Redington

REDINGTON (₹328.50) exhibits a sharp divergence between short-term weakness and longer-term structural strength. On the daily chart, price is below the 20-period EMA, SMA, and Supertrend, with an established bearish trend (ADX 29.36). This follows an extreme upward volume anomaly on November 4 (+13.0% range, +9.4% return) and a significant drop on November 6 (-7.8%), leaving the stock in a consolidation phase near its 20-day low (+14.0% from range bottom).

However, the weekly and monthly trends remain bullish. The price sits above the 50-period moving averages and Supertrend on the weekly timeframe, and above all major indicators on the monthly chart (ADX 32.42). An active weekly 'Outside Bar' pattern suggests indecision following recent volatility. With annualized volatility at +50.4% and a current drawdown of -20.4%, the setup is high-risk. Immediate resistance lies at ₹334.80 (1.92% above), while support is found at ₹322.70 (1.77% below). A break below ₹322.70 would invalidate the near-term defensive structure, whereas a sustained move above ₹334.80 could signal a resumption of the weekly uptrend.

Redington Ltd reported second-quarter results on November 4, 2026, showing a 20% year-on-year increase in net profit to ₹422 crore and a 48% surge in revenue to ₹42,947 crore. The company attributed this growth to rising enterprise technology and data centre spending, with significant contributions from India (67% revenue growth) and its Technology Solutions Group (91% expansion). Following the release of these figures, which also included a record EBITDA of ₹894 crore (up 41%), Redington's shares surged approximately 11-11.5%.

On November 5, Motilal Oswal initiated coverage on the stock with a 'buy' rating, projecting a bull case price target of ₹1,050. The brokerage forecasts revenue, EBITDA, and PAT to compound at 23%, 28%, and 27% respectively over FY26-29. However, the firm identified key risks including the low-margin nature of hardware distribution, working capital intensity, OEM dependence, and currency volatility.

Redington Limited reported unaudited financial results for the quarter and half-year ended September 30, 2026, which were approved by the Board of Directors on November 4, 2026. The company submitted copies of newspaper publications containing these results to the NSE and BSE on November 5, 2026. For the half-year ended March 31, 2026 (audited), consolidated profit after tax was ₹1,284.15 crores, while standalone profit after tax stood at ₹1,243.90 crores. For the quarter ended September 30, 2025, consolidated profit after tax was ₹422.51 crores and standalone profit after tax was ₹838.64 crores. On November 6, 2026, Redington’s shares traded at ₹328.50 on the NSE, down from a previous recorded price of ₹356.25.

Redington Limited reported unaudited financial results for the quarter and half-year ended September 30, 2026, approved by its Board on November 4, 2026. The company recorded its highest-ever quarterly revenue of ₹43,002 crore in Q2 FY27, representing a 48% year-on-year increase. Consolidated profit after tax (PAT) was ₹541 crore, which included an exceptional impairment loss of ₹80.33 crore related to its Turkish subsidiary, Arena Bilgisayar Sanayi Ve Ticaret A.S. Excluding this impairment, PAT stood at ₹581 crore, up 50% year-on-year. On a standalone basis, the half-year PAT was ₹1,243.90 crore. In addition to financial reporting, the Board appointed Ms. Anchal Dhir as a Non-Executive Independent Director for a five-year term effective November 4, 2026.

Redington demonstrates a clear divergence between top-line expansion and bottom-line profitability in the latest reporting periods. For Q2 FY2026-27, income rose sequentially to ₹43,002 crore from ₹34,966 crore in Q1, with Profit Before Tax (PBT) increasing to ₹624 crore. However, Net Profit declined to ₹423 crore from ₹453 crore in Q1, indicating margin compression or higher tax/exceptional costs despite revenue growth.

Earnings quality shows strain as cash conversion deteriorates; CFO/EBITDA dropped from 74% in Mar 2024 to 32% in Mar 2026, and Cash from Operating Activity fell sharply to ₹231 crore in Mar 2026 from ₹1,079 crore previously. This aligns with a lengthening Cash Conversion Cycle (34 days in Mar 2024 to 34 days in Mar 2026, driven by rising Debtor Days from 57 to 66). Balance sheet pressures are evident with Current Liabilities surging to ₹30,136 crore as of Sep 2026 against Cash & Equivalents of just ₹1,120 crore, while Trade Receivables jumped to ₹25,511 crore.

Ownership structure is heavily skewed toward Foreign Institutional Investors (63.42% in Sep 2026), with Domestic Institutions reducing stakes. While long-term compounded sales growth remains robust at 16% over five years, the recent deceleration in operating profit efficiency and liquidity tightness are key monitoring factors.

Redington’s constructive case rests on accelerating operational momentum and structural shifts in its revenue mix, which contrast with recent short-term price weakness. In the second quarter ended September 2026, the company delivered record revenue of ₹43,002 crore, a 48% year-on-year surge, alongside a 41% increase in EBITDA to ₹894 crore. Net profit rose 20–21% to ₹422 crore, driven by robust demand for cloud, cybersecurity, and AI infrastructure. Growth was particularly strong in India (up 67%) and within the Technology Solutions Group (up 91%), indicating a successful transition toward higher-value software and solutions rather than relying solely on low-margin hardware distribution.

Technically, while the daily trend is bearish with the stock trading at ₹328.5 (a 20.4% drawdown from highs), the monthly and weekly trends remain bullish. The stock has gained 47.2% over the past six months and 19.5% year-to-date as of November 6, 2026. A key condition for this upside case is the sustainability of enterprise IT spending; if demand for data center and cloud infrastructure remains strong, the current valuation gap between fundamentals and price could narrow. However, investors should monitor working capital intensity and OEM dependence, which Motilal Oswal notes as persistent risks despite the growth trajectory.

Redington faces structural margin and operational constraints that temper the enthusiasm from recent earnings growth. Motilal Oswal’s coverage explicitly flags the low-margin nature of hardware distribution, high working-capital intensity, dependence on OEMs, and currency volatility as key risks. Technically, the stock has retreated significantly from its highs; it is down 19.0% over the past month and currently sits in a 20.4% drawdown, with daily technical indicators turning bearish (Supertrend direction: bearish, ADX 29.36). While the monthly trend remains bullish, the near-term price action shows weakness, with resistance clustered closely above at ₹334.8 and ₹335.5, against support at ₹322.7.