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    Redington

    REDINGTON
    Services·14 May 2026
    Management Summary

    Redington delivered a robust Q4 and full year FY26, driven by strong revenue and profit growth, particularly from its India operations and the high-margin Software Solutions Group. Despite geopolitical challenges in the Middle East impacting Q4 performance and leading to specific provisions, the company maintained capital discipline and advanced strategic initiatives like AI integration. Management expressed confidence in sustaining momentum, especially in India and Africa, while navigating ongoing market complexities and focusing on profitable growth.

    Highlights

    5

    • Redington reported Q4 FY26 revenue of ₹33,269 crores, marking a 25% year-on-year growth, driven by strong performance across core markets.

    • Full year FY26 revenue reached ₹119,347 crores (nearly $13.5 billion), a 20% year-on-year growth, with PAT (excluding exceptional items) growing 17% and a margin of 1.3%.

    • India's business had a fantastic quarter, with top line growing 50% and profit after tax by 41%, reflecting strong demand in PC, mobility, cloud security, and IT infra investments.

    • The Software Solutions Group (SSG) continued its strong momentum, growing 31% in Q4 and contributing 17% to the top line for the full year, up from 15% in FY25, with higher gross margins and PAT.

    • Working capital days were reduced to 30 days, and ROCE stood at 22%, demonstrating efficient capital management.

    Concerns

    4

    • Middle East operations were significantly impacted in March 2026 due to geopolitical tensions, leading to lower revenue, lower gross margin, and incremental costs.

    • The Arena subsidiary incurred a loss of ₹44 crores (Redington's portion ₹22 crores) related to exit costs on the Lira business, and an impairment of ₹75.2 crores on a trade name was recognized as an exceptional item.

    • Opex saw a slight uptick in Q4 due to war-related premiums on insurance and freight, and one-off AR provisions in certain geographies, though full year opex to revenue declined by 17 bps.

    • The KSA region experienced subdued growth for the full year at 5% and a degrowth of 12% in Q4 due to the Middle East war in March.

    Key financials

    Single quarter

    07 metrics
    1. 01Revenue₹33,269 Cr+25%YoY
    2. 02PAT (ex-exceptional)₹467 Cr
    3. 03PAT Margin (ex-exceptional)1.4%
    4. 04Full Year Revenue₹1.19L Cr+20%YoY
    5. 05Full Year PAT Growth (ex-exceptional)17%

    Segment breakdown

    India (Q4 FY26)
    50% Top Line Growth41% PAT Growth
    Mobility (Q4 FY26)
    19% Revenue Growth33% Share of Top Line
    Endpoint Solutions Group (PC) (Q4 FY26)
    28.0% Revenue Growth30% Share of Top Line₹500 Cr Large Deals
    Technology Solutions Group (TSG) (Q4 FY26)
    34% Revenue Growth19% Share of Top Line₹1,100 Cr Large Deals
    Software Solutions Group (SSG) (Q4 FY26)
    31% Revenue Growth17% Share of Top Line
    UAE (Full Year FY26)
    22% Growth
    UAE (Q4 FY26)
    6% Growth
    GCCL (Full Year FY26)
    33% Growth
    GCCL (Q4 FY26)
    51% Growth
    KSA (Full Year FY26)
    5% Growth
    KSA (Q4 FY26)
    -12% Growth
    Africa (Full Year FY26)
    13% Growth
    Africa (Q4 FY26)
    26% Growth
    List

    Capital allocation

    3
    high confidence
    CategoryHeadline
    Dividend

    ₹6/share (final)

    Payout ratio 30.0%

    M&A

    Arena (Lira business)

    divestment · closed

    Liquidity

    Liquidity disclosed

    Management is conserving capital for growth opportunities and due to geopolitical uncertainty, also anticipating higher working capital requirements for large deals and potential RAM shortage.

    Guidance & targets

    5
    CategoryTargetPriority
    Profitability
    SSG Gross Margin
    5.5-6%
    		Medium
    Profitability
    Operating Profit
    Maintain
    		High
    Profitability
    ROCE
    >18%
    		High
    Profitability
    EBITDA (outside Arena)
    2.2-2.4%
    		Medium
    Opex
    Capability Building Opex
    Higher
    		Medium

    Middle East Operations Recovery

    next quarter / H1 FY27
    CurrentImpacted in March, expected to continue Q1/Q2 FY27
    TargetReturn to pre-crisis growth rates (~20% YoY for UAE)

    Why it matters

    The Middle East is a significant market (30-35% of business), and its recovery is crucial for overall growth and profitability.

    We expect the first 2 quarters in the Middle East region, Africa continues to be strong. And as soon as the crisis is out of the way, based on -- I mean some of us were in Dubai last week and we got a first-hand feel for the market as well.

    How to verify

    key_financials.segment_breakdown[name='UAE (Q4 FY26)'].metrics[label='Growth']

    Risks & concerns

    4
    RiskSeverity

    Geopolitical tensions in Middle East

    The West Asia crisis significantly impacted Middle East operations in March 2026, leading to supply chain disruptions, withdrawal of war risk insurance, inventory challenges, and delayed receivables. This is expected to continue impacting Q1 and potentially Q2 FY27. — Management acknowledged

    high

    Component shortages (PC, GPU, smartphones)

    Supply gaps exist in smartphones, PCs, and GPUs, driving strong demand and anticipated larger price increases. The supply issue is expected to last for 12-18 months. — Management acknowledged

    medium

    Challenging economic conditions in Turkey

    Despite inflation and interest rates going down, conditions remain challenging, leading to softening demand and necessitating an impairment charge for the Arena subsidiary. — Management acknowledged

    high

    Higher working capital requirements

    Anticipated due to large deals and potential RAM shortage, requiring the company to conserve cash. — Management acknowledged

    medium

    Q&A highlights

    7

    “to give a little bit of perspective on the coming year, clearly, we continue to see good momentum and growth in India. We will see a little bit of softness for the first quarter. We expect the first 2 quarters in the Middle East region, Africa continues to be strong. And as soon as the crisis is out of the way, based on -- I mean some of us were in Dubai last week and we got a first-hand feel for the market as well.”

    Analysts sought clarity on the sustainability of India's strong growth and potential recovery in other regions, especially given pre-buying and geopolitical issues.

    asked by Nitin Padmanabhan

    3 min read6 chapters

    Detailed Narrative

    01

    Strong Q4 and Full Year FY26 Performance

    Redington delivered a robust Q4 FY26 with revenue of ₹33,269 crores, a 25% year-on-year growth. The full fiscal year FY26 concluded with revenues of ₹119,347 crores, marking a 20% YoY increase and nearly $13.5 billion. Profit after tax (excluding exceptional item📎s) for the full year grew 17% with a margin of 1.3%, reflecting sustained momentum and disciplined execution across core markets.

    02

    Geographic Performance Highlights

    India demonstrated exceptional growth in Q4, with its top line expanding by 50% and profit after tax by 41%, driven by strong PC and mobility demand, as well as cloud and IT infra investments. Africa continued its encouraging momentum, growing 26% in Q4 and 13% for the full year. The GCCL region also showed strong performance, growing 51% in Q4 and 33% for the full year, partly due to market share gains. However, the Middle East, particularly UAE (6% Q4 growth vs 22% FY growth) and KSA (-12% Q4 growth vs 5% FY growth), was impacted by geopolitical tensions in March.

    03

    Business Unit Growth Drivers

    Mobility grew 19% YoY in Q4, contributing 33% to the top line, fueled by premium segment demand. The Endpoint Solutions Group (PC) saw 28% YoY growth, making up 30% of the top line, with large deals totaling nearly ₹500 crores. The Technology Solutions Group (TSG) grew 34% in Q4, contributing 19% to the top line, largely due to timing of large deal executions exceeding ₹1,100 crores. The Software Solutions Group (SSG) continued its strong trajectory with 31% growth in Q4, now representing 17% of the top line for the full year, up from 15% in FY25, characterized by higher gross margins and PAT.

    04

    Strategic Initiatives in AI and Platforms

    Redington rolled out Cloud Quarks platform 2.0 with enhanced digital lifecycle management and analytics. The company established an AI lab/capability center in Chennai and launched an AI Exchange, a marketplace with over 200 AI agents, to accelerate AI adoption. Additionally, 5 AI learning centers were opened in Tier 2 cities through a CSR program to build AI human capacity, underscoring the focus on future-ready capabilities.

    05

    Working Capital and Profitability Management

    The company successfully lowered its working capital days to 30 and achieved a ROCE of 22%. Opex control remained strong, with full year opex to revenue declining by 17 basis points. While Q4 saw a slight uptick in opex due to war-related premiums and one-off📎 AR provisions, management emphasized that a portion of opex is strategic investment in capability building, particularly for the enterprise segment, which will continue for 1-2 years.

    06

    Arena Subsidiary Restructuring and Impairment

    The Arena subsidiary recorded a Q4 loss of ₹44 crores (Redington's portion ₹22 crores) due to exit costs from the Lira business. An impairment loss of ₹75.2 crores on a trade name in Turkey Arena was recognized as an exceptional item📎, reflecting challenging economic conditions. Management indicated a strategic shift for Arena to focus on IT (PC, servers, cloud) and USD-based businesses, expecting losses to reduce and profitability to return in the subsequent year.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.