Aditya Vision Limited — Q1 FY26 earnings call

Call held 1 Aug 2025

Management summary

Aditya Vision reported a stable Q1 FY26 despite unprecedented weather challenges impacting cooling product sales. The company achieved a 6% YoY revenue growth to ₹940 crores and a 4% increase in PAT to ₹55 crores, driven by proactive cost management and improved gross margins. Strategic inventory reduction and debt repayment strengthened the balance sheet, while store expansion continued with 4 new stores in Q1 and 3 in July, reaching 182 outlets. Management expressed optimism for the rest of FY26, anticipating a strong festive season and positive SSSG.

Highlights

  • Revenue grew 6% YoY to ₹940 crores in Q1 FY26.

  • EBITDA margin maintained at 9.5%.

  • Profit after tax grew 4% YoY to ₹55 crores.

  • Gross margins improved from 15.22% to 15.33%.

  • Inventory reduced by ₹150 crores compared to March 2025.

  • Short-term borrowings declined from ₹278 crores in March '25 to ₹115 crores as of June 30, '25.

  • Same-store sales growth (SSSG) for Q1 FY26 was negative 4%.

  • Opened 4 new stores in Q1, with 3 more added in July, bringing total to 182 stores.

Concerns

  • Unfavorable weather conditions impacting seasonal product sales

Key financials

  1. Revenue ₹940 Cr +6%YoY
  2. EBITDA ₹90 Cr
  3. EBITDA Margin 9.5%
  4. PAT ₹55 Cr +3.9%YoY
  5. Gross Margin 15.3%
  6. Same-Store Sales Growth -4%
  7. Store Count 179 stores

What they filed

Q1 FY27: revenue up 26.9%, net profit up 40.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue376 508 487 940 458 +22%649 +28%625 +28%1,193 +27%
EBITDA30 47 42 90 35 +17%53 +13%51 +21%124 +38%
Net profit12 24 16 55 13 +8%27 +13%22 +38%77 +40%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Bihar
    76% Revenue Contribution
  • Uttar Pradesh
    13% Revenue Contribution
  • Jharkhand
    11% Revenue Contribution

Capital allocation

high confidence
  • Capex Capex disclosed
    • Store expansion (25-30 new stores)
    We remain on track to add 25 to 30 new stores in FY '26, aiming to cross the 200-plus store milestone by year-end.
  • Debt Debt disclosed
    • Repayment Short-term borrowings declined from INR278 crores in March '25 to approximately INR115 crores as of June 30, '25. ₹163 Cr
    the short-term borrowings declined sharply from INR278 crores in March '25 to approximately INR115 crores as of June 30, '25.
  • Liquidity Cash ₹141 Cr Positive cash flow contributed to debt reduction.
    In fact, if you take entire equity and cash -- whatever cash and cash equivalent is with the company, it's at INR141 crores.

Guidance & targets

Store Count

  • New store additions Store Count · FY26 · High confidence 25 to 30 new stores
    We remain on track to add 25 to 30 new stores in FY '26, aiming to cross the 200-plus store milestone by year-end.

    — Yashovardhan Sinha

Sales Growth

  • Overall sales growth Sales Growth · Long-term (despite Q1) · Medium confidence 20-25%
    But we have not grown at that level in this quarter. So our entire cost on freight, security expenses, warehousing, sale promotion, everything has come down. So these things have been effectively managed by us and keeping in view that we have to see the bottom line as well... But if something goes wrong, sometimes it's not in your hand. So this was the quarter I've been telling all, -- I gave you the figures also that how weather behaved strangely in this quarter. So maybe we may not be achieving our, let us say, guidance. But we have always been guiding about 20%, 25% of the growth in sales, which even now our team remains confident of achieving.

    — Yashovardhan Sinha

  • Same-store sales growth (SSSG) Sales Growth · Full FY26 · High confidence Positive territory
    Definitely, I believe that we will be in positive territory. And given that we have got another 3 quarters with us and this all festive season, everything is coming very quickly. So we are quite confident and optimistic that the remaining period will be good.

    — Yashovardhan Sinha

Market Expansion

  • Chhattisgarh market entry Market Expansion · Q4 FY26 · Low confidence May enter in Q4
    So we won't say that we will not be entering. Maybe in Q4, we may be entering in these markets. But right now, what I said that right now, we are not, in fact, expanding in Chhattisgarh as of now. But it is a long way ahead. Just 4 months have elapsed out of 12 months. And so by end of this year, I think we'll take a call by Q4 to expand in Chhattisgarh, but that's definitely in our agenda.

    — Yashovardhan Sinha

What to watch in Q2 FY26

Same-store sales growth (SSSG)

Full FY26 (check progress in Q2 FY26)
Current -4% in Q1 FY26
Target Positive territory

Why it matters

SSSG is a key indicator of organic growth and demand recovery, especially after a challenging Q1.

Definitely, I believe that we will be in positive territory. And given that we have got another 3 quarters with us and this all festive season, everything is coming very quickly. So we are quite confident and optimistic that the remaining period will be good.

Risks & concerns

  • Unfavorable weather conditions impacting seasonal product sales

    high

    Unusual rains and cold weather in Q1 FY26 led to a 15-30% decline in primary sales for cooling products across the industry.

    This quarter, witnessed one of the most unusual summers in entire history of 26 years of Aditya Vision with unusual rains continuing throughout Q1 with no heat waves in our core markets of Bihar, Jharkhand and Uttar Pradesh.

    Management acknowledged

Q&A highlights

6 direct
AC inventory management and BEE norms Direct
As far as inventory is concerned, I have already spoken in my earning call that we have reduced our inventory to the tune of INR150 crores. And on the AC front also, we are at a very normal level, which is a historical level for our Aditya Vision with so many stores. So we are quite comfortable with our stocking of AC. And it's not a cause of concern at all.

Addresses concerns about excess AC inventory due to weather, clarifies strategy for BEE norm changes, and denies discounting.

Asked by Aniruddha Joshi

Festive season demand outlook given strong monsoon Direct
I'm very optimistic that because of good rains, as you have seen, very good rains and probably 10% more crop has been sowed. So I think that bumper harvesting will be there in entire geography where we are operating. So I think given that Q1 was not that good, so people will be having so much of disposable income with them. And I think festive season should go realbonuly well.

Provides management's optimistic view on demand recovery for the upcoming festive season, citing agricultural and economic factors.

Asked by Rehan Saiyyed

Sustainability of EBITDA margins and cost control measures Direct
So we try to keep it as minimum as possible. As you know, if sale is not there, so there are so many bonuses and incentives, these are also not there for employees. So that has also cut down on our expenses. And more so when the sale is not like we are used to grow at a 30% level. But we have not grown at that level in this quarter. So our entire cost on freight, security expenses, warehousing, sale promotion, everything has come down. So these things have been effectively managed by us and keeping in view that we have to see the bottom line as well.

Explains the specific cost-cutting measures taken to maintain margins despite revenue slowdown and indicates that some expenses will rise with growth.

Asked by Devanshu Bansal

Inventory levels and potential for discounting Direct
But I think I never Madhu, I never said that we've resorted to discounting. I do not know where you have got this word from. But we never resorted this to any discounting. We in fact, we took all the support from OEMs like, as you know, how they support, they give free installations and they give various other facilities to the customers, so these are the things.

Clarifies that the company did not resort to discounting to clear inventory, but rather leveraged OEM support, which is crucial for margin protection.

Asked by Madhur Rathi

Same-store sales growth (SSSG) and full-year outlook Direct
Yes. Yes, I'm having that number. Same store sales growth has been negative 4% in Q1 FY '26, which was at 21% last year Q1 FY '25. So it is a negative figure of 4% SSG... Definitely, I believe that we will be in positive territory. And given that we have got another 3 quarters with us and this all festive season, everything is coming very quickly. So we are quite confident and optimistic that the remaining period will be good.

Provides the specific SSSG figure for the quarter and management's confidence in a positive full-year SSSG, indicating expected recovery.

Asked by Renjith Sivaram

Store expansion strategy and focus regions Direct
We are right now, we have been focusing on Tier 2 cities only, and that's it. We are already present in Lucknow. And we are focusing in -- I would rather not like to divulge what we are intending to -- where we are intending to open. That will not be in company's interest. But mostly now this Western UP will be our next place where we are going to open new stores.

Details the company's strategic focus on Tier 2 cities and Western UP for future store expansion, providing clarity on growth drivers.

Asked by Yash Sonthaliya

Chhattisgarh market entry timeline Partial
So we won't say that we will not be entering. Maybe in Q4, we may be entering in these markets. But right now, what I said that right now, we are not, in fact, expanding in Chhattisgarh as of now. But it is a long way ahead. Just 4 months have elapsed out of 12 months. And so by end of this year, I think we'll take a call by Q4 to expand in Chhattisgarh, but that's definitely in our agenda.

Clarifies that Chhattisgarh entry is not immediate but remains on the agenda, potentially in Q4 FY26, managing expectations.

Asked by Manoj Gori

2 min read 6 chapters

Detailed narrative

Q1 FY26 Performance Amidst Weather Challenges

Aditya Vision reported a 6% year-on-year revenue growth to ₹940 crores and a 4% increase in PAT to ₹55 crores for Q1 FY26. This performance was achieved despite an "unusual summer" with continuous rains and no heatwaves in core markets, leading to a 15-30% decline in primary sales for cooling products across the industry. Gross margins improved slightly from 15.22% to 15.33%, and EBITDA margin was maintained at 9.5% through stringent cost control.

Strategic Cost Management and Margin Protection

To mitigate the impact of softened demand, management proactively rationalized non-critical operating expenses, including advertising, promotional spending, warehousing, freight, and security. This focused approach ensured operational stability and helped maintain profitability, with PAT growing to ₹55 crores from ₹53 crores year-on-year. Management noted that these expenses would likely increase once higher growth rates return, indicating a disciplined approach to cost management.

Inventory and Debt Optimization

The company successfully reduced its inventory levels by ₹150 crores in Q1 FY26 compared to March 2025, bringing AC stock to historically normal levels. This was achieved without resorting to discounting, instead leveraging "substantial support" from OEMs like free installations and other facilities. Concurrently, short-term borrowings sharply declined from ₹278 crores in March 2025 to approximately ₹115 crores by June 30, 2025, supported by positive cash flow and a cash and cash equivalent balance of ₹141 crores.

Continued Store Expansion and Market Focus

Aditya Vision opened 4 new stores in Q1 FY26 and an additional 3 in July 2025, bringing the total store count to 182. The company remains on track to add 25 to 30 new stores in FY26, aiming to surpass the 200-plus store milestone by year-end. The primary focus for expansion is Tier 2 cities and Western Uttar Pradesh, including Lucknow, where the brand is gaining strong traction and UP's revenue contribution has surpassed Jharkhand.

Optimistic Outlook for H2 FY26

Despite the negative 4% same-store sales growth in Q1 FY26, management expressed strong optimism for the remaining quarters. Factors cited include a good monsoon leading to a bumper harvest, the Union Budget 2025's personal tax relief (₹1 lakh crore), and Bihar's new 125-unit free electricity scheme, all expected to boost consumer disposable income and discretionary retail demand during the upcoming festive season. The company anticipates full-year SSSG to be in positive territory and aims for 20-25% sales growth.

AC Sales Contribution and Inventory Comfort

AC sales contributed approximately 42% of the company's total revenue in Q1 FY26, experiencing a degrowth of only 2% despite the adverse weather. Management reiterated comfort with current AC inventory levels, stating they are not "desperate to liquidate" stock and that ACs are now sold year-round, not just seasonally. The inventory level of ₹548 crores (Q1 FY26) is deemed necessary for the expanded store network and upcoming sales, ensuring product availability.

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