Redington CEO Ramesh Natarajan: AI PCs Are A Good Trend To Look For | NDTV Profit
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00:00First off, I want to understand from you, slightly muted on the growth front, what can we expect from full year FY25?
00:09What can the expectations, aspirations be and how do you assess Q1 as a whole?
00:14Q1 has been good from a larger performance perspective because that has been our highest ever revenue that we have gotten so far.
00:23But if you look at the seasonality, Q1 has always been fairly silent and more so from this quarter where we had the code of conduct and from an election perspective that had softened a lot of projects and delay in closures on that.
00:40A couple of our market mixes also had a drop in terms of those revenues, but otherwise we had growth markets doing well, including India, KSA and MEA.
00:51As it has got to do with the product mix as well as the geo mix, maybe Q1 always is a little subdued on growth.
00:59But however, moving forward, we do see the notebooks and the PC business obviously coming back after a big tech refresh from the COVID, giving us a fair amount of growth opportunities.
01:13We also look at mobility with a fair lot of new product launches that are planned out for Q2 that could be a great growth opportunity.
01:23We also see markets coming back on projects and enterprise orders and government deals that would probably help us moving forward, apart from a good lot of data center growth that are happening in the markets that should give us a good upside as we move forward.
01:41But otherwise, Q1 has been its characteristics, but we see definitely a good positive growth opportunity moving forward.
01:50Right. Thank you for that, Mr. Natarajan, Rucha, Soumya, Desai. I just wanted to ask you about the margin range which you've guided for around 2.3% to 3.5% in terms of EBITDA.
02:01In terms of profit margin, you've guided around 1.3% to 1.4%. So what are the margin levers, number one?
02:08And number two, what kind of margin range for the long term do you expect? Do you expect it to remain in the lower single digits?
02:16No, I think we should be, if you have been looking at our statistics for the last many years, I think we have been greatly managing at about 1.3% to 1.5%, and we would expect ourselves to continue having that from a path perspective.
02:31Gross margins has got a good element of product mix that we have, the geo mix that we have that has been well characterized over the years from the growth markets, emerging markets, and the geo expansion that we are looking out for.
02:47Between the categories that we have, which has PC printers on one side, we have mobility as the second division, and the third is on enterprises, all of it has its margin mixes.
02:57Some part of it has been a little muted this quarter, largely owing to some slowdown in some markets due to certain Q1 characterizations, plus governments probably coming out from the new elections perspective.
03:11Some spins have been muted, but otherwise we feel the next part of the year should be having a fair amount of growth.
03:17As I said, PCs are looking out for a tech refresh, and the Windows 11 that's coming along will obviously strive for more.
03:25AI PCs are a good trend to look for, and with a lot of GPU data centers that are coming by, a lot of enterprise sectors that are getting more digitalized, more startups and scale-ups are obviously coming up to be a little higher in its performances.
03:40Mobility launches and the new products that are expected to be will continue to keep our gross margins in play, and I don't think we should look for any muted gross margin or the bad percentages for us.
03:55Right. One last question from our end. In terms of revenue from hyperscalers business, do you expect the slowdown, say for example, in terms of Microsoft, right? Pretty muted numbers this quarter. So will that kind of weakness in the hyperscalers business affect business at our company?
04:12We have been doing a good growth on hyperscalers at about close to 35%, and we expect that to continue. If not for the same ranges, it will still be at about anywhere between 28 to 32. That would not get muted.
04:25The adoption of cloud between public and private and hybrid is only getting better year by year, so I don't find the cloud business can only be contributing more with its current percentages.
04:37It's only growing up and we expect a lot of services or workloads around the cloud can only be more growth oriented.
04:47All right. Thank you so much, Mr. Natarajan.