fund Managers -
'Foreign Investors Are Baraatis': Raamdeo Agrawal's Take On LTCG Tax -
Stay Invested Through Market Cycles: Raamdeo Agrawal at NDTV Profit Ignite -
Ramesh Damani Remains Bullish On India For Next 20-30 Years, Sees Bargains Amid Market Weakness -
CAS Came After A Long Consultation Process: SEBI Chairman Tuhin Kanta Pandey AT NDTV PROFIT IGNITE -
Aim To Cut FPI Onboarding Time From Mth To Five Days: SEBI Chairman Tuhin Kanta Pandey AT NDTV PROFI
Motilal Oswal Report
Domestic brokerage firm Motilal Oswal has initiated coverage on Redington Ltd. with a Buy rating and set a target price of Rs 500 implying a potential upside of 36% from the reports market price, valuing the company at 13 times price/earnings on FY29E EPS and expects the technology company to deliver revenue/EBITDA/PAT compound annual growth rate of ~23%/28%/27% over FY26-29E, with EBITDA margin estimated to improve by ~30bp to 2.2%.
Also Read | Layoffs Are Rising In Tech, But These Skills Are Helping People Unlock Better Pay
The brokerage believes Redington is well positioned to capitalise on structural growth in technology distribution, supported by established original equipment manufacturer relationships, an extensive channel network and a diversified geographic presence. Its expansion into cloud, SaaS and cybersecurity provides an opportunity to improve growth, revenue visibility and profitability.
The growing contribution from Software Solutions Group, supported by hyperscaler partnerships, recurring revenue and cross-selling opportunities, should drive operating leverage and partially offset margin pressure from low-margin hardware distribution.
Meanwhile, data center investments, smartphone premiumisation and AI-led device refresh cycles should support the core business.
ALSO READ | Mahanagar Gas To Fine Organic Q2 Review: Check Motilal Oswal's New Target Prices, Upside
Key risk and concern
Low-margin nature of hardware distribution, working capital intensity, dependence on key OEMs, currency volatility and macroeconomic challenges are the key concerns to the brokerage valuation.
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
