Small cap stock: Vanguard nearly doubles stake in this leading iPhone distributor

Synopsis: Redington attracts strong institutional confidence: FII 61.94%, DII 17.28%, public 20.73%; Vanguard nearly doubled stake from 1.1% to 2.1%, highlighting conviction in India’s iPhone distributor.

One of the largest distributors of iPhones in India has consolidated its position across technology distribution by combining massive scale with an asset-light execution model. Strong relationships across global OEMs, rapid growth in cloud and software segments, and improving financial performance have been drawing greater attention from large institutional investors, which indicates confidence in its governance, cash flows, and visibility of its long-term earnings.

With the market cap of Rs 20,626 crore, the shares of Redington Ltd have closed at Rs 264. The shares are trading at a PE of 15.6, whereas its industry PE is at 36.4, and the shares have given a return of 279% over the last 5 years, and the stock price CAGR is 32% for 5 years. 

Business Overview: Largest iPhone & Tech Distributor in India

Redington is a technology distributor with operations across 40 markets, ranking Redington among the biggest distributors in the emerging markets today. In India, it is the largest distributor of iPhones, whereas globally, it is the distributor of products from about 450 brands, including Apple, Samsung, HP, Dell, Lenovo, Cisco, AWS, and Microsoft. It has an asset-light but execution-heavy business model in the areas of mobility, IT hardware, cloud, software, logistics, and managed services.

Scale, Network Strength and Operating Moat

The moat for Redington lies in its unparalleled distribution infrastructure: more than 75,000 channel partners, 186 warehouses, and 66 sales offices. The top 10 brands contribute  about 80% of revenues, reflecting deep OEM relationships and preferred distributor status. Its ability to manage inventory risk, provide channel financing, and execute large-scale launches gives Redington a structural advantage, particularly in high-velocity categories like smartphones and enterprise hardware.

Institutional Ownership and Governance Comfort

It is a professionally managed and non-promoter company, and according to SEBI, the company has “no promoter”. As of December 2025, FIIs have 61.94%, DIIs have 17.28%, and the public has a 20.73% stake in the company. The fact that global institutional investors have made long-term investments, with Vanguard having almost doubled its holdings from 1.1% to 2.1%, helps maintain confidence in the governance structure, cash flows, and earnings sustainability.

Financials 

As per the latest results of Q2 FY26, the revenue from operations for the company stood at Rs 29,076 crores compared to Q2 FY25 revenue of Rs 24,896 crores, up by about 17 per cent YoY. Similarly, the net profit stood at Rs 350 crore in Q2 FY26, up compared to the Rs 283 crore profit in Q2 FY25. The 5-year compounded sales growth, profit growth and ROE are 14%, 18% and 18%, respectively. 

Growth Engines Beyond Mobility

Although the mobility segment continues to be an important scale driver, the growth rate of the software and cloud segment is higher. In the Software Solutions Group, the company reported a revenue growth of 48% YoY in the second quarter of FY26, whereas in the Mobility Solutions Group, it reported revenue growth of 18% YoY, which reflects an improvement. The company’s strategy is centred on subscription, cloud marketplaces, cybersecurity, and managed services.

With steady double-digit growth in revenues, growing profits, and expanding beyond mobility into cloud, software, and managed services, the firm is slowly but surely transforming itself into a broad-based technology platform play. The significant rise in institutional holdings, with a near-double increase in the stake held by a premier global fund, thus supports market belief in its scalable business model, execution prowess, and long-term growth prospects.

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