Redington Ltd Management Discussions

Global Economy

In 2024, the global economy demonstrated a degree of stability despite navigating a complex environment shaped by numerous economic, geopolitical, and policy challenges. According to the World Economic Outlook by the International Monetary Fund (IMF), the growth of global Gross Domestic Product (GDP) slowed to 3.3%. There were notable differences in growth trends; while developed economies experienced a more gradual rate of expansion, emerging markets, particularly in Asia, continued to show a comparatively robust growth path.

Geopolitical issues such as the ongoing conflict between Russia and Ukraine, disturbances in the Red Sea, ongoing supply chain disruptions, and trade tensions among major economies continued to challenge global economic stability. Additionally, the shifting landscape of climate change policies and regulations impacted investment decisions across various sectors.

Despite these hurdles, the United States economy demonstrated notable strength, achieving a growth rate of 2.8%, bolstered by a robust labor market and easing inflation. In contrast, the Eurozone saw slower growth at 0.9%, with Germany experiencing a slight contraction. Emerging markets, particularly in Asia, maintained a stronger growth trajectory, driven by investments in technology and infrastructure. Chinas economy expanded by 5.0%, supported by government initiatives and a recovering property market.

Global inflation showed signs of improvement, estimated at 5.7% for 2024, down from 6.7% in the previous year. Advanced economies are expected to meet their inflation targets sooner than their emerging market counterparts, where the decline in inflation may be more gradual. Advanced economies recorded an average inflation rate of 2.6% in 2024, with target levels likely to be reached by late 2025, while emerging markets will see a slower yet positive trend.

In response to prevailing economic conditions, leading central banks implemented notable interest rate reductions to stimulate economic activity. December 2024 saw the most significant coordinated series of interest rate cuts among G10 central banks since the pandemic, with total reductions for the year amounting to 825 basis points. This period marked a substantial easing of monetary policy not observed since 2009.

Outlook

The global economy is expected to maintain a steady growth trajectory, with projected expansion rates of 2.8% and 3.0% for 2025 and 2026, respectively.

In the United States, growth is anticipated to fall to 1.8% in 2025 and 1.7% in 2026, influenced by changes in labor market conditions and a decline in consumer spending. The Eurozone is predicted to recover, with growth reaching 0.8% in 2025 and improving to 1.2% in 2026, driven by increased consumer spending and lower inflation rates.

Global inflation is projected to fall to 4.3% in 2025 and further to 3.6% in 2026. Monetary policies are expected to vary across different regions, reflecting the diverse economic conditions. (Source: World Economic Outlook, IMF, Reuters)

Indian Economy

Indias economy has exhibited steady growth and stability during FY 2024-25, reaffirming its position as one of the fastest-growing major economies globally. According to the Second Advanced Estimate (SAE) data from the National Statistical Office (NSO), the real Gross Domestic Product (GDP) grew by 6.5% for FY 2024-25, following an impressive 9.2% growth in the previous financial year. This ongoing growth trend highlights the nations solid economic foundations, beneficial government policies, a flourishing services sector, and robust domestic demand, all of which bolster confidence in Indias long-term growth trajectory.

Significant government reforms and considerable investments in both physical and digital infrastructure, alongside initiatives such as ‘Make in India and the Production-Linked Incentive (PLI) scheme, have been instrumental in enhancing the countrys growth trajectory and promoting self-sufficiency.

The services sector experienced consistent growth of 7.2% during the financial year 2024-25, driven by robust activity across various segments, including finance, real estate, professional services, public administration, and defence, among others.

Indias economic position continues to improve, now ranking as the fifth-largest economy in the world by nominal Gross Domestic Product (GDP) and the third-largest when measured by purchasing power parity (PPP). The nation has set ambitious goals to achieve a $5 trillion economy by FY 2027-28 and a $30 trillion economy by 2047. These objectives are to be realized through significant investments in infrastructure, ongoing reforms, and the widespread integration of technology. The capital investment budget for FY 2025-26 reflects this commitment, increasing to Rs. 11.21 Lakh Crores, which accounts for 3.1% of GDP.

Outlook

Indias economic growth is anticipated to reach 6.2% in FY 2025-26. By 2030, it is projected to become the third-largest economy globally, driven by investments in infrastructure, increased private capital expenditure, and the growth of financial services. Ongoing reforms are expected to support this long-term expansion.

This positive outlook is bolstered by Indias demographic advantages, rising capital investments, proactive government initiatives, and strong consumer demand. Enhanced rural consumption, aided by easing inflation, further reinforces this growth path. The governments focus on capital expenditure, fiscal prudence, and boosting business and consumer confidence is conducive to both investment and consumption.

Programs such as Make in India 2.0, reforms aimed at improving the Ease of Doing Business, and the Production-Linked Incentive (PLI) scheme are intended to enhance infrastructure, manufacturing, and exports, positioning India as a key player in global manufacturing. With inflation projected to meet targets by 2025, a more accommodating monetary policy is expected. Infrastructure development and supportive public policies will facilitate capital formation, while rural demand will benefit from initiatives like the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY).

(Source: PIB, MoSPI, Economic Survey)

Industry Overview

Global Information and Communication Technology Sector (ICT)

The IT industry is entering a phase of substantial growth, driven by technological advancements and shifting market dynamics. Companies that can adapt to these changes and strategically invest in emerging technologies are likely to thrive in this evolving environment.

The global IT landscape is poised for significant growth, with worldwide IT spending projected to reach $5.61 trillion in 2025, reflecting an increase of 9.8% from the previous year. This forecast underscores the ongoing investment in technology as organizations adapt to evolving market demands and technological advancements.

While the overall budget for Chief Information Officers (CIOs) is on the rise, a considerable portion of this increase is expected to offset price hikes in recurrent spending. This trend indicates that nominal spending may not fully translate into real growth, as rising costs could absorb much of the budget expansion. Consequently, CIOs are likely to adjust their expectations regarding true budgetary growth, as all major IT categories are experiencing higher-than-anticipated prices.

($ in Millions)

Category	2024 Spending	2024 YoY growth (%)	2025 Spending	2025 YoY growth (%)
Data Center Systems	3,29,132	39.4	4,05,505	23.2
Devices	7,34,162	6	8,10,234	10.4
Software	10,91,569	12	12,46,842	14.2
IT Services	15,88,121	5.6	17,31,467	9
Communications Services	13,71,787	2.3	14,23,746	3.8
Overall IT	51,14,771	7.7	56,17,794	9.8

(Source: Gartner)

Key segments such as data center systems, devices, and software are anticipated to witness double-digit growth, largely driven by the need for generative AI (GenAI) hardware upgrades. However, despite this investment, the functionality of these upgraded segments may not yet meet the high expectations set by the market. The current trajectory suggests that while organizations will continue to purchase AI-enabled devices, the immediate impact of GenAI on spending may not be as pronounced as initially anticipated.

Spending on AI-optimized servers is expected to significantly outpace traditional server investments, reaching approximately $202 billion in 2025. This shift highlights the growing importance of AI in shaping IT infrastructure and services.

IT services companies and hyperscalers are projected to account for over 70% of total IT spending in 2025. As hyperscalers evolve, they are expected to pivot towards a new business model that aligns with the emerging oligopoly in the AI market, moving beyond traditional infrastructure as a service (IaaS) offering.

The insights provided by industry analysts are based on comprehensive research methodologies that analyze sales data from a wide range of IT vendors. This rigorous approach ensures a detailed understanding of market opportunities and challenges, enabling organizations to navigate the complexities of the IT landscape effectively.

MENA Region ICT Sector

IT spending in the Middle East and North Africa (MENA) region is anticipated to reach $230.7 billion in 2025, marking a growth of 7.4% from the previous year. This upward trend reflects the regions commitment to becoming a leading hub for AI innovation, supported by advancements in cybersecurity and cloud infrastructure that facilitate scalable operations.

Governments and private enterprises in MENA are significantly increasing their investments in technology to enhance their competitive edge. This includes a strong focus on research and development aimed at creating innovative business models, improving customer experiences, and cultivating a skilled workforce. Such initiatives are expected to further stimulate IT spending across the region.

Data center systems are projected to experience the highest growth rate within the IT sector, with an increase of 14.9% in 2025. Chief Information Officers (CIOs) in MENA are expected to allocate more resources to data center technologies to accommodate the rising adoption of AI and cloud services, as well as the growing demand for data storage and processing capabilities. Major hyperscalers in the region are also investing in data center systems to establish sustainable and scalable AI-integrated cloud infrastructures, which will contribute to the expansion of this segment.

MENA Region IT Spending Forecast

($ in Millions)

Category	2024 Spending	2024 YoY growth (%)	2025 Spending	2025 YoY growth (%)
Data Center Systems	5,557	14.9	6,382	14.9
Devices	33,969	13.4	36,052	6.1
Software	17,581	12.3	19,984	13.7
IT Services	25,158	7.5	27,393	8.9
Communications Services	1,32,688	6.9	1,40,981	6.2
Overall IT	2,14,953	8.6	2,30,792	7.4

(Source: Gartner)

In addition, software spending in MENA is expected to grow by 13.7% in 2025, driven by increased investments in GenAI-enabled applications. CIOs are focusing on enhancing the digital workplace, customer experience, and overall product and service quality through the integration of GenAI applications, cloud services, and cybersecurity solutions. This strategic approach aims to ensure safe and accelerated innovation, providing a competitive advantage in the market.

As organizations gain insights from their initial GenAI pilot projects, CIOs are expected to adopt a more targeted strategy for their GenAI investments. This shift is informed by the lessons learned regarding the complexities and challenges associated with data management and the balance between cost and value in these initiatives. To overcome these challenges, CIOs will need to align their GenAI use cases with business priorities and invest in data literacy to maximize the benefits of their technology investments.

The methodology behind Gartners IT spending forecast is grounded in thorough analysis of sales data from a diverse range of IT vendors. This comprehensive approach enables a nuanced understanding of market dynamics, helping organizations identify opportunities and navigate challenges effectively.

Indian Region ICT Sector

Indias IT spending is projected to reach $160 billion in 2025, reflecting an increase of 11.2% from the previous year. This growth is indicative of the expanding role of technology in driving business innovation and operational efficiency across various sectors.

In 2025, Chief Information Officers (CIOs) in India are expected to allocate budgets for GenAI initiatives beyond initial proof-of-concept projects. While there will be an increase in spending on GenAI, expectations regarding its capabilities may temper as organizations gain a clearer understanding of its practical applications. Additionally, significant investments are anticipated in areas such as cybersecurity, business intelligence, and data analytics, highlighting a shift towards enhancing security and data-driven decision-making.

Software spending in India is set to experience the highest growth rate, with an anticipated increase of 17% in 2025. This surge is driven by the expansion of both application and infrastructure software markets, particularly as GenAI-enabled solutions gain traction. The price premium associated with GenAI offerings in customer relationship management (CRM), email, and analytics platforms is expected to further stimulate software spending, as more than 50% of application software with GenAI capabilities will likely carry an associated price premium.

Indian Region IT Spending Forecast

Category	2024 Spending	2024 YoY growth (%)	2025 Spending	2025 YoY growth (%)
Data Center Systems	4,310	12.9	4,798	11.3
Devices	55,907	13.0	63,105	12.9
Software	17,904	15.7	20,945	17.0
IT Services	30,065	8.8	33,503	11.4
Communications Services	35,713	5.0	37,608	5.3
Overall IT	1,43,899	10.3	1,59,959	11.2

Despite a cautious global services market characterized by macroeconomic uncertainty and rising capital costs, IT services spending in India is projected to grow by 11.4% in 2025. This growth will be propelled by service engagements related to cloud computing, application development, and consulting. The integration of GenAI into industry-specific use cases is anticipated to enhance productivity and drive further investment in IT services.

Moreover, spending on data center systems in India is expected to reach $4.7 billion in 2025, driven by the increasing demand for infrastructure that supports AI integration. Data center providers, including hyperscalers, are expanding their operations in India to meet the growing enterprise need for enhanced data storage and computing capacity while adhering to regulatory requirements.

Global Consumer IT PC Market Dynamics

In 2024, the global PC market demonstrated resilience, with shipments totaling approximately 250.4 million units, marking a 3.5% increase from the previous year. This growth was largely driven by the rising integration of artificial intelligence (AI) capabilities into personal computers. AI PCs, equipped with dedicated neural processing units (NPUs), accounted for 22% of total PC shipments, reflecting a significant shift towards more intelligent computing solutions. This trend is expected to continue, with projections indicating that AI PCs will become standard as software developers leverage on-device AI to enhance user experiences.

AI-Capable PCs

The definition of AI-capable PCs has evolved to include devices with specialized hardware designed to efficiently handle AI workloads locally. This advancement enables features such as real-time language translation and enhanced security protocols. As the industry progresses, the integration of AI is anticipated to become a fundamental component of PC architecture, driving innovation and offering users more personalized and efficient computing experiences.

Items	2023	2024	2025
	Shipments	Shipments	Shipments
AI Laptops	20,136	40,520	1,02,421
AI Desktops	1,396	2,507	11,804
AI PC Units Total	21,532	43,027	1,14,225

In 2024, AI PC shipments reached 43 million units, accounting for 22% of all PC shipments, marking a 99.8% increase from 2023. This momentum is expected to continue, with forecasts indicating that by 2025, AI PC shipments will total 114 million units, representing 43% of all PC shipments. Notably, AI laptops are anticipated to dominate, comprising 51% of total laptop shipments in 2025. Gartner defines AI PCs as devices equipped with embedded neural processing units (NPUs) designed to optimize and accelerate AI tasks on the device, enhancing performance and efficiency without relying on external servers or cloud services. (Source: Al Bawaba, Gartner)

Enterprise and Cloud

The global cloud computing market experienced substantial growth, with end-user spending on public cloud services recorded at $678.8 billion in 2024, a 20.4% increase from the previous year. This surge is primarily attributed to the widespread adoption of GenAI services, which leverage the scalability and flexibility of cloud infrastructures. Infrastructure-as-a-Service (IaaS) and Platform-as-a-Service (PaaS) segments led this expansion, underscoring the critical role of cloud technologies in modern business operations.

The enterprise landscape is witnessing significant growth in AI-driven devices. Gartner predicts that by 2026, AI laptops will be the only laptop choice available to large businesses, up from less than 5% in 2023. This shift underscores the increasing reliance on AI capabilities to drive innovation, scalability, and agility in organizations globally. (Source: Gartner)

Mobility

The smartphone industry witnessed a transformative shift with the introduction of GenAI smartphones. Shipments of GenAI smartphones reached 240 million units by the end of 2024, representing 22% of basic and premium smartphone shipments, a substantial increase from 29 million units in 2023. GenAI smartphones are equipped with hardware and software capabilities that enable seamless integration and efficient execution of AI-driven features and applications directly on the device.

Despite this growth, the overall impact on smartphone demand remained moderate, as consumers awaited more compelling applications to justify upgrades. The integration of AI into smartphones is poised to enhance user experiences significantly, with future developments expected to introduce groundbreaking functionalities that will drive higher adoption rates. (Source: Gartner)

Indian Consumer IT

In FY 2024-25, the Indian PC Market, which includes desktops, notebooks, and tablets, experienced a notable year-on-year growth of 12%, with total shipments reaching 6.3 million units. This growth was significantly driven by a remarkable 49% increase in tablet shipments, which amounted to 1.9 million units. Notebook shipments also showed steady progress, rising by 3% to 3.5 million units, while desktop shipments faced a decline of 12%, falling to 7,80,000 units. Excluding tablets, the Indian PC market remained relatively stable, showing flat Y-o-Y performance. The commercial segment performed well, with a 2% increase driven by strong demand from the enterprise sector. However, the consumer segment experienced a slight decline, primarily due to overstocking from the previous year, which led vendors to adopt a more cautious inventory strategy. Despite this, aggressive discounts towards the end of the quarter, particularly in online channels, helped mitigate the overall decline.

The tablet market, on the other hand, saw an impressive surge, marking its best-ever quarter with a 49% Y-o-Y growth. This increase was largely attributed to the completion of the Uttar Pradesh education tender by major players like Samsung and Acer, which significantly boosted the education segment, resulting in triple-digit growth. Additionally, an early start to online festive sales and steady stock levels in online channels contributed to a 7% Y-o-Y growth in consumer tablet sales.

The tablet segment will continue to be significantly influenced by government-driven education tenders, with a substantial influx of tenders expected in the coming quarters. Government initiatives are playing a pivotal role in shaping the PC and tablet market, with new policies mandating that vendors and original equipment manufacturers (OEMs) ensure that 50% of devices are locally sourced to participate in government tenders. This regulation is expected to strengthen the "Make in India" initiative, providing domestic manufacturers with a competitive advantage over international counterparts. While this policy presents short-term challenges related to infrastructure and supply chain readiness, it is ultimately positioned to reduce import dependency and bolster local manufacturing.

Enterprise and Cloud

The Indian public cloud services (PCS) market is experiencing robust growth, driven by digital transformation initiatives and the increasing adoption of cloud-native solutions. In the first half of 2024, the market generated revenue totaling $5.2 billion. This upward trajectory is expected to continue, with projections estimating the market will reach $25.5 billion by 2028, growing at a compound annual growth rate (CAGR) of 24.3% from 2023 to 2028. (Source: IDC)

Software as a Service (SaaS) remains the largest segment within the PCS market, followed by Infrastructure as a Service (IaaS) and Platform as a Service (PaaS). Key drivers of this growth include enterprises investments in modernizing applications,

Segment	2023 shipments	2024 shipments	2025 shipments	2024 annual growth	2025 annual growth
Consumer	6,017	6,434	6,997	7%	9%
Commercial	6,824	7,341	8,273	8%	13%
Government	236	272	332	16%	22%
Education	430	571	527	33%	-8%
Total	13,507	14,618	16,129	8%	10%

India desktop and notebook forecast developing cloud-native solutions, and exploring AI-driven technologies. GenAI tools, including chatbots and conversational AI, are gaining traction for applications such as cost optimization, application development, and workload testing. Leading cloud service providers are making significant investments in India, underscoring their confidence in the markets potential. Traditional segments like IaaS, collaborative applications, Customer Relationship Management (CRM), and Enterprise Resource Management (ERM) continue to drive growth, while there is also a surge in demand for AI and data management offerings, reflecting evolving customer needs in cloud services.

AI Capable PC

The advent of AI-enabled PC is anticipated to significantly influence the Indian PC market. These devices are poised to enhance accessibility and content relevance by facilitating engagement in native languages. Experts suggest that this trend presents a substantial opportunity for small and medium enterprises (SMEs) within India. Given that these organizations often defer regular IT infrastructure upgrades, the transition to AI PCs offers a compelling value proposition by demonstrably reducing their input costs. Furthermore, the integration of AI PCs across enterprise environments is expected to optimize workforce productivity, thereby enabling organizations to derive maximum output from their employed personnel. (Source: Business Standards)

Mobility

In 2024, the Indian smartphone market exhibited a modest growth trajectory, with shipments reaching approximately 151 million units, marking a 4% year-over-year (YoY) increase. This growth was primarily driven by a 7% increase in the first half of the year, while the second half experienced a deceleration to 2%. Notably, 5G smartphones accounted for a significant portion of this growth, with shipments totaling 120 million units, representing 79% of the total smartphone market - an increase from 55% in 2023. The average selling price (ASP) of 5G devices declined by 19% YoY to $303, facilitating broader adoption. (Source: TelecomLead, The New Indian Express)

In terms of market share, Apple emerged as a significant player, shipping a record 12 million units and achieving a 10% market share, positioning it as the fourth-largest brand in India. The premium segment (devices priced above $600) experienced notable growth, reflecting a consumer shift towards higher-end models. However, despite these gains, brands faced challenges related to inventory accumulation, particularly during the festive season, due to subdued mass-market demand. (Source: TelecomLead, Canalys)

The Indian smartphone market is positioned for continued evolution, influenced by several key trends. Original Equipment Manufacturers (OEMs) are increasingly focusing on enhancing the Colour, Material, and Finish (CMF) of devices to attract consumers across various price segments. Advancements in audio-visual technologies, such as Dolby Atmos and Dolby Vision, are expected to enrich multimedia experiences, catering to the growing demand for high-quality content consumption. The integration of GenAI technologies is anticipated to revolutionize content creation and digital assistants, offering more personalized and intelligent functionalities. Additionally, foldable smartphones are gaining traction in the premium market segment, with shipments projected to exceed one million units in 2024, indicating a growing preference for innovative form factors.

Digital and 3D Printing

Indias digital and 3D printing sector has experienced substantial growth in FY 2024-25, driven by technological advancements and increased adoption across various industries. The market was valued at approximately $707 million in 2024, with projections indicating a rise to $4,330 million by 2033, reflecting a compound annual growth rate (CAGR) of 21.7% from 2025 to 2033. (Source: IMARC)

This expansion is attributed to the integration of additive manufacturing in sectors such as automotive, aerospace, healthcare, and construction. The Indian governments initiatives, including the "National Strategy for Additive Manufacturing," aim to position the country as a global hub for 3D printing technologies. These efforts are complemented by the emergence of a robust startup ecosystem and increased investments in research and development.

Despite the promising growth, challenges persist. High initial costs for equipment and materials, coupled with a lack of standardization and skilled workforce, hinder widespread adoption. However, ongoing efforts to address these issues are expected to facilitate further industry development.

Looking ahead, the Indian digital and 3D printing industry is poised for continued growth. The market is expected to benefit from increased demand for customized products, advancements in printing technologies, and the expansion of application areas. Government support and private sector investments are likely to play pivotal roles in overcoming existing challenges and promoting innovation.

As the industry matures, a focus on developing a skilled workforce and establishing standardized protocols will be crucial. Collaborations between academia, industry, and government bodies are anticipated to drive research and development, leading to the creation of cost-effective and efficient solutions.

Solar Energy

Indias solar energy sector has witnessed remarkable growth in FY 2024-25, driven by supportive government policies, technological advancements, and increasing investments. The cumulative installed solar capacity reached approximately 97.9 GW in 2024, with 24.5 GW added during the year, more than doubling the additions compared to 2023. This expansion underscores Indias commitment to achieving its renewable energy targets. (Source: infolink-group.com, Reuters)

The market size of Indias solar energy sector was valued at around $45 billion in 2024, with projections indicating a growth to $1,254 billion by 2033, reflecting a compound annual growth rate (CAGR) of 41.5%. This growth is attributed to increased adoption across residential, commercial, and industrial segments, along with favorable government incentives. (Source: Custom Market Insights)

Large-scale solar installations accounted for 87% of the new capacity additions in 2024, while rooftop solar contributed 13%. Solar energy represented 73% of the new power capacity added in the country during the year. States like Rajasthan, Gujarat, and Maharashtra led in large-scale solar installations, highlighting regional contributions to the national solar capacity. (Source: Mercomindia.com)

Solar energy, a renewable and abundant resource, is harnessed through technologies like solar panels. It converts sunlight into electricity via photovoltaic (PV) cells or provides direct heating and lighting. This clean energy source significantly aids in reducing greenhouse gas emissions and pollution, contributing to energy security, economic development, and environmental protection, aligning directly with Indias ambitious target of achieving 500 GW of non-fossil fuel capacity by 2030. (Source: Reuters)

Policy measures, such as the mandate requiring the use of locally-made solar cells in clean energy projects from June 2026, are expected to boost domestic manufacturing and reduce reliance on imports. Additionally, the governments financial commitment of $386 billion towards expanding renewable capacity underscores its dedication to the sectors growth. (Source: Reuters)

Challenges remain, including the need for effective waste management of solar panels and the development of adequate battery storage solutions. However, with continued policy support, technological advancements, and private sector participation, Indias solar energy sector is well-positioned to achieve its ambitious goals in future.

Opportunities and Threats

The technology distribution sector is experiencing a period of significant expansion and transformation, driven by ongoing digital transformation across all levels of society and business. Government initiatives such as ‘Digital India, ‘Make in India, Smart Cities, UAE Digital Government Strategy 2025, and Saudi Vision 2030 further stimulate demand for technology solutions. This environment creates substantial opportunities for value-added distribution services beyond traditional box-selling, fueled by the growing adoption of advanced digital technologies like Cloud Computing, Artificial Intelligence (AI), the Internet of Things (IoT), and cybersecurity solutions by enterprises and Small and Medium Businesses (SMBs). Furthermore, Indias emergence as a global manufacturing hub and a key destination for Global Capability Centers (GCCs) translates into increased demand for integrated technology solutions and complex supply chain support, enabling distributors to move into higher-margin services.

Within this promising landscape, Redington is strategically positioned for continued growth and market leadership. The Company is actively expanding its global footprint, strategically entering new markets in CIS countries, South Africa, and the ASEAN region, following thorough assessments to ensure sustainable, value-accretive expansion. A core pillar of Redingtons strategy is to capitalize on the rapid evolution of technology, particularly in the burgeoning software, cloud, and Artificial Intelligence (AI) sectors. The Company is investing in advanced platforms and scaling its professional and managed services to meet the growing demand for cloud-based solutions and AI-enabled hardware and software. Beyond this, the Company recognizes immense untapped potential in increasing PC penetration in developing economies, which represents a substantial addressable market for the Company. Redington also remains agile in pursuing inorganic growth. Furthermore, the Company is pioneering efforts in emerging areas like the recycling market, leveraging its extensive channel network and brand relationships to unlock new revenue streams.

Despite these significant opportunities, the industry faces several inherent challenges that the Company continuously monitors and mitigates. These risks are not new to our industry. We have successfully navigated them in the past and have a strong track record of mitigating their impact. Intense competition and resulting price pressure from both manufacturers and customers can compress profit margins. The rapid pace of technological change demands continuous investment in training and upgrading product portfolios, creating a challenge for distributors to stay current. Supply chain disruptions, often driven by global events, geopolitical tensions, or raw material shortages, can lead to increased lead times, fluctuating prices, and difficulty in managing inventory. Operating across diverse geographies, many of which are susceptible to geopolitical tensions, introduces an element of unpredictability to Redingtons business. Furthermore, as a fundamental aspect of its distribution model, the Company assumes credit risk by extending credit to its channel partners, alongside managing inventory risk associated with maintaining product stock and vendor commitments. Foreign exchange fluctuations across Redingtons extensive international operations also pose a significant financial risk. The ongoing trend of brand consolidation means that many technology brands are seeking fewer distributors, necessitating Redingtons continued investment in scale and differentiation to maintain its strategic partnerships. Additionally, a persistent skill gap in emerging technologies can hinder the ability to provide advanced support and services, while cybersecurity concerns and the need for compliance with evolving data privacy regulations add complexity and cost to operations.

Standalone Financial Performance

The standalone financial statements of the Group have been prepared in accordance with the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Companies Act, 2013 ("the Act") read with the Companies (Indian Accounting Standards) Rules, as amended from time to time.

The standalone financial statements are presented in Indian Rupees (). Financial information has been rounded off to the nearest Crore unless otherwise indicated.

Financial year 2024-25 has been a year of robust growth in both revenue and profitability due to favorable market conditions and continuing strong partnership.

This being an analysis of the standalone business performance, dividend income from subsidiaries has not been considered.

Revenue

Revenue grew by 18.6% during the financial year 2024-25 with a CAGR of 21.3% for 5 years.

The growth was largely driven by the mobility and enterprise segments, which grew by 28% and 15%, respectively, due to favorable market conditions and new product launches. We have achieved stable growth across all segments except solar where there was a degrowth.

y Variable cost such as warehousing, freight & insurance increased by 3.9% over previous year. y Factoring cost has doubled due to non-recourse factoring of large deals where extended credit period was offered.

Company continues to perform periodic reviews and follow effective cost control measures to minimize the cost. Notable cost savings are as below: y Sales promotion expense decreased by 43.6% over previous year and these are majorly compensated by the vendors and hence does not affect the profitability of the Company. y Consultancy charges decreased by 24% over previous year due to efficient resource utilization. y Travel expense was controlled and reduced by 10.3%.

Gross Margin

Gross margin decreased from 4.2% to 3.9% mainly due to increased share of revenue in mobility segment during the financial year 2024-25 as compared to financial year 2023-24. Few vendors reduced the rebate % which could not be immediately passed on to the customer. The company had taken a few large contracts with lower gross margin and minimum capital deployment which resulted in slightly lower gross margin % and healthy PAT%.

Expenses

Employee benefit expenses

Employee cost increased by 11.6% and remained at 0.6% of revenue. Increase is on account of:

y Annual increments awarded during the normal course of business.

y Full year impact of investment made in financial year 2023-24 in cloud and mobility segment.

Other expenses

Other expenses increased by 5.9% during the financial year 2024-25, and was at 0.9% of revenue in financial year 2024-25 (1.1% in financial year 2023-24). This increase is lower than revenue growth of 18.6% due to:

EBITDA

EBITDA grew by 11% as against revenue growth of 18.6%, due to revenue growth in all segments other than solar segment. Reduced EBITDA growth is due to reduced gross margins (as explained above). However, the costs were effectively controlled to reduce the impact on EBITDA%.

The EBITDA CAGR over a 5-year period is at 23.8% as against revenue CAGR of 21.3% which signifies effective leverage of expenses.

Finance costs

Finance costs substantially decreased by Rs. 47.36 Crores on account of decrease in average working capital due to sales mix, lower deployment of capital in large deals and effective working capital management. Average borrowing rate marginally reduced to 7.3% from 7.4% in the previous financial year. Interest coverage ratio has increased from 6.1 times in 2023-24 to 9.0 times in 2024-25, on account of decrease in finance cost and increase in EBITDA.

The closing borrowings chart is depicted below:

Profit before tax (PBT)

PBT grew by 18.5% as against 18.6% in revenue and 11.0% in EBITDA. Reduction in finance costs improved PBT growth % as compared to EBITDA growth %.

Profit after tax (PAT)

PAT grew by 19.9% in line with PBT growth of 18.5%. This was mainly driven by revenue growth, cost optimization actions and effective working capital management.

*Gain on sale of Ensure of Rs. 26.1 Crores in FY 2020-21 is excluded

Cash flow statement

Operating activity

Cash generated from operating activity during the financial year 2024-25 was Rs. 94 Crores on account of profits and marginal reduction in working capital days.

Financing activity

The Company utilized cash from operating activities to repay borrowings which resulted in outflow of Rs. 834.7 Crores.

Shareholders Funds

Shareholder funds increased from Rs. 3,624.3 Crores as on March 31, 2024, to Rs. 4,586.7 Crores as on March 31, 2025, on account of profit after tax of Rs. 1,443.8 Crores (including dividend income) earned during the year.

Dividend

The Company has been consistently declaring dividend over the years. The Board of Directors at their meeting held on May 19, 2025, has recommended a dividend of Rs. 6.8 per equity share (340% of face value) subject to the approval of shareholders in the ensuing Annual General Meeting.

Book value per share

The book value per share increased to Rs. 58.7 from Rs. 46.4, due to growth in profits.

*Financial year 2020-21 adjusted for bonus shares issued during FY 2021-22

Earnings per share

The earnings per share (EPS) grew by 33.6% for the year ended March 31, 2025. EPS increased to Rs. 18.47 from Rs. 13.83 due to growth in profits including dividend income.

Key Metrics:

Particulars	FY 2024-25	FY 2023-24
Return on average capital employed (Gross) (%)	23.5	25.4
Return on average capital employed (Net of cash) (%)	24.1	26.4
Return on average equity (%)	17.5	17.7
Debtor turnover ratio (no. of times)	6.5	6.7
Inventory turnover ratio (no. of times)	17.5	15.8
Creditor turnover ratio (no. of times)	8.1	8.3
Current ratio (no. of times)	1.4	1.4
Net debt equity ratio (no. of times)	0.3	0.5
Operating profit margin (%)	2.3	2.6
Net profit margin (%)	1.5	1.6

Consolidated Financial Performance

The consolidated financial statements of the Group have been prepared in accordance with the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Companies Act, 2013 ("the Act") read with the Companies (Indian Accounting Standards) Rules, as amended from time to time.

The consolidated financial statements are presented in Indian Rupees (), which is the functional or presentation currency. Financial information has been rounded off to the nearest Crore unless otherwise indicated.

Segment-wise Performance

The Group has identified "SISA (Singapore, India & South Asia)" and "ROW" (Rest of the World) as operating segments, in accordance with Ind AS 108. The reported operating segments: y Engage in business activities from which the Group earns revenues and incurs expenses. y Have their operating results regularly reviewed by the entitys chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance. y Have discrete financial information available.

Analysis of the Consolidated Financial Performance

In the financial year 2024-25, the Group registered growth in revenue and profits in all the major markets due to favorable market conditions and strong relationships with the partners, besides control on overheads and finance costs.

Revenue

Consolidated revenue grew by 11.1% during the financial year 2024-25 with a CAGR of 14.1% for 5 years. Revenue growth at a constant exchange rate (not attributable to depreciation in Indian Rupee) was at 9.9%.

The Group registered double-digit growth in this financial year due to strong growth of 16% in Enterprise, 10% in Mobility and 43% in Cloud, suggestive of market potential in these segments. The consumer segment grew by 7% due to reduced demand post-covid period. The services business registered a growth of 18%.

During the year, SISA registered a robust revenue growth of 18.1%, thereby increasing its contribution to 50%, while ROW grew by 4.8%. ROW revenue growth at a constant exchange rate was 2.7%.

Gross Margin

Gross margin grew by 2.2% (5.5% of revenue) during the financial year 2024-25 over the financial year 2023-24 (5.9% of revenue). Gross margin at constant exchange rate grew by 1%.

Gross margin % dropped in both SISA & ROW segments. SISA segment gross margin dropped to 4.9% over the previous financial year 2023-24 (5.2%) & ROW segment gross margin dropped to 6.1% over the previous financial year (6.6%). The drop is primarily due to revenue mix, competitive pricing and large deals in the Enterprise space.

Expenses

The consolidated expenses (including Depreciation & Amortisation and Impairment loss on Goodwill) increased by 1.2% in the financial year 2024-25. The consolidated expenses decreased at a constant exchange rate by 0.2%.

Employee Benefit Expenses

Employee cost for the financial year 2024-25 increased by 10.4% (8.7% at constant exchange rate) and was at 1.4% of revenue in line with the previous year.

The increase at the group level is due to increments awarded during the normal course of business, in addition to inflationary adjustments in Turkey.

The Group continues to exercise caution on increases in employee cost and headcount across geographies.

Other Expenses

Other expenses, excluding depreciation and amortization, decreased by 6.9% in the financial year 2024-25 (8% reduction at constant exchange rate) with a CAGR of 11.8% vis-?-vis Revenue CAGR of 14.1% for 5 years. Reduction in Other expenses, excluding the impact of Impairment loss on Goodwill, was 8.2%.

The decrease is on account of: y Reduction in Factoring charges by 37.5% with lower factoring of Turkish Lira receivables in Arena. y Sales promotion expenses lower by 23.4%, which is largely compensated by vendors and hence does not affect the profitability of the Group.

EBITDA

EBITDA grew by 5.4% (4.4% at constant exchange rate) compared to GM growth of 2.2% (1% at constant exchange rate) during the financial year 2024-25 with a CAGR of 16.1% over the past 5 years. Growth is primarily due to lower overhead growth, as explained above.

EBITDA contribution by geography:

Finance Costs

Finance costs decreased by Rs. 55.1 Crores on account of decrease in interest rates across geographies besides reduction in average working capital days in India contributing to lower utilization during FY 2024-25.

The reduction in Finance costs was 14.3% (15.3% at a constant exchange rate) during the FY 2024-25.

The closing borrowings are depicted below:

Interest cover ratio is at 6.2 times during the FY 2024-25 as against 5.1 times during the previous financial year, due to lower finance cost & growth in EBITDA as explained above.

Profit before exceptional item & tax (PBT)

PBT grew by 8.5% during the financial year (7.6% at constant exchange rate) aided by de-growth in finance costs

Overheads CAGR of 11.8%, along with finance costs CAGR of 8.6%, is lower than revenue CAGR of 14.1% due to operational efficiencies achieved by the Group, resulting in a healthy PBT CAGR of 19.8% over a period of 5 years.

Profit After Tax (PAT)

PAT grew by 9.9% during FY 2024-25 (8.9% at constant exchange rate) after considering share of non-controlling interests.

Cash flow

Free cash flow (post dividend payout) was negative at Rs. 671.9 Crores.

Operating activity

Cash generated from operating activity was Rs. 292.6 Crores, with higher profits despite an increase in working capital by 2 days. Comparative working capital days are given below:

Investing activity

Cash generated from investment activity was Rs. 559.9 Crores. Cash generation was primarily from: y Proceeds from disposal of subsidiary ( 641.5 Crores) y Interest from deposits ( 85.2 Crores)

Financing activity

Cash flow from financing activity was negative at Rs. 1,171.1 Crores due to repayment of borrowings, finance cost & dividend payout.

Key Metrics

Particulars	FY 2024-25	FY 2023-24
Return on average capital employed (Gross) (%)*	18.3	18.7
Return on average capital employed (Net of cash) (%)*	21.1	22.6
Return on average equity (%) *	16.9 ^	17.0
Debtor turnover ratio (no. of times)	5.7	6.4
Inventory turnover ratio (no. of times)	15.0	12.7
Creditor turnover ratio (no. of times)	7.0	7.1
Current ratio (no. of times)	1.5	1.4
Net debt equity ratio (no. of times) **	0.1	0.2
Operating profit margin (%)	2.0	2.2
Net profit margin (%)	1.3^	1.4

* Goodwill has been excluded, and Capital reserve has been included for computations.

** Equity represents equity attributable to the shareholders of the Group. Goodwill has been excluded, and capital reserve has been included to compute the net debt-equity ratio.

^ excludes post-tax gain from Paynet divestment (refer note 36 to Consolidated Financial Statements)

Book Value per share (BVPS)

Book value per share increased by Rs. 11.7 due to higher EPS (Earnings per share) of Rs. 17.1.

Earnings Per Share (EPS)

EPS increased in the financial year 2024-25 due to profit growth at the Group level with a CAGR of 21%.

^ excludes post-tax gain from Paynet divestment (refer to note 36 to Consolidated Financial Statements)

Dividend

The Board has recommended a dividend of 6.80 (340%) per equity share of 2/- each for the year ended March 31, 2025, subject to the approval of shareholders of the company at the ensuing Annual General Meeting (AGM). The dividend will be paid within 30 days from the date of the ensuing AGM of the Company. The Record date for payment of dividend, as recommended by the Board, is fixed as July 4, 2025.

Below is the Dividend Payout % on Group Profits over the last 6 years.

^ excludes post-tax gain from Paynet divestment (refer to note 36 to Consolidated Financial Statements)

Human Resources

At Redington, we firmly believe that our employees are one of our strongest pillars of strength and a key source of competitive advantage. In FY 2024-25, we continued to invest in initiatives focused on employee well-being, skill development, compliance orientation, and overall human excellence.

To support employee health and wellness, we expanded our wellness programs beyond regular orientations and health camps. All employees are encouraged to undergo an annual health check-up, made possible through partnerships with leading healthcare aggregators, clinics, and hospitals nationwide.

Comprehensive coverage is provided under Health Insurance, Personal Accident, and Term Life policies.

In a dynamic techno-global business environment, continuous learning and compliance are crucial. Redington introduced a new Learning Management System (LMS), ‘Redington Learning Academy, powered by the SumTotal platform, to enhance employee engagement in learning. We have also provided company-wide access to LinkedIn Learning Hub, an AI-powered platform offering over 10,000 courses in technology, soft skills, and functional domains. Our employees have logged an impressive average of 50 learning hours during the fiscal year.

To promote compliance awareness, we developed a global Code of Business Conduct (COBC) e-module. Completion of the module and its associated assessment is mandatory for all employees.

Recognizing the importance of an inclusive workplace, Redington has established a Global DEI Council and embedded DEI principles into our leadership training and day-to-day operations. Regular DEI orientation sessions are conducted for managers, and processes have been redefined to reflect inclusivity. Feedback from our women employees, captured through our Employee Engagement Survey, validates and aligns with our DEI initiatives.

Redington remains steadfast in its belief that human capital is our most valuable asset and true differentiator. We take pride in enabling our employees aspirations and remain committed to fostering a culture of continuous development, inclusion, and excellence.

The total number of employees of Redington Limited as of March 31, 2025 was 1,854.

Internal Control System and their Adequacy

A brief note on internal control systems is enclosed as a part of the Boards Report which forms a part of this Annual Report.

Risk Management

The Risk Management Committee evaluates the significant internal and external risks and ensures that appropriate methodology, processes and systems are in place to monitor and evaluate risks associated with the business of the Company. The Board of Directors reviewed the risk assessment and procedures adopted by the Company for risk control and management and is of the opinion that there are no risks that may threaten the existence of the Company. The terms of reference of the Risk Management Committee and activities of the Committee during the year are elaborated in the Corporate Governance Report.

Cautionary Statement

Please note that some statements in the Management Discussion and Analysis (MDA) section regarding future prospects are forward-looking. These involve inherent risks and uncertainties, both identified and not, which could cause actual results to differ significantly. Unforeseen risks, such as changes in the macro environment or global pandemics like COVID-19, may also impact the Company and its operations. The figures in this Report are based on assumptions from currently available internal and external information. As underlying factors can change, these estimates are also subject to revision. These forward-looking statements reflect the Companys intentions, beliefs, or expectations only as of their date, and the Company is not obligated to revise or update them based on new information or future events.