Redington's iPhone boost runs on a 1.4% margin

Redington Limited (NSE: REDINGTON) posted record Q1 FY27 profit of ₹486 crore, up 77%. The stock has doubled from its April low of ₹191 to about ₹388. What happened Revenue rose 34% to ₹34,966 crore, the highest ever. EBITDA jumped 76% to ₹707 crore. India was the star, with revenue up 63% and profit up 60%. Apple is the largest brand at 31% of revenue, followed by Lenovo at 11% and HP at 7%. Debt to equity is a modest 0.28. The iPhone 18 series goes on sale in India on 18 September. Why it matters Redington does not make phones. It moves them. For every ₹100 of product it distributes, it keeps about ₹1.40 as profit. So a strong iPhone cycle lifts revenue a lot, but profit only a little, unless the margin also improves. My view The margin did improve this quarter, and that is the real story. Profit grew more than twice as fast as revenue. The drivers were large enterprise deals, cloud and cybersecurity, not phones. One part of it may not last. PC prices were higher because of a memory chip shortage. That is price, not demand, and it fades when supply catches up. Now the maths that matters. Annual revenue is running near ₹1.4 lakh crore. Every 0.1 percentage point of margin is worth about ₹140 crore of profit, or roughly 10% of earnings. Small margin moves swing this stock hard, both ways. At about 20 times earnings, it is no longer cheap for a thin margin distributor. What I am watching iPhone 18 sell-through in the festive season, and Q2 FY27 results in November. I want profit margin holding near 1.4% and working capital under control. On the chart, ₹403 is the 52-week high and ₹340 is support. My stance: Hold. Do not chase after a double. Add near ₹340. Disclosure: I do not hold a position in Redington Limited at the time of writing. This is not investment advice.