THE PRIMARY CHALLENGE HAS BEEN THE LACK OF SUFFICIENT LIQUIDITY IN THE MARKET, WHICH HAS ELONGATED THE CREDIT CYCLES, THUS ADVERSELY IMPACTING WORKING CAPITAL DEPLOYMENT LEVELS
Ramesh Natarajan & J K Senapati, both Jt. COO, Redington India, discuss the financial performance of their organization for the financial year 2018-2019
What is your view of the performance, so far, of the Indian ICT industry in 2019? If we are allowed to limit our observations to the Distribution business for the India Market ICT segment, it has demonstrated a remarkable degree of resilience under difficult macro-economic circumstances. Demand has been steady, pockets of growth are available and investments in Digital India and Smart City projects have provided momentum. We have been able to successfully engage with vendors & partners to capture our fair share of all growth opportunities. The primary challenge has been the lack of sufficient liquidity in the market, which has elongated the credit cycles, thus adversely impacting working capital deployment levels.
What is your view on FY 19 in terms of business and financial performance? Please share any two key highlights?
We have delivered a double digit revenue growth and commensurate earning, while maintaining strict emphasis on business hygiene. Even in a scenario of adverse market liquidity, strong processes and credit discipline has ensured control over receivables. Our Cloud Business Vertical has maintained very strong momentum and has delivered outstanding business results while being acknowledged by all leading Cloud vendors as the best model adopted by a distributor, not only in India, but the entire APAC region.
Difficult credit environment has impacted business hygiene and has put strain on working capital requirement. Demands for longer credit periods has burdened distributors with increasing interest costs and has adversely impacted the distributors’ ability to invest in business.
What is your business outlook for FY 20 and what are the key focus areas?
FY 19-20 is a pivotal year for us as our transition to a more Solution Oriented Distributor starts taking shape and we start delivering direct value to our vendors and our partners through this approach.
During this year we would also complete the first phase of transforming to a Digital Organization, targeted not only towards digitalizing all our internal processes, but also towards converting a major part of our future business to seamless, automated, digitized transaction experience for our customers.
Cloud will remain a high focus area with emphasis on accelerating Redington Managed Service Practice business in support of our partners.
The Indian IT distribution landscape is undergoing a metamorphosis. The value-additions expected from a distributor by the vendors and channel partners are undergoing rapid changes. Redington is carefully calibrating its approach and investments in skills and capabilities that will allow it to maintain its leadership position in future.
What is the influence of the emerging technologies? How will it impact the next couple of years?
We are already witnessing IT Investment decisions being based on leveraging the benefits of AI, ML & Analytics for concrete business outcomes. More and more customer solutions are being centered on use of these fast-developing technologies. We are strongly engaged with vendors who are at the forefront of exploiting these technologies and are acquiring in-house skills and capabilities to help partners leverage Vendors’ technology offerings to develop solutions for their customers.