Redington Q1 FY27 Results (NSE: REDINGTON)
Signal: Growth reaccelerated
The read
Revenue growth accelerated materially (34.5% YoY, fastest in 8 quarters) led by a 62.6% surge in SISA segment. However, operating margin stagnated at ~2% for the 12th consecutive quarter — the core distribution business shows no margin expansion despite strong top-line growth. PAT beat is flattered by a low base (Q1FY26 had ₹152 Cr exceptional impairment); normalized PAT grew ~35% YoY. ROW segment margins are beginning to recover from very low levels (1.56% vs 0.60% YoY).
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹34,922.47 Cr | 34.5% | 5.1% |
| EBIT | ₹700.21 Cr | 76.9% | |
| Net profit | ₹453.49 Cr | 94.6% | |
| EPS | ₹5.8 | 90.8% | |
| EBIT margin | 1.98% |
P&L walk
Revenue surged 34.5% YoY to ₹34,922 Cr, the fastest growth in 8 quarters, driven by a 62.6% jump in the SISA segment (India & South Asia). Operating profit (EBIT before finance costs) rose 76.9% YoY, yet the operating margin remained stagnant at ~2% (1.98%, -6bps YoY) — the 12th consecutive quarter of sub-2.1% OPM. PAT surged 94.6% YoY to ₹453 Cr, boosted by a low prior-year base that included a ₹152 Cr exceptional impairment charge.
Segments
Both segments grew: SISA revenue surged 62.6% YoY (driven by India & South Asia) and contributed 69% of segment PBIT; ROW grew 6.5% YoY but saw PBIT jump 178% YoY (from a low base), indicating improving profitability in Middle East/Africa. SISA's PBIT margin narrowed to 2.29% from 2.45% a year ago; ROW's margin improved to 1.56% from 0.60%.
Key positives
- Consolidated revenue ₹34,922 Cr, +34.5% YoY — highest growth rate in 8 quarters
- SISA segment revenue +62.6% YoY, indicating strong India & South Asia demand
- ROW segment PBIT margin improved to 1.56% from 0.60% YoY — first meaningful recovery after a period of weakness
- PAT ₹453 Cr, +94.6% YoY (though includes base-effect from prior-year exceptional impairment)
Key concerns
- Operating margin remains stagnant at ~2% for 12 consecutive quarters — no operating leverage or pricing power evident despite revenue growth
- Standalone operating margin slipped 10bps YoY to 2.27%, suggesting gross margin pressure in the distribution business
- Finance costs sequentially +24% QoQ (₹89 Cr vs ₹72 Cr) despite lower YoY — watch working capital intensity
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