Redington India (Redington) reported strong operating performance in terms of both revenues and margins in Q3FY19. Consolidated revenues grew 11% y-o-y to Rs 126 bn driven by healthy double-digit revenue growth both in India and overseas (up 12% y-o-y each) businesses. Excluding Turkey, overseas revenues grew by a stronger 15% y-o-y. Gross margins improved 72bps y-o-y to 6.0%. Consolidated Ebitda margin grew 34bps y-o-y to 2.19% and Ebitda grew 32% y-o-y to Rs 2.8 billion. Arena (Turkey) business registered Ebitda growth of 27% y-o-y in Q3FY19, despite revenue de-growth of 9%, led by strong control on operating expenses. Thus, management remains on track of implementing the measures highlighted for the Turkey business (reduction of employees and working capital) and believes the worst is over for the geography. Also Read:\u00a015 sugar mills in Maharashtra likely to face recovery action During the quarter, Redington MEA subsidiary undertook impairment of investment made in Arena to the tune of $10.2 m due to devaluation of Turkish Lira against the US dollar. Despite the impairment loss, consolidated PAT grew 14% y-o-y to Rs 1,451 m. Considering the strong operational performance, we revise upward our earnings estimates by 6.2% for FY19\/FY20, respectively. We introduce FY21E and now expect sales and Ebitda CAGRs of 7.2% and 8.5%, respectively, over FY18-FY21. Redington\u2019s share price has corrected by 13% since our last update. We upgrade the stock from 'Add' to 'Buy' with a revised target price of Rs 100 (earlier Rs 95) based on 8x FY20E earnings. At CMP, the stock trades at an attractive valuation of 5.8x FY20E EPS.