India’s Redington posts 22% fall in quarterly profit on slow tech gadget demand

CHENNAI (Reuters) – India’s Redington reported a 22% decline in quarterly profit on Monday, as the technology gadgets distributor grappled with a global slowdown in demand and higher expenses.

Consolidated profit fell to 3.03 billion rupees ($36.42 million) in the second quarter from 3.87 billion rupees a year earlier.

Total expenses jumped nearly 18% for the quarter ended Sept. 30, Redington, which distributes products of several major brands including Apple and Samsung, said in an exchange filing.

Earnings dropped even as the Chennai, Tamil Nadu-based company tied up with more sales partners and expanded to more countries, which helped revenue from operations climb 16.6% to 222.20 billion rupees.

In the previous four quarters, Redington had reported revenue growth between 24.6% and 30.8%.

Revenue from its consumer and commercial personal computers, print and supplies business in Singapore, India and South Asia – markets that accounted for over 46% of its topline – declined 16% in the reported quarter.

A pandemic-led spurt in demand for consumer electronics including smartphones and laptops has slowed, squeezing the earnings of everyone from chipmaker Qualcomm and smartphone major Apple to distributors such as Redington.

However, Qualcomm and Apple recently indicated smartphone sales slump has finally started to ease, setting them up for better quarters ahead.

Redington has been investing heavily to beef up its cloud services business to expand beyond technology gadgets distribution, which brings in a bulk of its revenue and earnings.

The company’s shares closed 2.3% higher ahead of the results. They are down nearly 19% for the year so far.

($1 = 83.1974 Indian rupees)

(Reporting by Praveen Paramasivam in Chennai; Editing by Eileen Soreng)