Redington (India) Ltd, the Rs 6,500-crore leading distributor of IT, telecom & computer hardware products and part of the Rs 13,500-crore Redington group, is set to take a marginal hit on its revenue as Hewlett Packard (HP) decides to make changes in its distribution structure in India.
Global hardware and networking major HP has been associated with Redington India for over 15 years now to distribute its range of products including printers and consumables, consumer and commercial PCs, notebooks and workstations, servers, software, networking products and storage items. These products and items can be classified into three different groups namely Personal Systems Group (PSG), Imaging Products Group (IMG) and Enterprise Products Group (TSG), said market sources.
As part of its aggressive growth plans in India , HP has decided to address the PSG distribution business with a combination of exclusive and two distributor models, either by product or by geography as against the existing distributing system through Redington, Ingram and other smaller partners in India. It is learnt that HP is set to implement the new structure from next month.
Following the sudden shift in HP?s distribution structure on the PSG category, Redington India will take a marginal hit of Rs 130 crore in the current financial year (2010-11) on its topline or approximately 12% drop in its overall PSG portfolio. ?This drop in revenue would constitute 1% or less of our likely consolidated revenue of Rs 13,500 crore for the financial year ended March 31, 2010 and 2% of our likely revenue from India (Rs 6,500 crore),? said R Srinivasan, managing director, Redington India.
Speaking to FE, he said, ?It is only a marginal hit on our topline. Out of Redington India ?s revenue from sale of HP products, about 58% comes from PSG products for financial year ending 2010.?