REDINGTON Q3 FY26 earnings call.
A source-linked concall view: reported numbers, management language, guidance, commitments and risks that should carry forward.
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Revenue
₹30,922 Cr
verified against source
Revenue YoY
16%
reported change
EBITDA
Pending
latest reported figure
Source
screener in
record provenance
Actual signal trajectory
Where this quarter sits.
Quarter read
What the record says.
Redington reported Q3 FY26 revenue of 30,959 crore (+16% YoY) and PAT of 436 crore (+9% YoY), with PAT margins at 1.41% (1.56% ex-Arena). The company continues its profitable growth trajectory with strong geographic diversification: India (+25%), GCPL cluster (+29%), Africa (+14%), UAE (+19%). Mobility (35% of revenue, +15%) and Endpoint Solutions (32% of revenue, +21%) drove topline growth, while Software Solutions Group delivered exceptional 40% growth now contributing 18% of revenue. Technology Solutions declined 7% due to large deal timing and on-prem to cloud migration. Working capital improved dramatically to 28 days with net debt down Rs 1,000 crore YoY. Arena contributed a 22 crore loss but is improving sequentially (from $9.5M to $4.9M quarterly loss). Management targets ROE of 18-20% going forward, expects SSG to maintain 40%+ growth, and sees data center/opportunity from government mandates. Risks include TSG margin pressure from competition, potential PC refresh cycle delays due to chip shortages, and ongoing Arena turnaround execution.
Colored figures show movement against the previous available record.
Guidance to track
- Management expects ROE to range between 18-20% going forward (floor of 16%), down from Q3's 22.1% which is not considered sustainable at current mix.
- Software Solutions Group expected to continue 40%+ growth across all markets (India, Middle East, Africa, Turkey, Southeast Asia) driven by hyperscaler partnerships, software, and cybersecurity.
- Normal working capital range expected at 35-40 days; current 28 days partly reflects favorable mix from mobility growth and Arena deleveraging.
- Expect Arena losses to continue declining toward break-even in 2027 as local currency and connect businesses are exited; steady state revenue seen at ~$400 million (50% drop from prior year ~$1 billion).
Risks flagged
- Chip shortage causing price increases of ~20%; while channel partners have stocked up, end-customer demand may soften as prices are passed on, potentially delaying refresh cycles by 12-18 months.
- Technology Solutions Group faces margin compression due to excess competition and brand margin compression; management sees limited unilateral gross margin expansion ability.
- Management explicitly stated SSG investments in people and technology may not deliver operating leverage in short term; opex could grow faster than revenue as they intensify hiring and solutioning.
- Arena exit from connect and Turkish LRA businesses will result in one-time costs in Q4 as well; some collectibility issues in Bangladesh ($1.4M AR charge) also flagged as one-off.
Key quotes
- Our internal target that I mean that's a threshold which we would not want to reach is 16% for sure. Our expectation we should range between 18 to 20%. roast for this quarter at 22.1%. I don't want you to consider this as sustainable.
- Clearly prices will be on the higher side. We are yet to see the demand being picked up because the pricing will somewhat sober out the demand also we think. So you just have to wait for a few more quarters to play this out.
- As we transform the company from being a distributor to an orchestrator in the new world order defined by cloud, software and AI, we will be shifting to an unlock next approach to a sharper future facing outlook.
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