Aditya Vision FY26: Growth held up despite a weak summer

Aditya Vision ended FY26 with a reminder that scale and execution can cushion a bad season, but they do not eliminate it. The consumer electronics retailer reported revenue of INR 2,672 crore for FY26, up 18.2% year on year. EBITDA grew 11.7% to INR 228 crore, while PAT rose 10.8% to INR 117 crore.

The year was unusual for the company’s core cooling categories. Management highlighted prolonged and unseasonal rainfall through much of the first half, which reduced the typical summer lift. Yet the company still posted a sharp recovery in the second half. Q4FY26 revenue rose 28.4% to INR 625 crore, and Q4 PAT increased 36.0% to INR 22 crore.

A key narrative in both the presentation and the concall was the shift away from an H1-heavy model. Historically, Q1 and Q2 carried a large portion of annual sales. In FY26, management pointed to a stronger Q3 and Q4, describing the company as moving toward a more balanced, all-season profile.

FY26 performance: steady growth, softer margins

For FY26, the reported gross margin was 15.6%, marginally lower than FY25. EBITDA margin was 8.5% versus 9.0% in FY25. PAT margin was 4.4% versus 4.7% in FY25.

Management linked the margin pressure primarily to mix and seasonality. In the concall, it noted that cooling categories like air conditioners, coolers, and refrigerators typically carry better margins, and a weak summer meant the company could not capitalize fully on that opportunity. Separately, management also said that in Q4, mobile phone average selling price rose materially, increasing the share of lower-margin digital gadgets in the mix.

Store growth: scale first, operating leverage later

FY26 marked another year of aggressive footprint expansion. The company opened 32 new stores in FY26, taking the total to 207 stores as of March 31, 2026. Retail footprint expanded 22% year on year to about 9.14 lakh square feet.

The company emphasized that it has added 102 stores in the last three years (FY24 to FY26), nearly matching the 105 stores added over the previous two decades. Management described this as a defining phase and argued that profitability should follow as the newer stores mature.

The presentation outlined a clear store maturation arc. Year 1 is setup and ramp-up to breakeven. Year 2 is a growth phase with improving profitability. Year 3 is the path to maturity where profitability normalizes. Management repeated this logic in the concall, suggesting that as the store base becomes more mature, operating expenses should come under better control.

On unit economics, the company shared benchmarks such as average capex per store of INR 0.8 to 0.9 crore, working capital per store of INR 2.75 to 3.00 crore, and store-level breakeven typically in 6 to 12 months, with a payback period of about three years.

Product mix and demand mix: a gradual shift

The company’s FY26 product mix was shown as 60% large appliances, 24% digital gadgets, and 16% small and other appliances. This was a shift from FY25, when large appliances were 64% and digital gadgets were 21%.

The company also showed an effort to smooth seasonality through the year. Quarterly revenue share for FY26 was indicated as 35% in Q1, 17% in Q2, 24% in Q3, and 23% in Q4. The narrative was that festive demand in Q3 and early summer and marriage season in Q4 are making H2 more meaningful.

Operationally, bill cuts rose 18.9% in FY26 to 11.90 million. Average selling price increased slightly to INR 22,088 in FY26 from INR 21,894 in FY25.

Inventory strategy: advantage with a balance sheet cost

A prominent management discussion was inventory positioning ahead of FY27. Inventory stood at INR 840 crore at March 2026, and inventory days increased to 124 in FY26. Management said this was strategic and linked it to two external factors.

First, it discussed BEE norms changes for air conditioners, noting that new products were priced higher and that prices increased by about 8% to 10%. Second, it referenced supply-side concerns highlighted by OEMs in relation to geopolitical disruptions and potential gas shortages, arguing that it built inventory early to protect availability during peak demand.

This approach may help the company gain share if the industry faces shortages, but it also raises the importance of disciplined working capital management. Working capital days increased to 98 in FY26. Management also stated that operating cash flow will depend heavily on how the company chooses to build inventories and manage working capital, and therefore should not be treated as a straight benchmark.

The presentation did show an improvement in cash generation, with a cash flow figure of positive INR 75.0 crore in FY26 versus negative INR 40.8 crore in FY25.

Geography: Bihar still dominates, UP and new states are the growth engine

Aditya Vision’s strategy is framed around a state-by-state expansion across the Hindi heartland. As of FY26, it had 118 stores in Bihar, 33 in Jharkhand, 53 in Uttar Pradesh, and 3 in Chhattisgarh.

In the concall, management stated that Bihar contributed about 75% of FY26 revenue, with Uttar Pradesh at about 13% and Jharkhand at about 12%. It also said that many Uttar Pradesh stores were opened late in the year, limiting their full-year contribution.

The company has indicated that it entered Chhattisgarh earlier than planned and that it is on track to enter Madhya Pradesh in the current financial year. Expansion was described as calibrated and cluster-led, while continuing to scale in Uttar Pradesh.

What to watch

Management’s tone on margins was pragmatic. It did not provide a specific timeline to return to 9% EBITDA margin, but it stated an EBITDA margin endeavor of 8% to 10%, with 9% described as a key target. It also linked margin potential to store maturation and improved operating leverage.

For near-term demand, management said April was very robust and that May began slightly colder, with an expectation of normal summer conditions returning soon.

The FY26 outcome shows a company that kept growth intact while dealing with weather-led disruption. But it also shows the trade-offs of rapid expansion and inventory-led positioning. The next phase will depend on two practical items: whether newer geographies scale without disproportionate opex drag, and whether the elevated inventory converts into sales without stressing working capital.