Aditya Infotech Limited — Q1 FY26 earnings call

Call held 20 Aug 2025

Management summary

Aditya Infotech (CP PLUS) delivered a strong maiden earnings call following its August 2025 listing, characterized by significant margin expansion and a massive de-leveraging of the balance sheet. The company is pivoting from a distribution-heavy model to a high-margin consumer brand manufacturer, aided by new government STQC security norms that disqualify major Chinese competitors. Management expressed high confidence in beating industry growth rates, backed by a ₹200 crore capex plan and aggressive backward integration.

Highlights

  • Revenue from operations grew 16.4% YoY to ₹740 crores in Q1 FY26.

  • EBITDA stood at ₹64.9 crores, representing a 47.5% YoY growth with margins expanding 180bps to 8.7%.

  • PAT increased by 46.1% YoY to ₹32.9 crores, with PAT margins at 4.4%.

  • Successfully listed on NSE and BSE on August 5, 2025, raising ₹1,300 crores (₹500 crores fresh issue).

  • Utilized IPO proceeds to reduce gross debt by 89%, from ₹423 crores (May 31) to ₹48 crores.

  • Management guided for FY26 revenue of ₹3,900-4,100 crores, implying >25% annual growth.

  • Targeting EBITDA margins of 10-11% and PAT margins of 6-7% for the full year FY26.

  • Manufacturing capacity to be expanded from 1.5 million to 2.4 million units per month by Q1 FY27.

Key financials

  1. Revenue ₹740 Cr +16.4%YoY
  2. EBITDA ₹64.9 Cr +47.5%YoY
  3. EBITDA Margin 8.7%
  4. PAT ₹32.9 Cr +46.1%YoY
  5. Gross Debt ₹48 Cr -89%YoY

What they filed

Q1 FY27: revenue up 89.5%, net profit up 330.3% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue669 830 977 740 920 +38%1,139 +37%1,422 +46%1,402 +89%
EBITDA39 69 98 61 109 +179%140 +103%257 +162%204 +234%
Net profit234 40 55 33 70 −70%96 +140%169 +207%142 +330%
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

  • Small-Medium Businesses (SMB)
    60% Revenue Contribution
  • Enterprise and Government
    30% Revenue Contribution
  • Consumer Home
    10% Revenue Contribution

Guidance & targets

Revenue

  • Full Year Revenue Revenue · FY26 · High confidence ₹3,900 - 4,100 crores
    On the revenue front, we expect to close in the range of Rs. 3,900 to Rs. 4,100 crores, delivering over 25% annual growth.

    — Aditya Khemka, Managing Director

Margin

  • EBITDA Margin Margin · FY26 · High confidence 10-11%
    The EBITDA margin is expected to be in the range of 10% to 11%

    — Aditya Khemka, Managing Director

Profitability

  • PAT Margin Profitability · FY26 · High confidence 6-7%
    and the PAT margins are expected to close in the range of 6% to 7%

    — Aditya Khemka, Managing Director

Capex

  • Total Capital Expenditure Capex · next 2 years · Medium confidence ₹200 crores
    So it's probably about Rs. 200 odd crores at the moment... in the next two years this kind of CAPEX will be there.

    — Aditya Khemka, Managing Director

Capacity

  • Monthly Manufacturing Capacity Capacity · Q1 FY27 · High confidence 2.3 - 2.4 million units

    From 1.5 million units today

    and we plan to scale up to 2.3 million, 2.4 million by Q1 of next financial year.

    — Aditya Khemka, Managing Director

Risks & concerns

  • Import Dependence for Critical Components

    medium

    60% of the Bill of Materials (BOM), specifically semiconductors (SoC, memory), remains import-dependent as India lacks fabs.

    Management acknowledged

  • Transitionary Inventory Overhang

    low

    Non-STQC compliant inventory in the channel needs to dry up before the full impact of new norms and higher-priced models kicks in.

    Both acknowledged

  • Seasonality of Business

    low

    Q1 is historically the weakest quarter, contributing only 18% to 20% of annual business.

    Management acknowledged

Areas of evasion (1)

  • Declined to give specific volume breakups between IP and Analog cameras for the current quarter, citing it as 'difficult' for the call.

Q&A highlights

3 direct
Impact of STQC Norms and Competition Direct
The neighboring country brands... cannot be from those countries or those brands. Those will generate a vacuum in the market which is the opportunity for domestic brands.

Confirms that new government regulations effectively ban major Chinese competitors like Hikvision from key segments, creating a massive market share opportunity for CP PLUS.

Asked by Rajesh Kothari, AlfAccurate Advisors

Margin Differential between Distribution and Own Brand Direct
I think the differential is almost 3x because that's a pure distribution business... with the new norms, most of these brands from the neighboring country are getting disqualified.

Reveals that phasing out the Dahua distribution business in favor of the CP PLUS brand will be a major driver for the guided margin expansion from 8.7% to 11%.

Asked by Dhruv Jain, Ambit Institutional Equities

Pricing Differential for STQC Compliant Products Direct
In the low-end, entry-level... you need to double up the memory, put in a lot of fortifying technology... the differential will be over 20% on the cost.

Explains that compliance with new security norms requires better hardware, which will lead to higher Average Selling Prices (ASPs) and potentially better value growth.

Asked by Dhruv Jain, Ambit Institutional Equities

2 min read 5 chapters

Detailed narrative

Regulatory Reset via STQC Norms

The Ministry of Electronics and Information Technology (MeITY) has mandated that from April 9, 2025, all network CCTV cameras sold in India must be STQC certified. This regulation is a game-changer for CP PLUS as it effectively disqualifies low-cost Chinese imports that lack basic security features. Management noted that while global brands are still in the process of certifying, CP PLUS already has the largest portfolio of STQC-certified products, positioning them to capture a 'vacuum' left by exiting competitors.

Strategic Pivot to High-Margin Manufacturing

The company is aggressively transitioning from its legacy as a distributor (e.g., Dahua) to a consumer-brand manufacturer. The margin differential between the distribution business and the CP PLUS brand is approximately 3x. As the Dahua business is expected to decline by 25-30% this year due to new norms, the shift to the 100% owned CP PLUS brand will be the primary driver for EBITDA margins expanding from 8.7% to a guided 10-11%.

Post-IPO Balance Sheet Transformation

Following its August 2025 listing, CP PLUS utilized ₹375 crores from the fresh issue to repay debt. This has reduced gross debt from ₹423 crores to just ₹48 crores, an 89% reduction. This massive de-leveraging is expected to significantly lower finance costs and free up internal accruals to fund the ₹200 crore capex planned for the next two years, which will be focused on factory expansion and backward integration.

Aggressive Capacity and Localization Targets

CP PLUS currently operates India's largest single-location surveillance manufacturing facility in Kadapa with a capacity of 1.5 million units per month. Management plans to scale this to 1.9 million next quarter and 2.3-2.4 million by Q1 FY27. While 60% of the BOM (semiconductors) is still imported, the company has localized 40% (enclosures, cables, connectors) and is starting in-house lens manufacturing to further improve margins.

Market Segmentation and Growth Outlook

The company's revenue is well-balanced across SMB (60%), Enterprise/Government (30%), and Consumer Home (10%). Management is targeting over 25% revenue growth for FY26, aiming for ₹3,900-4,100 crores. This growth is expected to outpace the industry CAGR of 16.5%, driven by rapid urbanization and government infrastructure spending. The company also hinted at 'baby steps' toward an export opportunity under a 'China Plus One' strategy in the coming years.

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