Revenue jumped 25.62%, but other income drove a 68.66% profit fall
Costs grew faster than sales and operating margin fell 0.41 percentage points YoY; the initial stock gain was below its typical post-results move.
Filed 13 May 2026, 21:08 IST · after market close · Redington Ltd (REDINGTON)
Key takeaways
- Consolidated revenue grew +25.62% YoY, but expenses grew faster at +26.14%, limiting operating-profit growth to +2.93%.
- Net profit fell -68.66% YoY as other income moved from Rs 695.87 cr to a negative Rs 96.77 cr and the tax rate rose 7.17 percentage points.
- Operating margin narrowed 0.41 percentage points YoY to 1.85%, its second consecutive quarterly decline after reaching 2.03% in Q2FY26.
Price around the results
Revenue growth did not translate into profit growth
Consolidated revenue rose +25.62% YoY to Rs 33,213.03 cr, but expenses grew faster at +26.14%, so operating profit increased only +2.93%. Net profit fell -68.66% to Rs 287.58 cr because other income swung from Rs 695.87 cr in Q4FY25 to a negative Rs 96.77 cr this quarter. Other income accounted for a negative 24.49% of pre-tax profit, making the reported profit comparison particularly low quality.
Higher costs and tax rate compressed earnings
Sequentially, revenue grew +7.41% while expenses rose +7.60%, narrowing operating margin by 0.17 percentage points to 1.85%. The YoY margin decline was larger at 0.41 percentage points, despite interest expense falling -11.67% and depreciation falling -20.16%. The tax rate rose 7.17 percentage points YoY and 4.11 percentage points QoQ, adding to the pressure on net profit.
Margin remains near the bottom of reported Services peers
Operating margin improved from 1.54% in Q1FY26 to 2.03% in Q2FY26, then declined to 2.02% in Q3FY26 and 1.85% in Q4FY26. Among 12 Services peers that have reported the quarter, Redington's margin was 29.3 percentage points below the 31.15% median and ranked second from the bottom.
Management pointed to portfolio shifts and automation
Management said Other Services revenue declined after the Paynet divestment, while AI-based service-delivery automation was reducing the number of system integrators and disrupting the ecosystem. The company told analysts it had signed up for the Apple iPhone business and was implementing reverse logistics for product returns and recycling. Management also said it had an ambition to grow the software segment to 20%.
The initial reaction was modest versus Redington's history
The results were filed after market close, and the stock rose +3.38% on the first trading day, with the move reaching +5.35% on the next day. Across the last eight results reactions, the stock rose four times and fell four times, with a median absolute move of 5.57%, making the initial gain smaller than its typical move. The return was +13.79% after 15 trading days.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹33,213 cr | ₹30,922 cr | +7.41% | +25.62% |
| Other income | ₹-97 cr | ₹37 cr | — | — |
| Expenses | ₹32,599 cr | ₹30,296 cr | +7.60% | +26.14% |
| Operating profit | ₹614 cr | ₹626 cr | -1.84% | +2.93% |
| Operating margin (%) | 1.85% | 2.02% | — | — |
| Interest | ₹72 cr | ₹79 cr | -8.34% | -11.67% |
| Depreciation | ₹50 cr | ₹47 cr | +7.67% | -20.16% |
| Profit before tax | ₹395 cr | ₹538 cr | -26.51% | -65.58% |
| Tax | ₹108 cr | ₹124 cr | -13.47% | -53.28% |
| Net profit | ₹288 cr | ₹413 cr | -30.43% | -68.66% |
| EPS (₹) | ₹5.01 | ₹5.57 | -10.05% | -41.13% |
Operating margin of 1.85% compares with a Services sector median of 31.15% across 12 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +3.38% | +2.19% |
| Next session | +5.35% | — |
| 5 sessions | +4.65% | +3.62% |
| 15 sessions | +13.79% | — |
| 30 sessions | +31.17% | — |
Volume on the results session was 2.07× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
Guidance & outlook
- Redington has an ambition to grow its software segment to 20%.
New products
- Redington signed up for the Apple iPhone business.
New initiatives
- Redington is implementing reverse logistics for product returns and recycling.
Competition
- Redington is identified as India’s No. 1 distributor by VAR India.
Problems & risks
- Other Services revenue declined because of the Paynet divestment.
- AI-based service delivery automation is reducing the number of system integrators and disrupting the ecosystem.
What to watch
- Whether operating margin recovers from 1.85% after two consecutive quarterly declines.
- Whether expenses continue to grow faster than revenue after the +26.14% YoY versus +25.62% gap.
- Whether other income returns from negative Rs 96.77 cr without again becoming a major driver of pre-tax profit.