Summary
Aditya Vision Limited - Q3 FY 2026 Earnings Call Summary Tuesday, January 27, 2026 4:00 PM
Event Participants
Executives 2 Yashovardhan Sinha (Chairman and Managing Director), Yosham Vardhan (Whole Time Director)
Analysts 5 Aditya Bhartia (Investec), Aliasgar Shakir (Motilal Oswal), Aniruddha Joshi (ICICI Securities), Manoj Gori (Equirus Capital), Onkar Ghugardare (Shree Investment), Pradyumna Choudhary (JM Financial), Yash Sonthaliya (Edelweiss)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue (Q3) | ₹649 crores | +28% YoY; driven by strong festive demand (37% growth during Durga Puja to Chhath Puja). |
| Revenue (9M) | ₹2,047 crores | +15% YoY; recovery from a “washout” Q1 impacted by adverse weather. |
| EBITDA (Q3) | ₹53 crores | +14% YoY; absolute growth maintained despite moderating margins. |
| EBITDA Margin (9M) | 8.7% | -42 bps YoY; impacted by higher opex from new store launches and marketing in UP. |
| PAT (Q3) | ₹27 crores | +13% YoY; includes ₹1.5 crore exceptional expense for new labor code provisioning. |
| SSSG (Q3) | 17% | Significant improvement from 12% in Q3 FY25; 9M SSSG stands at 5%. |
| Store Count | 192 stores | On track to exceed 200 stores by end of FY26; 30 stores opened in last 12 months. |
| Inventory | Not Specified | Moderately higher; management opportunistically stocked pre-BEE norm ACs at discounts. |
Geographic & Segment Commentary
- Bihar: Remains the dominant market contributing 75% of Q3 revenue. Management is moving into a “fortification” phase here, adding stores only in strategic locations as the market reaches maturity.
- Uttar Pradesh: Contributed 13% of Q3 revenue. Currently present in only 24 out of 75 districts, with recent expansion focused on larger cities like Lucknow and a strategic shift toward Western UP.
- Jharkhand: Contributed 13% of Q3 revenue. The company has covered almost all districts in the state, with only 1-2 districts remaining for entry.
Company-Specific & Strategic Commentary
- Geographic Expansion: Management announced plans to enter Chhattisgarh and Madhya Pradesh within the calendar year. Chhattisgarh entry may occur before the end of FY26, focusing on 8-10 affluent cities.
- Category Performance: Washing machines and Panel TVs both grew by >30% YoY in Q3. Mobile phones grew 20% despite anticipated price hikes of 4-6% due to semiconductor costs.
- Inventory Strategy: The company purposefully built an AC inventory cushion to take advantage of OEM discounts prior to BEE energy efficiency norm changes, anticipating 5-7% higher costs for new compliant models.
- Operating Leverage: While opex is currently high (up ~60% YoY) due to 96 store openings in three years, management expects a “pyramid effect” as these stores mature over their typical 36-month cycle.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue Growth | 20% - 25% (FY27) | Expected “very high” growth in Q1 FY27 due to low base and pent-up cooling demand. |
| Store Openings | 30+ stores per year | Maintaining target to cross 200 stores by FY26; expansion will be aggressive in UP/MP/Chhattisgarh. |
| Profitability | Stable/Improving | EBITDA margins for FY26 expected to remain around 8.7% or better as Q4 sentiment is robust. |
Risks & Constraints
| Risk | Context |
|---|---|
| Seasonality/Weather | Q1 FY26 was an “outlier” washout due to an extended monsoon and weak summer, severely impacting high-margin cooling categories. |
| Margin Pressure | Rapid expansion into high-rent cities (Lucknow) and aggressive promotional spends in new territories are temporarily weighing on PBT margins. |
| Regulatory Changes | Implementation of new labor codes resulted in a ₹1.5 crore onetime provisioning expense in Q3. |
Q&A Highlights
Category & Inventory
- Question: Which products drove growth and what is the status of AC inventory? (Aniruddha Joshi)
- Answer: Washing machines and TVs grew >30%. We opportunistically stocked a “sizable” number of ACs to benefit from discounts before BEE norm changes (Yashovardhan Sinha).
Margin Compression
- Question: Why did margins contract despite 17% SSSG? (Aliasgar Shakir)
- Answer: Opex was inflated by onetime marketing/promotional costs in UP and employee bonuses. Many new stores (30 in the last year) have not yet reached maturity (Yashovardhan Sinha).
New Market Entry
- Question: What is the strategy for Chhattisgarh and MP? (Pradyumna Choudhary)
- Answer: These markets are similar to Jharkhand; we will target 8-10 affluent cities in Chhattisgarh and 15 in MP where competitors aren’t branding as effectively as AVL (Yashovardhan Sinha).
Expansion Funding
- Question: Will you require more fundraising for expansion? (Onkar Ghugardare)
- Answer: No. Internal accruals and existing bank lending are sufficient. Inventory cycles are managed so liquidation occurs before OEM payments are due (Yashovardhan Sinha).
Key Takeaway
Aditya Vision delivered a strong Q3 FY26 recovery with 28% revenue growth and an impressive 17% SSSG, effectively offsetting the “washout” experienced in the cooling-heavy Q1. While EBITDA margins moderated to 8.7% for the nine-month period due to aggressive marketing in Uttar Pradesh and costs associated with 17 new store openings, the company maintained a healthy gross margin of 15.8% in Q3. Strategically, the firm is pivoting towards Western UP and entering Chhattisgarh and Madhya Pradesh to sustain its growth trajectory, aiming to cross the 200-store milestone by year-end. Management remains optimistic about FY27, citing pent-up demand for cooling products and an opportunistic inventory build-up of pre-BEE norm ACs. Despite short-term margin pressures from expansion and labor code provisions, the company’s “cluster-led” dominance in the Hindi heartland continues to drive volume growth. Forward performance depends on the stabilization of new stores and the normalization of summer weather patterns in 2026.
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