Redington Limited Intrinsic Value
REDINGTON · Services · Current price ₹384.9
Is Redington Limited undervalued?
We estimate the fair value of Redington Limited at ₹400 per share, against a market price of ₹394. That puts the share price about +1.6% below our estimate, at medium confidence. This is our view of what the business is worth, not a target price or a forecast of where the share price will go.
How this fair value is calculated
This estimate comes from 2 methods: Fair multiple (P/E) (₹443), Residual income (excess return on book) (₹314). Each is weighted by how well its inputs held up for this company. The full working, including the assumptions and what data was missing, is set out below.
The range around this estimate
Our estimate for Redington Limited spans ₹314 to ₹443. A margin of safety means buying meaningfully below the estimate: the wider the range, the more room the assumptions leave for error.
Margin of safety
Value investors look for a margin of safety: a discount to estimated value that absorbs being wrong. At ₹394 against an estimated value of ₹400, Redington Limited trades at +1.6%, i.e. a discount to our estimate. How much margin to demand depends on how much you trust the inputs, which is what the confidence band below is for.
How we got this fair value
Every number below is part of the same estimate for Redington Limited. Nothing here is a target price or a forecast of where the share price will go.
Workable, with real gaps. Weigh it alongside your own view rather than on its own.
Estimate range ₹314 – ₹443
Why this method for this business
Redington is an asset-light, earnings-driven business with a narrow moat, making relative P/E and residual income models the most appropriate. DCF is less suitable due to the lack of clear cash flow patterns and the company's reliance on earnings power.
The models behind the number
Each method is weighted by how well its inputs held up for this company.
Book value plus the present value of returns earned above the 10.6% cost of equity
- dcf: Inappropriate for an asset-light, earnings-driven business with volatile cash flows
- peer-based multiples: Not applicable due to the lack of size-comparable peers
What was missing
- Lack of size-comparable peers for relative P/E analysis
- Limited historical data on sector multiples
- Uncertainty in long-term growth assumptions
What drives it
21 inputs, grouped by how strong each claim is
- Sector-median P/E
- 22.4×
- Peers used
- 3
- EPS (TTM)
- 21.76 ₹/share
- Own-history median P/E
- 10.49×
- ROE (normalized)
- 22.4%
- Book value / share
- 130 ₹
peer-median
peer-median
computed
reconstructed (one feature, dampened — not a cap)
computed
reported
- Cost of equity
- 10.6%
building-block
- Anchor correction
- peer anchor 22.4x diverges 0.5x from 7yr own-history 10.5x (no size-comparable peer) — anchor blended 0.6 toward own-history → 15.3x
- Term: quality
- +2.0%
- Term: growth
- +20.3%
- Term: capital_allocation
- +10.3%
- Term: financial_strength
- +7.5%
- Term: history
- -9.4%
- Term: sector_rerating
- +0.0%
- Term: rate_regime
- +1.2%
- Term: risk
- +0.0%
- Moat
- Narrow
- Excess-return horizon
- 10 yrs
peer-anchor mismatch — deep own-history used instead
quality 59/100 (high, stable returns) → premium
durable ~13% CAGR (ROCE 18% > hurdle) → premium
capital allocation: rising ROCE funded by strong FCF → premium
financial strength: low leverage (D/E 0.3) → mild premium
history: market paid -31% vs sector, dampened ×0.3 (one feature, not the anchor)
sector re-rating: no sector-norm history → not used
rates: risk-free 6.9% below ~7.1% normal → higher multiple
risk: no analyst-dispersion signal available → neutral (lowers confidence, not PE)
computed
computed
- Premium vs sector
- +33.5%
- Fair-multiple confidence
- 72%
- Fair P/E
- 20.36×
fundamentals + macro (not capped at own history)
data completeness + term agreement
sector median × ∏(1+term) — Dynamic Fair Multiple
Who computed this
A language model (qwen3:8b) selects the valuation method and the judgement inputs for Redington Limited: which models suit the business, the moat, the growth and margin assumptions. It does not produce the number. The fair value itself is computed in Python by a deterministic engine (version 2026.08.1) from those inputs, so the same inputs always give the same result and every figure above can be traced to a source.
Estimated 14 Sept 2026. Re-run as new financials and news arrive.
How we value stocks
We estimate what a business is worth from its own economics: cash flows, returns on capital, and a multiple justified by its quality, rather than from where the share price has been. A fair value estimate is a view, not a verdict, and it is only as good as the inputs listed above.
Read the full fair-value methodologyMore on Redington Limited
DocStoX estimates are computed from reported financials, for informational purposes only, not investment advice. Consult a SEBI-registered advisor before investing.