Redington Limited

Nitin Padmanabhan

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Nitin Padmanabhan

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Athreya

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Athreya

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Athreya

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Krish Mehta

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S V Krishnan

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Chintan Sheth

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Sanjay Dam

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Sanjay Dam

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The first is, Redington has always prioritized risk over growth and if you just look at the landscape over the next few quarters from your lens, do you think that growth plumbs risk at this point in time and is there any change in philosophy in terms of how you mange risks, that was the first question.

— Nitin Padmanabhan

To the question about risk over growth or growth trunks risk, I think it is always going to be a very balanced sort of portfolio for us.

— Nitin Padmanabhan

In the last quarter we started to see a shift from the work from home and learn from home started to reduce whereas the consumption in the offices small and medium enterprises, enterprises, large customers, government education, schools and universities all started to grow up and we had to shift a model and pivot a model to make sure we capitalize on that, now that is no risk strategy but it is a maximizing the market opportunity from a growth perspective.

— Nitin Padmanabhan

There are countries right now in our portfolio which happen to have a higher risk profile Nigeria, Kenya, Ghana, Egypt all of them and we are making choices to make sure that we stay in the right direction there ok, so, it is that from a risk versus growth perspective, we are very balanced but we are very, very focused on maximizing the market opportunities in a vey good way.

— Nitin Padmanabhan

We will continue for some time till the shortage situation goes away but there is no concern at all on this scenario and also as the enterprise performance, the IT value performance has been better as you know very well this also tends to increase the debtor days and at the same time we will also get higher creditor which can cushion a bit in terms of increase in debtor days.

— S V Krishnan

As Rajiv said we are well within that range and we do not see any concern in this.

— S V Krishnan

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Good morning. Congratulations on the strong quarter. I have a quite a few questions while I will just ask two and come back in the queue. The first is, Redington has always prioritized risk over growth and if you just look at the landscape over the next few quarters from your lens, do you think that growth plumbs risk at this point in time and is there any change in philosophy in terms of how you mange risks, that was the first question. The second question is on obviously the working capital which has gone up if you could give us some break down on receivables, inventory, payables and what le

S V Krishnan

As you know the net working capital by the end of the quarter it was about 28 days split into debtor days of about 52 days, inventory days of about 32 days and creditor days of about 56 days. I want to ascribe one important reason as to why there is spike in working capital as Rajiv alluded to you. In the enterprise space what we see is there are short shipments and since there are short shipments and the balance shipments are taking time because of the general shortages that we see in the industry. We had to store, we stocked and could not bill that has enabled us to increase our inventory da

Q

I think it was answered clearly, in working capital I just want to make all of you know we are at it there is no need for concern and if there are any business related situation we will handle in the best possible manner, we will not leave any stone unturned as far as the efficiency is concerned and to the point on cost Pranav, what I want you to know in spite of the additional cost that we are incurring towards the capability building, till if you see the increase in cost is well within control, in a way of speaking what we had done in Q1 is the bookish performance, revenue has grown strongly

Management

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Good morning and thank you for the opportunity. Sir, I just want to know as to whether the mobility segment grew year-on year in the rest of world market or how is the performance there has been, that is my first question? Rajiv Srivastava: Mobility grew in the rest of the world as well; mobility has grown by 24% in the rest of the market.

Athreya

Sure sir, thank you. And in the past few quarters we had incorporated new subsidiaries in Bahrain, Jordan etc. etc. So, what is the medium-term perspective, how are we trying to grow in new geographies, and can you just talk about the new products, the solar products, and our AWS partnership as well? Rajiv Srivastava: Okay, again as been thanks so much and that is a great question pointing towards how are thinking about our business and clearly our business has two or three dimensions of growth. One is in a distribution business you add more products, you will surely grow or you add more geogr

Q

Hi! Congratulations on a good quarter and thank you for taking my questions. The first question I have is the follow up on the cloud business, if you could provide the margins for the cloud and cloud managed services for the quarter? Rajiv Srivastava: The cloud product re-sale comes at a similar margin ratio it does not really give you a very, very huge, differentiated margins, it will be in the range of 5-7-8% depending upon which product of cloud you are selling and which brands of cloud you are selling and to which customer or which segment of the market that goes in the range of 5 to 8-9%

S V Krishnan

And just to add on to what Rajiv said, from working capital perspective either no requirement of working capital, so both the businesses re-sell and the services portion in terms of ROCE will be quite attractive. Okay, thanks. My other question was on the net debt and cash balance if you could provide that for Q1? Rajiv Srivastava: Can you repeat I missed your question Please. Could you provide the net debt and cash balance for the quarter? Rajiv Srivastava: The net debt figure end of Q1 is about Rs.744 Crores which is roughly about 0.1 times of negative net debt and the cash balance is about

Q

Thank you for the opportunity and a very good set of numbers, congratulations for that. Sir, two set of questions, one is on the working capital, if I look at the past trend our net working capital typically builds up in Q1 and then kind of tapers down by the end of the year, is that phenomena will likely to play out this year or do you see that it will be stabilized as you mentioned in your opening remark that we are still at a fringe of our guidance of 28 to 35 days, that is one and second on the bidding SISA group, I see that our South and South Asian market is trending towards loss, just w

Chintan Sheth

Sure, and just a bit on Turkey, given the currency de-valuation happened with the past two years and we have still been able to manage both on the revenue growth as well profitability obviously revenue growth on rupee terms will look much better but the profitability is one aspect if you can provide more color to it how we are managing the situation there and what is the way forward there ? Rajiv Srivastava: I was in turkey last week, I spent about 10 days in Turkey and Turkey is a very, very curious state, it is a great country, great people, great commerce, good population, and thus technolo

Q

Just one question Rajiv, we possibly ended FY22 with around Rs.1600 Crores of cloud revenues and keep growing at 45 to 50%, so if that continues should we be a Rs.5000 Crore cloud business by FY25, is there any reason that should not happen. Rajiv Srivastava: If you play it well there is every reason that we can get to those kinds of numbers in the timeframe you are talking about or a year up and down.

Sanjay Dam

And Rajiv, the other question is that when you talked about the margins in the cloud business and the services part as well, services very small I understand, basically cloud at the base starts at 5% kind of EBITDA margin and then according to the kind of complexity it goes up to 7-8% and SaaS is about 25 to 40% range. So, basically the EBITDA margin of this business of a Rs.5000 Crores cloud business whenever it is one year up and down broadly should be the high single digit, would that be a good understanding? Rajiv Srivastava: We will have to do the mix, when do a Rs.5000 Crores cloud busin

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On the trade payable there are two factors that are attached towards the trade payable. One is as our enterprise business or IT volume business keeps going up generally, since the working capital deployment there in the form of inventory and receivable days being more our AP days also tend ot be more. Second, we have also consciously spoken to many of the vendors in terms of increasing the credit days where there is a requirement, take the help of outside financial institutions where it can get extended. These are few options that we have to make sure that our AP days are better, I think that

S V Krishnan

Our objective is to keep that as high as possible, we would feel happy if the trade payable days covers our AR days in the past there were challenges, but we could achieve it in the last few quarters. Our objective is always to make sure AR days is covered by creditors days. Rishabh Choksey: Thank you so much.

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I am Andrey here, I had two question one is in terms of the working capital cycle, how do you compare with the pre-covid era and my second question is could you give us a sense of the seasonality of your sales in terms of a break up of sales into Q1 -Q2-Q3-Q4 in a typical year pattern so that I can understand the quarter-on-quarter mild de-growth better? Rajiv Srivastava: Our seasonality of business is H1 versus H2 is always in the range of 45-47 to 53 in that range, so 47-53 will be the seasonality of business that we have got.

Andrey Purushottam

Okay, the first question was how does your working capital cycle compares with the pre-covid era? Rajiv Srivastava: Right now, it is much better than pre-covid, pre-covid was much higher, pre-covid we were in the range of 40-45 on the working capital days right now it is 28 days, so it is about 40% better than pre-covid. Okay, thank you.