From iPhones to GPUs: Redington, Ingram Micro ride the AI boom

Summary

Demand for AI servers, chips, and other data centre infrastructure is becoming a growth driver for Redington and Ingram Micro, offering a new avenue for expansion

Technology distributors Redington Ltd and Ingram Micro Holding Corp., best known for supplying iPhones and laptops to retailers and businesses, are emerging as beneficiaries of India's artificial intelligence (AI) and data centre boom.

Demand for AI servers, chips, and other data centre infrastructure is becoming a growth driver for both companies, offering a new avenue for expansion.

While selling AI compute accounts for roughly a fifth of their revenue, it is among the fastest-growing segments for both firms. The companies get three-fifths of their business from supplying phones and laptops to retailers and businesses.

At Chennai-based Redington, the world's eighth-largest technology distributor, management expects its technology solutions group (TSG) business to be its fastest-growing driver. This is despite the company getting almost a third of its business from reselling Apple phones and handling almost half of its offline distribution.

"So second half, we continue to see TSG being a very strong number one in terms of growth driver, followed by SSG (software solutions group)," said V S Hariharan, chief executive of Redington, during the company's post-earnings conference call on 4 November. "So the value segments will be good for the second half. Typically, they've always been strong in the second half and the CPU-GPU migration as well as the SSG work will drive that."

The TSG arm sells networking, servers, storage, power and collaboration equipment to clients. This makes up a little less than a fifth of the company's revenue. On the other hand, the software solutions arm comprises cloud, software licensing, professional services and cybersecurity solutions. This division also makes up less than a fifth. Together, both arms make up a third of the company's business.

Redington ended the second quarter with ₹430 billion ($4.5 billion), up 23% sequentially. This makes it a little bigger than HCL Technologies, which is the country's third-largest tech services firm.

In the first half of the fiscal year alone, the company's software and technology solutions business jumped 71% and 45%, respectively, compared to the company's overall growth of 41%.

The management stated that "AI servers, the GPUs, with richer configurations and dramatically higher ASPs (average selling prices), in many cases 4x, are driving the growth. Large deals exceeded ₹3,800 crores and accounted for roughly 9% of the Group's revenue. A good chunk of the large deals in India came from data centers."

The management said it plans to capitalize on the data centre demand through local business houses setting up shop in the country.

Redington management's commentary comes after a larger supplier first threw light on data centre driving growth.

iPhones to AI servers

"AI is driving a lot of new solutions, new projects across cybersecurity, data center, cloud, networking, even AI PCs (personal computers). So AI is driving a lot of growth in India," said Flavio Moraes Junior, chief country executive of Ingram Micro India, during a conversation with Mint on 24 September.

California-based Ingram Micro ended last year with $52.6 billion in revenue, up 9.5% from the year-ago period, reversing a decline in 2024. Its India business grew at a similar pace, according to its financials. India is the company's second-largest market and accounted for about a tenth of the company's 2025 revenue, or $5 billion.

While the company does not disclose revenue from data centres, it discloses revenue from its 'advanced solutions' business, where the company sells servers, storage and networking devices, IT services and cybersecurity solutions, power and cooling, as well as GPU and AI-infrastructure products.

The management acknowledged that this segment was the company's fastest-growing business segment last quarter. To be sure, the company does not individually share revenue from its 'advanced solutions' business.

"I think of different investment cycles that are playing out right now. In the enterprise, the AI data centers, we continue to talk about, infrastructure modernization, everything wrapped with security. And our partners are telling us they're bullish right now near-term with large pipelines in data center networking and compute," said Paul Bay, CEO of Ingram Micro, during the company's post-earnings analyst call on 30 October.

"The global ICT market has entered an accelerated investment cycle, led by AI infrastructure, cloud computing, software and next-generation devices," said Motilal Oswal Financial Services analysts Chirag Kachhadiya and Sahil Satra, in a note earlier this month. "Data centre systems and infrastructure-as-a-service (IaaS) are emerging as the fastest-growing segments as hyperscalers and enterprises scale up their computing capacity to support AI workloads."

According to Motilal Oswal Financial Services, the country's installed data centre capacity currently stands at approximately 1.3GW, with developers announcing an additional 7.1GW of capacity over the next four years.