Redington Share Price Today Falls 4% as Iran-US War Hits Gulf Ops; What’s Next for Apple iPhone Supplier?

Redington Share Price Today: Shares of Redington Limited, a prominent supplier of iPhones in India to Apple Inc, declined during Tuesday's intraday trading session after the company gave an update on its operations in the Gulf region amid the ongoing Iran-US war.

Redington share price was trading 3.61% lower at Rs 224.5 per share on BSE with a market capitalisation of Rs 17,566.47 crore at 11:50 am on Tuesday, March 17. The stock had declined to an intraday low of Rs 221.05 per share during the session.

Why Is Redington's Share Price Falling Today?

The decline in Redington share price came a day after the Apple iPhone supplier updated about the impact of the persistent geopolitical tensions on its business operations in the Gulf region.

Redington's step-down subsidiary, Redington Gulf FZE, is facing restriction in its operation in the Gulf region due to the ongoing geopolitical tensions. As per Redington's press release, increased transit time due to re-routing of shipments and closure of major ports/airspace, surge in freight, insurance and logisitcs costs, and revocation of war risk coverage by insurance providers for companies in the region, has impacted the operations in Gulf region.

"Given the dynamic nature of the situation, Redington's senior management is actively monitoring developments and will take all appropriate actions as necessary," the company said in its press release, adding that it is currently unable to quantify the financial impact of the situation.

Apple iPhone Distributor Redington Share Price Declines: What's Next For Investors?

Around 20-255 of Redington revenue comes form the Middle East and Africa,which makes it naturally exposed to the current geopolitical tensions.

Redington derives roughly 20-25% of its revenues from the Middle East and Africa, which makes it naturally exposed to the current geopolitical tensions.

"The impact so far is operational, not fundamental. Disruptions in logistics-such as rerouting, higher freight costs, and elongated delivery timelines-are likely to compress margins by 50-100 basis points in the near term and stretch the working capital cycle," explained Tushar Badjate, Director of Badjate Stock & shares Pvt Ltd.

Redington Share Price Down 14% In Week

While the company gave its business update on Monday, the stock was in a free fall over the last two weeks. While, the market has reacted swiftly on Iran-US war developments and lead to a sell off in Redington share price, Badjate, notes that the company's core business model is buit on scale, strong OEM partnerships and distribution efficiency.

"It is important to note that Redington's core business model, buily on scale, strong OEM partnerships, and distribution efficiency, remains intact. This is not a business disruption; it is an environmental one. And historically, environments normalise faster than fundamentally strong businesses deteriorate," added Badjate.