Aditya Vision Limited — Q2 FY26 earnings call

Call held 7 Nov 2025

Management summary

Aditya Vision delivered a robust Q2 FY26 performance despite external challenges like extended monsoons, subdued Shradh demand, and delayed GST slab implementation. Revenue grew 22% YoY to INR458 crores, driven by a strong rebound in the last 9 days of the quarter due to festive season onset and revised GST slabs. PAT increased 4.2% YoY to INR13 crores, supported by optimized product mix and cost control. The company continues its expansion, adding 9 new stores and targeting 30-35 new stores for FY26, while managing inventory strategically for the festive period and anticipating positive impacts from government initiatives.

Highlights

  • Q2 FY26 Revenue grew 22% YoY to INR458 crores.

  • Q2 FY26 PAT increased 4.2% YoY to INR13 crores.

  • Q2 FY26 EBITDA stood at INR35 crores with a margin of 7.6%.

  • Same-Store Sales Growth (SSSG) for Q2 FY26 was 12%.

  • H1 FY26 Revenue grew 10.5% YoY, with PAT up 4% YoY.

  • Company added 9 new stores in Q2, reaching 188 stores by Sep 30, 2025, targeting 30-35 new stores for FY26.

  • Management expects to maintain an EBITDA margin of 8-10%.

  • Inventory stood at INR676 crores as of Sep 30, 2025, strategically built for the festive season.

Key financials

2 periods

Q2

  • Revenue
    ₹458 Cr
    YoY +22%
  • EBITDA
    ₹35 Cr
  • EBITDA Margin
    7.6%
  • PAT
    ₹13 Cr
    YoY +4.2%
  • SSSG
    12%

H1

  • Revenue Growth
    —
    YoY +10.5%
  • EBITDA
    ₹124 Cr
  • EBITDA Margin
    8.9%
  • PAT Growth
    —
    YoY +4%
  • SSSG
    2%

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

  • H1 FY26 Revenue Contribution
    77% Bihar11% Jharkhand12% Uttar Pradesh

Capital allocation

high confidence
  • Capex Capex disclosed from our own sources
    • Elevated capex due to bigger store sizes, focusing on large showrooms for major expansion into bigger cities and towns in UP.
    With our entry into bigger cities and towns in UP, we have seen elevated capex due to bigger store sizes, which will continue as our major expansion now focused on large showrooms. (page 4) ... It will be funded from our own sources. (page 9)

Guidance & targets

Store Count

  • Total stores added Store Count · FY26 · High confidence 30-35
    It will be funded from our own sources. And we are planning to add 30 to 35 overall stores in FY '26.

    — Yashovardhan Sinha

Profitability

  • EBITDA Margin Profitability · Medium confidence 8-10%
    We hope to maintain our EBITDA margin. I can give you a range from 8% to 10%.

    — Yashovardhan Sinha

Pricing

  • AC prices increase Pricing · From 1st of January · High confidence 6-8%
    The reason being that we are foreseeing 6% to 8% increase in air conditioner prices from -- going forward from 1st of January.

    — Yashovardhan Sinha

What to watch in Q3 FY26

Store expansion progress

H2 FY26
Current 188 stores as of Sep 30, 2025; 9 added in Q2.
Target Most of the 30-35 planned FY26 stores opened.

Why it matters

Indicates the pace of physical footprint expansion, a key growth driver for the company.

We have already one more thing. We have already opened 13 stores, and our strategy is to open most of the stores in H2. This is -- this strategy means with us. So, most of the stores will be opened in H2. (page 9)

Risks & concerns

  • Muted demand for cooling products due to weather

    medium

    Extended monsoon and below-normal temperatures in Q2 FY26 led to softer demand for cooling products, impacting gross margins.

    Management acknowledged

  • Subdued demand during Shradh period and delayed GST implementation

    medium

    These factors kept customers withholding purchases for most of August and September, impacting Q2 sales.

    Management acknowledged

  • Increasing working capital days

    low

    Working capital days have consistently increased, which management attributes to aggressive store expansion and the need to stock new stores.

    Analyst acknowledged, explained

Q&A highlights

8 direct
Reasons for lower margin in Q2 FY26 Direct
Aniruddha, as far as gross margin is concerned, it would -- actually sale of air conditioner and cooling products, as you know, has been muted in entire half year. So, this is because we were having much better margins in cooling products normally in Q1 also. So, in that H1 has suffered. And in fact, what I told in the earning call also that even Q2 was also very soft in that temperature-wise or rainfall, but there were a lot of rainfall. So gross margin was under pressure definitely because of major categories of cooling products were flat.

Explains the slight dip in Q2 margins despite revenue growth, linking it to product mix and external factors like weather.

Asked by Aniruddha Joshi

Inventory levels of cooling products (AC and refrigerator) Direct
No, I just told you that there's nothing. We are very comfortable as far as cooling product. The cooling product inventory actually refrigerator, there is no problem at all. The reason being that we are very -- always very short of it because it is sold across the entire year. And ACs are, of course, these are the products which are sold mostly during summer period. So, we are comfortable on that.

Addresses concerns about potential excess inventory given muted cooling product sales and upcoming BEE norm changes, indicating no overstocking.

Asked by Aniruddha Joshi

Pricing changes due to GST cut vs. company discounting Direct
No, no. My answer in a very simple way, Yash, 7% to 8% prices have come down just because of GST cut. It's nothing to do about with our discounting on anything.

Clarifies that price reductions are due to external regulatory changes (GST) and not aggressive discounting by the company, which is positive for margin perception.

Asked by Yash Sonthaliya

Outlook for Q3 and Q4 FY26 and Q1 FY27 given festive season shift Direct
Yes, definitely, this is what we foresee. And you can understand that even though we'll be entering into Q3 and Q4, we expect very good figures in Q3 and Q4 both as well. And what you said that if things are normal, then Q1 FY '27 should be definitely a very, very great one.

Provides positive forward-looking commentary on sales performance for upcoming quarters, suggesting sustained momentum and strong future growth.

Asked by Manoj Gori

Impact of government initiatives (INR10,000 transfer, free electricity) on demand Direct
Definitely, Manoj that the money, whatever money is coming in the hands of these people, it is bound to be invested somewhere like just think of it that it is passed over to women mostly. And if they start up a business, they are going to get another around full INR2 lakh per person if they start a business. So, starting -- for starting a business the primary thing will be either it will be a dairy, in dairy, they need refrigerator, they have to come to us. For establishing a business, they have to have a mobile or a laptop. So, these are -- the money is going to bound to flow into our system, and we will be a key beneficiary for all these benefits.

Highlights potential demand drivers from government schemes, particularly for specific product categories like refrigerators, mobiles, and laptops, boosting consumer spending.

Asked by Manoj Gori

Funding for new store additions Direct
It will be funded from our own sources.

Indicates financial strength and ability to fund expansion without external debt, which is positive for capital structure and growth sustainability.

Asked by Vidhi Shah

Consistently increasing working capital days Direct
You have to understand that -- wait I understood your question. You have to analyze our expansion also. Most of our inventory, these are sent to the new stores. We have to buy it in advance to send to the new stores. And we have been opening even 45 stores in a single year. So we have to manage the inventory in such a way that it is going up only because we are expanding. Supposing we start stop expanding, inventory days will come down.

Explains the increase in working capital days as a direct consequence of aggressive store expansion and the need to stock new stores, rather than operational inefficiency.

Asked by Anshuman Srivastava

Inventory levels post-festive season (December end) Direct
In December end, definitely, it will come down. And because there won't be any such triggers at that time. But again, nobody can say for sure that we will not be having that good level of inventory. The reason being that we are foreseeing 6% to 8% increase in air conditioner prices from -- going forward from 1st of January.

Provides insight into inventory management strategy, anticipating a reduction post-festive season but also considering future price increases for ACs, impacting future sales and margins.

Asked by Aliasgar Shakir

3 min read 7 chapters

Detailed narrative

Q2 FY26 Performance Overview

Aditya Vision reported a robust Q2 FY26 with revenue growing 22% year-on-year to INR458 crores. Profit after tax increased by 4.2% YoY to INR13 crores, while EBITDA stood at INR35 crores, translating to a margin of 7.6%. The company's gross and net margins remained stable, supported by an optimized product mix and tight cost control, contributing to a respectable growth in sales.

External Headwinds and Rebound

The quarter faced several external challenges, including extended monsoons, subdued demand during the Shradh period, and delayed implementation of revised GST slabs. These factors led to softer demand for cooling products and kept customers from purchasing for most of August and September. However, the last 9 days of the quarter saw a strong rebound in demand, particularly for big-size televisions and ACs, coinciding with the festive season onset and revised GST slabs.

Store Expansion Strategy

The company continues its retail footprint expansion with a cluster-based approach, adding 9 new stores in Q2 FY26, bringing the total to 188 stores as of September 30, 2025. Aditya Vision aims to cross the 200-store milestone within FY26, with plans to add 30-35 new stores overall for the fiscal year, primarily in H2. This expansion, focusing on larger showrooms in bigger cities and towns in UP, has led to elevated capex, which is funded through internal accruals.

Inventory Management for Festive Season

As of September 30, 2025, inventory stood at INR676 crores, reflecting a deliberate stocking strategy for the ongoing festive period, including Dussehra, Navratri, Dhanteras, and Diwali. This strategic buildup ensured adequate product availability across key categories to meet peak consumer demand. Management expects inventory levels to normalize by December end, also noting a foreseen 6-8% increase in AC prices from January 1, 2026.

Impact of Government Initiatives

Management highlighted several policy initiatives expected to boost consumption. The INR10,000 direct transfer under the Mukhyamantri Mahila Rojgar Yojana in Bihar (totaling INR13,000 crores to 1.30 crore women) and the free electricity scheme are expected to increase household liquidity and discretionary spending. Additionally, salary revisions linked to the 8th pay commission and personal tax relief in the Union Budget 2025 are anticipated to further enhance purchasing power, benefiting retail demand for products like refrigerators, mobiles, and laptops.

Margin Dynamics

Gross margins remained steady at 15.1% in Q2 and 15.2% in H1 FY26. However, Q2 EBITDA margin was 7.6%, lower than H1's 8.9%. This was attributed to muted sales of higher-margin cooling products (ACs) due to unfavorable weather conditions, as the percentage of AC sales dropped from 48% last year to 34% in H1 FY26. The company aims to maintain an EBITDA margin in the 8-10% range going forward, supported by an optimized product mix and tight cost control.

Working Capital and Expansion

The company's working capital days have consistently increased from FY20 to H1 FY26. Management clarified that this is primarily due to aggressive expansion, as inventory needs to be purchased in advance to stock new stores. They indicated that working capital days would stabilize or decrease once the pace of store expansion moderates, reflecting a growth-driven working capital requirement rather than operational inefficiency.

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