Aditya Infotech Q4 FY26: Margins Jump, Guidance Upgraded, Supply Chain Risks Still Real

Aditya Infotech Limited, the company behind the CP PLUS video surveillance brand, closed FY26 with sharp profitability improvement and an upgraded FY27 outlook. In Q4 FY26, consolidated revenue rose to INR 1,422 crore, up 45.5% year on year. EBITDA climbed to INR 258 crore, up 162.4%, with margin expanding to 18.1%. Profit after tax for the quarter rose to INR 169 crore, up 207.7%.

For the full year, revenue grew to INR 4,221 crore, up 35.6%. EBITDA more than doubled to INR 579 crore, lifting EBITDA margin to 13.7% from 8.3% in FY25. Adjusted PAT for FY26 came in at INR 368 crore, up 166.1%.

Behind the headline growth, management framed FY26 as a transition year for the Indian surveillance industry as the STQC mandate drove market consolidation and accelerated localization. The company stated its market share reached about 45.4% in Q3 FY26, positioning it as a leading player in the organized segment.

FY26 performance: mix shift and operating leverage show up in margins

The consolidated profit and loss statement highlights how strongly margins expanded. Q4 FY26 gross margin rose to 31.8% from 22.4% in Q4 FY25. Full-year gross margin moved to 28.8% from 21.5%.

Management attributed the Q4 gross margin jump to a combination of price increases taken in Q4, availability of low-cost inventory, and a richer product mix. On the earnings call, management also pointed to higher-end project SKUs getting STQC-certified in the second half, which supported the mix shift in Q3 and Q4.

Importantly, management cautioned that profitability growth may not always mirror revenue growth because the company is passing cost increases gradually and there can be a time lag before higher costs are fully reflected in selling prices.

The ratio set also shows a balance sheet improvement. Debt to equity reduced to 0.06 from 0.4, and management linked the fall in finance cost to debt repayment using IPO proceeds.

Supply chain disruption: multi-SoC strategy and gradual price hikes

While growth and margins were strong, the central operating theme remains supply chain uncertainty. Management described persistent shortages across critical components such as SoC, DDR, flash, and sensors, along with rising freight and insurance costs linked to geopolitical tensions. A specific structural issue highlighted was the end of DDR3 production by major memory vendors as capacity shifts towards higher DDR generations driven by AI-related demand.

In response, the company is building a multi-SoC product strategy and diversified procurement approach. Management listed non-Chinese SoC partnerships including Ambarella, Qualcomm, Augentix, Innofusion, Novatek, and Realtek, and also cited alignment with sensor vendors such as SmartSens, Sony, and SOI.

On pricing, management said the company took a 6% to 8% price hike in January 2026 and is now moving to monthly phased increases rather than abrupt one-time hikes. The intent is to avoid a sudden shock to customers and maintain market stability, even if that creates a time lag in margin realization.

This strategy also has working-capital implications. FY26 cash conversion days rose to 78 from 67. Management said this is partly because the company is securing chips and memory in advance and, in some cases, making advance payments, which affects creditor days.

Backward integration and capacity expansion: the capex pipeline

Aditya Infotech’s expansion narrative is anchored in localization and backward integration. The investor presentation and earnings call outlined multiple initiatives, including localization of cables and components, in-house housing manufacturing, lens assembly, and expansion of manufacturing footprint.

The company stated that manufacturing capacity has reached 2.5 million units per month at the Kadapa plant, with a target to reach 90% to 100% utilization. It also discussed shifting HD analog job work to an EMS player with a planned capacity of about 0.5 million units per month.

Key projects and timelines mentioned include:

• Housing and enclosure plant in Kadapa to be operational in two phases: Phase 1 by Q2 FY27 and Phase 2 by Q4 FY27, with a targeted annual capacity of 30 million units.
• Lens assembly line being commissioned with scaling potential up to 1 million lenses per month.
• Joint venture with Orient Cables for LAN and CCTV cable manufacturing in Rajasthan, with commercial operations expected between Q2 and Q3 FY27.
• Proposed Noida expansion, including a facility in Sector 68 expected to be operational by Q4 FY27.
• A longer-term target to double production capacity by FY28.

Management discussed capex for FY27 at roughly INR 200 to 300 crore, noting that plans are being worked upon after the upward revision in FY27 guidance.

Brand and go-to-market: CP PLUS core, new brands for price segments

The company continues to position CP PLUS as the flagship. Management stated that CP PLUS contributed 86% of overall FY26 revenue. It also indicated that IP products formed about 73% of the CP PLUS portfolio for the year, underscoring the shift toward higher-value IP solutions.

Alongside the core brand, the company is building a multi-brand strategy. It launched two additional brands, NEXIVUE and EYRA, aimed at mass-market and price-sensitive segments. Management said NEXIVUE has received STQC and BIS certifications and has started shipping, while EYRA is expected to reach markets during H1 FY27.

Marketing investments were also highlighted, including celebrity partnerships in Tamil Nadu and Kerala and IPL association through Punjab Kings title sponsorship.

FY27 outlook: higher revenue target, margins guided to be structurally higher

The company upgraded its FY27 guidance and expects revenue in the range of INR 6,000 to 6,500 crore. It guided EBITDA margins of 14% to 15% and PAT margins of 8.5% to 9.5%.

Management expects the broader CCTV market to grow in units by around 15% to 16%, while it aims to grow volumes in the range of 25% to 30% in FY27. It also indicated that ASP recovery per unit could rise by 20% to 25%, driven by both price actions and portfolio mix.

The most important qualifier remains the cost environment. Management expects component cost escalation to remain a factor until 2027. While price increases are being passed on, the company expects a lag, which can make quarter-to-quarter margin progression uneven.

The FY26 outcome shows what the company can deliver when mix, pricing, localization benefits, and operating leverage align. FY27 will test whether this can be sustained in a volatile component market while the company executes on capacity expansion, backward integration projects, and phased commercialization of AI-led initiatives.