Redington Limited has received a significant GST assessment order demanding ₹148.33 crores from tax authorities, the company announced in a regulatory filing. The order was issued by the Additional Commissioner, CGST Gurugram Commissionerate and covers a three-year assessment period. The order was received and uploaded on the GST portal on December 30.

GST Assessment Details

The comprehensive assessment order covers multiple financial years and involves substantial monetary implications:

Nature of Violation

The GST order pertains to the disallowance of input tax credit claims made by Redington during the specified financial years. The assessment was conducted under Section 74 of the Central Goods and Services Tax Act, 2017, along with the Haryana Goods and Services Tax Act, 2017, and applicable rules thereunder.

Input tax credit disallowances typically occur when tax authorities determine that certain credits claimed by companies do not meet the prescribed conditions or documentation requirements under GST regulations.

Company's Response and Impact Assessment

Redington has provided a measured response to the substantial tax demand:

The company stated that there is no impact on its financials, operations or other activities. Based on its assessment and legal advice, Redington said it does not expect the order to have any material financial impact.

Strong Q2 Performance

Despite the regulatory challenge, Redington reported robust financial performance for the quarter ended September:

The company reported consolidated global revenues of ₹29,118 crores for the quarter, marking a 17.00% year-on-year increase. Growth was driven by strong execution across key markets.

Regulatory Compliance

The disclosure was made under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, demonstrating the company's commitment to transparent communication with stakeholders. The detailed information was provided in accordance with SEBI Circular No SEBI/HO/CFD/CFD-PoD-1/P/CIR/2023/123.

Redington shares ended at ₹272.40, down by ₹4.00, or 1.49% on December 31. The company has made the complete order details available on its corporate website for stakeholder reference, ensuring full transparency regarding this regulatory development.

Redington Limited , a leading IT and mobility products distributor, has reported its best-ever quarterly performance for Q2, showcasing robust growth across multiple business segments and geographies.

Financial Highlights

• Revenue reached INR 29,118 crores, marking a 17% year-on-year growth
• Quarterly profit stood at INR 388 crores
• Group PAT (Profit After Tax) at 1.33%, excluding Arena subsidiary at 1.57%
• EBITDA and PAT grew faster than revenues

Geographic Performance

Business Segment Performance

Key Operational Highlights

• Strong execution in the direct-to-retail segment in India
• PC business growth observed in both India and Middle East markets
• Signs of PC refresh cycle and increased AI PC penetration, especially in the commercial space
• Higher enterprise demand driving Technology Solutions growth
• Efficient working capital management, with overall working capital days reduced to 31
• Controlled opex growth at 9%, lower than revenue growth

Software Solutions Group (SSG) Performance

The newly formed SSG, consisting of cloud hyperscaler business, cybersecurity, application software, and professional services, showed impressive growth:

• 48% year-on-year growth
• Contributing 16% to the top line
• Delivered higher-than-average PAT compared to the group

Arena Subsidiary Update

• Arena subsidiary faced challenges, reporting a loss of INR 37 crores
• Company divested Connect Vodafone contract to reduce Turkish lira exposure

Industry Recognition

Redington was awarded the title of number 1 IT distributor in India by VAR India for the third consecutive year, with an increased lead over competitors.

Management Commentary

V.S. Hariharan, Managing Director and Group Chief Executive Officer, stated, "This has been our best quarter so far from a revenue perspective. With a quarterly profit of INR 388 crores, the profitability was the best Q2 ever. It is a continuing story of profitable growth with growth coming back strongly across all business segments and many geographies."

Future Outlook

The company remains optimistic about its growth prospects, particularly in the Software Solutions Group. Management indicated plans to invest in technical presales teams, Redington Academy for training certified professionals, and ecosystem development to bring managed print service providers and ISVs together with products for complete customer solutions.

Redington's strong performance and strategic focus on high-growth areas like cloud, cybersecurity, and AI-driven solutions position it well for continued success in the evolving IT distribution landscape.