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    Aditya Vision

    AVL
    Consumer Services·30 Jan 2025
    Management Summary

    Aditya Vision reported strong financial performance for Q3 and 9M FY25, driven by operational expansion and robust same-store sales growth despite a subdued consumption environment. Revenues for 9M FY25 grew 30% to INR 1,773 crores, with PAT increasing 29% to INR 89.51 crores. The company continues its strategic store expansion, reaching 167 operational stores as of the call date, and is optimistic about future growth, particularly in the Hindi Heartland.

    Highlights

    8
    • 9M FY25 Revenue: INR 1,773 crores, up 30% YoY from INR 1,367 crores.

    • 9M FY25 PAT: INR 89.51 crores, up 29% YoY from INR 69.22 crores.

    • Q3 FY25 Revenue: INR 508 crores, up 23% YoY from INR 413 crores.

    • Q3 FY25 EBITDA Margin: 9.16%.

    • Q3 FY25 PAT: INR 24.22 crores, up 9.25% YoY.

    • 9M FY25 Same-Store Sales Growth (SSSG): 15%.

    • Q3 FY25 Same-Store Sales Growth (SSSG): 13%.

    • Store Count: 161 at end of Q3 FY25, 167 as of call date.

    What Changed2

    vs Q4 FY25

    Guidance items6 → 5 (-1)Risks discussed3 → 4 (+1)
    Key financials

    Metrics

    15

    Periods

    4

    Headline

    1
    • Store Count (as on call date)
      167 stores

    Q3 FY25

    7
    • Revenue
      ₹508.45 Cr
      YoY+23%
    • Gross Margins
      15.6%
    • EBITDA
      ₹46.5 Cr
    • EBITDA Margin
      9.2%
    • PBT
      ₹31.2 Cr

    9M

    6
    • FY25 Revenue
      ₹1,773 Cr
      YoY+30%
    • FY25 PAT
      ₹89.51 Cr
      YoY+29.0%
    • FY25 Gross Margins
      15.4%
    • FY25 EBITDA
      ₹161.75 Cr
    • FY25 EBITDA Margin
      9.1%

    end Q3 FY25

    1
    • Store Count
      161 stores

    Segment breakdown

    BiharJharkhandUttar Pradesh
    Q3 FY25 Revenue Contribution79%13%9%
    9M FY24 Revenue Contribution81%11%8%
    Heatmap· 3 shared metrics

    Capital allocation

    3
    medium confidence
    CategoryHeadline
    Capex

    Capex disclosed

    Debt

    Debt disclosed

    Liquidity

    Liquidity disclosed

    Management stated that liquidity is not a challenge for the company.

    Guidance & targets

    5
    CategoryTargetPriority
    Store Count
    Total Stores
    200 stores
    High
    Store Count
    Additional Stores
    8 to 10 additional stores
    High
    Store Count
    Total Stores
    175 stores
    High
    Profitability
    EBITDA Margin
    8% to 10%
    Medium
    Revenue
    Revenue Growth
    20% to 25%
    Medium

    FY25 Store Expansion Target

    By end of FY25
    Current167 operational stores (as of call date)
    Target175+ stores

    Why it matters

    To track the company's aggressive expansion strategy and its ability to meet its store opening targets.

    In this financial FY '25 we have already opened 22 stores and surpassing our guidance, we are on track to open 8 to 10 additional stores by the end of financial year '25.

    How to verify

    key_financials.metrics[label='Store Count (end Q3 FY25)']

    Risks & concerns

    4
    RiskSeverity

    Sluggish demand and macroeconomic challenges (high inflation, high interest)

    Sluggish demand due to macroeconomic factors like high inflation and interest rates impacted Q3 performance, but expected to ease.Management acknowledged

    medium

    Gross margin contraction

    Gross margins contracted in Q3 due to weak demand post-October festive season and inventory pressure, but expected to stabilize.Management acknowledged

    medium

    Increased operating expenses from new stores

    Operating expenses increased due to the opening of many new stores that are yet to mature and contribute fully to profitability, viewed as temporary.Management acknowledged

    low

    Disruption to store operations due to large events (Kumbh Mela)

    Stores in Prayagraj were impacted by the rush of the Kumbh Mela, but other stores in UP performed well, and the event is expected to boost regional income.Analyst acknowledged

    low

    Q&A highlights

    8

    “In my opinion, in fact, there has been a sluggish demand. This is only because of the macroeconomic in nature. In the sense with high inflation and high interest, this is the main factor. And I think in coming months, I think it is going to ease off.”

    Addresses the underlying demand environment and management's outlook on recovery, citing macroeconomic factors.

    asked by Devanshu Bansal

    2 min read6 chapters

    Detailed Narrative

    01

    Strong Q3 and 9M FY25 Financial Performance

    Aditya Vision reported robust financial results for Q3 and the first nine months of FY25. For 9M FY25, revenues surged 30% year-on-year to INR 1,773 crores, with Profit After Tax (PAT) growing 29% to INR 89.51 crores. Q3 FY25 saw a 23% increase in revenue to INR 508 crores, and PAT grew 9.25% year-on-year to INR 24.22 crores. The company maintained a healthy 9.16% EBITDA margin in Q3 FY25 and achieved an impressive 15% Same-Store Sales Growth (SSSG) for the nine-month period.

    02

    Strategic Store Expansion and Geographic Penetration

    The company continued its aggressive store expansion strategy, opening 5 new stores in Q3 FY25, bringing the total count to 161 by the end of the quarter and 167 as of the call date. Aditya Vision is expanding beyond Purvanchal in Uttar Pradesh, with 8 stores operational in Central UP, including 4 in Lucknow. Management aims to open 8-10 additional stores by the end of FY25, targeting a total of 175+ stores, and is confident of surpassing 200 stores by FY26.

    03

    Demand Environment and Gross Margin Trends

    Management acknowledged a sluggish demand environment in Q3 FY25, primarily due to macroeconomic factors like high inflation and interest rates, which impacted consumption post-festive season. This subdued demand, coupled with inventory management, led to a contraction in gross margins during the quarter, which stood at 15.58%. However, the company expects gross margins to stabilize in the coming quarters as demand is anticipated to ease off.

    04

    Capital Utilization and Operating Expenses

    Aditya Vision confirmed the utilization of INR 282 crores raised previously, which was deployed for a combination of inventory build-up for the summer season and capital expenditure for new store openings. The increase in operating expenses was attributed to the significant number of new stores (around 30 between last quarter and this quarter) that are yet to reach maturity. Management views this as a temporary effect, expecting operating leverage to improve as these new stores mature and contribute more to the top line.

    05

    Optimistic Outlook Driven by Regional Factors

    Despite the overall subdued demand, management expressed optimism for future growth, particularly in the Hindi Heartland. This positive outlook is supported by the company's expanding presence in heat-prone areas of UP and the anticipated economic boost from events like the Kumbh Mela. While local stores in Prayagraj experienced some disruption due to the Mela's rush, the event is expected to invigorate the broader region, benefiting other stores and contributing to a strong Q1 FY26.

    06

    Product Category Seasonality and Brand Performance

    The company highlighted the mixed seasonality across product categories, with summer cooling products like ACs and refrigerators having the highest contribution. Other categories like washing machines perform well during monsoons, and heating products like geysers see increased sales in winter. Management noted that Korean brands maintain their share, and other leading brands like Whirlpool and Godrej are significant contributors, though specific revenue contributions by brand are not disclosed.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.