Q2 FY27 results analysis · November 04, 2026
Redington Q2 FY27 Results Analysis: Revenue Surges 48%, Margin Misses Guidance
+39.6%PAT year on year, Rs. 541.32 Cr
Source: Quarterly results filing (BSE)
Quick summary
Redington Ltd's Q2 FY27 numbers came in mixed, with revenue of Rs. 42,946.91 Cr (+47.71% YoY) and PAT growth of +39.58% YoY. Here's a quick read of what worked, what to watch, and what management said.
Quick Details
| Results date | November 04, 2026 |
|---|---|
| Revenue (Q2) | Rs. 42,946.91 Cr (+47.71% YoY) |
| PAT (Q2) | Rs. 541.32 Cr (+39.58% YoY) |
| EBITDA margin | 2.08% (-9 bps YoY) |
| EPS (Q2) | Rs. 6.92 (+39.52% YoY) |
Quarter Snapshot
Revenue accelerated to 47.71% YoY with pre-exceptional PBT up 53.15%, led by SISA's 65.54% growth, but reported quality was diluted by an 80.33 crore Arena impairment, an 844 bps tax-rate jump, and tripling of minority losses. EBITDA margin of 2.08% sits below the guided 2.2%-2.4% ex-Arena band, and H1 operating cash flow turned negative at (2,571.17) crore with borrowings doubling since March. Growth momentum is intact, but margin, cash conversion, and Arena losses are the swing factors to watch.
Q2 FY27 Expectations vs Results
| Driver | Expected before results | What happened | Verdict |
|---|---|---|---|
| Revenue growth | "Revenue growth for the device-led books likely decelerates meaningfully from Q1's +34.57% YoY" | +47.71% YoY — accelerated | Contradicted |
| MEA trajectory | "MEA growth likely stays well below the +15% managed in Q1" | ROW segment revenue +27.38% YoY; country split not in filing — segment proxy contradicts; MEA itself not observable | Partially |
| Ex-Arena EBITDA margin | "likely sits at or below the Q1 derived ~2.28%, at the lower half of the 2.2–2.4% band" | Incl-Arena pre-exceptional margin 2.08% vs 2.15% in Q1 — compressed; ex-Arena split not in filing — direction of compression | Played out |
| Arena loss run-rate | "Rs.60–70 Cr/quarter drag until structural reforms" | NCI loss −118.81 vs −37.63 YoY; fresh Rs.80.33 impairment — worsened | Played out |
| Working capital / FCF | "volume downturn tests a receivables book already running 59 days"; FCF vs Q1's Rs.(995) Cr | H1 CFO (2,571.17); FCF (2,681.46); inventories up Rs.3,672.85 since March | Played out |
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Management Guidance vs Delivery
| What management said | Where | What happened | Verdict |
|---|---|---|---|
| Top & bottom line 15% CAGR over 3–5 years | stated on the Q2 FY26 call | H1 FY27 revenue +41.51% YoY; H1 owners' PAT +54.92% YoY | On track |
| Arena reduced losses in FY27, breakeven thereafter | guided on the Q4 FY26 call | Arena-specific loss not disclosed; NCI loss widened to 118.81 (from 37.63 YoY) and a fresh 80.33 impairment booked | Too early / not yet visible |
| SSG ~$5 Bn revenue, 5.5–6% GM by FY'29 | restated on the Q4 FY26 call | BU split not in filing | Too early |
| "Profit growth significantly outpaced revenue growth" (Q1 FY27 call theme) | Pre-exceptional PBT +53.15% YoY outpaced revenue +47.71% — holds pre-exceptional; reported owners-PAT growth (+39.58%) lagged revenue after impairment and tax | Partially confirmed | |
| Middle East drag expected "through Q1 and potentially Q2" (Q4 FY26 call); no material adverse effect foreseen (Q2 FY27 filing note 6) | ROW margin compressed to 1.42% (from 1.65% YoY) and a fresh Turkey impairment booked; but ROW revenue grew +27.38% and the company states no material adverse effect on financial position is foreseen — profitability drag… | Too early | |
| Arena losses to persist at reduced levels with turnaround later (Q4 FY26 call) | NCI loss more than tripled YoY; fresh 80.33 impairment citing "continued challenging economic environment" | Contradicted so far |
Key Investment Insights
Key Positives
- Consolidated revenue grew 47.71% YoY to 42,946.91 crore and 22.98% QoQ; H1 FY27 revenue up 41.51% YoY
- Standalone revenue grew 66.12% YoY to 25,224.83 crore with PBT up 60.10% YoY
- SISA segment revenue grew 65.54% YoY with segment result up 66.90% YoY and EBIT margin expanding to 2.29% from 2.27%
- Pre-exceptional PBT grew 53.15% YoY, outpacing revenue growth; normalized owners-PAT grew 49.81% YoY
- ROW segment revenue grew 27.38% YoY despite Middle East geopolitical environment
- Operating expenses grew 39.82% YoY, slower than gross profit growth of 40.89% YoY, preserving operating leverage
- Coverage ratios remain comfortable: DSCR 11.27x, interest service coverage 13.08x
- New subsidiaries incorporated in Iraq and Kenya during the quarter, extending footprint
Risk Factors
- Fresh exceptional impairment of 80.33 crore on the Arena (Turkey) trade-name intangible; NCI loss widened to 118.81 crore from 37.63 crore YoY
- Pre-exceptional EBITDA margin compressed to 2.08% from 2.17% YoY and 2.15% QoQ, below the guided 2.2%-2.4% ex-Arena band's low end
- ROW segment margin compressed to 1.42% from 1.65% YoY, with result growth of only 9.42% against 27.38% revenue growth
- H1 FY27 consolidated operating cash flow was negative at (2,571.17) crore vs +737.48 crore in H1 FY26; FCF at (2,681.46) crore
- Effective tax rate jumped to 32.27% from 23.83% YoY, an ~844 bps rise dampening PAT conversion
- Current borrowings more than doubled to 5,992.40 crore since March 2026; standalone debt-equity rose to 0.56x from 0.29x
- Gross-profit proxy margin slipped to 4.76% of revenue from 4.99% YoY amid memory-price inflation pass-through
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