Redington India is the brand behind the top global brands like Hewlett Packard, Toshiba, IBM, Cisco, Lenovo, Acer, Apple, Blackberry, Xiaomi, HTC and Motorola. The technology distributor with strong partnerships is expanding its horizons into the Middle East, Africa and Turkey (MEAT), Srilanka, Bangladesh and CIS countries. The new acquisitions and partnerships would gain operational synergies and provide inorganic growth in the new regions i.e. Acquired 80% of Turkey based leading Oracle distributor linkplus. The end-to-end supply chain firm has increased it’s smart phone distribution to new markets like UAE and Nigeria. The IT and Telecom industries are now penetrating into small towns and villages, the firm has vertical businesses with pan india presence and would likely to become the largest contributor serving not only new product launches but also for the sustenance of growth of brands in the Indian market and extending its wings to other geographies.
Valuation: At CMP of Rs.106, Redington is currently trading at P/E of 7.5x on FY18E EPS of 14.3.We value the company at P/E of 9.5x of FY18E EPS Rs.14.3 for the target of Rs.136.We initiate coverage on Redington with a “BUY” rating for a target price of Rs.136 representing an upside potential of 28% in 12-15 months period.