Aditya Infotech (AIL) manufactures and provides video security and surveillance products, solutions and services under the brand name ‘CP Plus‘. In addition, AIL offers solutions and services such as fully integrated security systems and security-as-a-service directly and through its distribution network who address the requirements of end-customers engaged in a broad range of sectors such as banking, insurance, real estate, healthcare, industrials, defense, education, hospitality, manufacturing, retail and law enforcement.

The company offers a diverse range of products including smart home internet of things (IoT) cameras, high definition (HD) analog systems, advanced network cameras, body-worn and thermal cameras, as well as long-range IR cameras, and AI-powered solutions (automatic number plate recognition, people counting, and heat mapping). For residential users, AIL offers video surveillance products, including smart Wi-Fi cameras, 4G-enabled cameras, dash cams, and more. In FY 2025, the company offered 2986 stock keeping Units (SKUs) across India and sold products across 550+ cities and towns.

AIL‘s operations are supported by a network of 41 branch offices and 13 return merchandise authorization (RMA) centers nationwide. The company‘s surveillance products are distributed through a network of over 1,000 distributors in tier I, tier II, and tier III cities, along with more than 2,100 system integrators.

The company operates 10 strategically located warehouses spread across the country, located in Delhi, Gurugram, Haryana and Noida, Uttar Pradesh in North India; Bhiwandi, Maharashtra, Ahmedabad, Gujarat and Indore, Madhya Pradesh in West India; Kolkata, West Bengal and Guwahati, Assam in East India; as well as Chennai, Tamil Nadu and Bengaluru, Karnataka in South India.

AIL‘s manufacturing facility is located at Kadapa, Andhra Pradesh with an installed capacity of 17.20 million units per annum and is spread over an area of 204,157.36 square feet.

In 2017, the company entered a joint venture agreement with Dixon Technologies (India)(Dixon) an electronic manufacturing services company in India, to expand its manufacturing operations by creating a captive manufacturing plant and leveraging Dixon’s expertise in manufacturing processes. On September 18, 2024, AIL acquired Dixon’s stake in the joint venture. Pursuant to the agreement dated July 8, 2024, Dixon subscribed to 7,305,805 equity shares of face value of Re 1 each of the company in exchange.

Object of the offer

The IPO consists of a fresh issue of Rs 400 crore and offer for sale of Rs 800 crore.

The selling shareholders include Aditya Khemka who will offload 7763022 equity shares at upper price band aggregating Rs 524 crore, Rishi Khemka will offload 2962963 equity shares at upper price band aggregating Rs 200.0 crore and other promoter group will offload 1125867 equity shares at upper price band aggregating Rs 76 crore.

The offer will be made at a discount of Rs 60 per equity share for employees of the company.

Out of the proceeds from the fresh issue, Rs 375 crore will be used for repayment/ prepayment/ redemption, in full or in part, of certain borrowings availed of by the company and the balance for general corporate purposes.

Strengths

AIL is the largest provider of video security and surveillance products, solutions and services in India in terms of revenues, with a market share of 20.8% in FY2025.Its suite of security-related service offerings and end-to-end solutions enables its customers across India to meet their security and surveillance requirements and to save operational and administrative costs in managing diverse security requirements, thereby facilitating efficient problem-solving.

AIL has a pan-India sales, distribution and service network catering to a diversified customer base. Its products are sold in over 550 cities and towns. It operates through a network of 41 branch offices and 13 RMA centers across India. The company’s surveillance products were sold through its network of over 1000 distributors in tier I, tier II and tier III cities, and over 2,100 system integrators in FY2025.

The company has a comprehensive portfolio of electronic security and surveillance products, solutions and services, providing end-to-end security solutions across verticals. AIL’s ‘CP PLUS‘ and ‘Dahua’ brands are amongst the prominent brands for CCTV and security products in India in terms of diversity of offerings as of March 31, 2025.

The company has advanced manufacturing and research and development capabilities with focus on quality. The company’s manufacturing facility in Kadapa, Andhra Pradesh is the third largest CCTV manufacturing facility in the world in terms of units manufactured in FY2025 with a capacity of 17.20 million units per annum, as of March 31, 2025.

AIL collaborates with various technology partners to design and innovate products and provide solutions tailored to specific customer requirements. It has entered into arrangements that allow it to augment its manufacturing competencies, technology prowess and global technology know-how.

Weaknesses

Variations in demand and changes in consumer preference towards CCTV cameras, NVRs, DVRs, PTZs cameras and other surveillance equipment could have an adverse effect on the company’s business as these products together contributed 77.5% of the total revenues in FY2025.

AIL is dependent on a limited number of suppliers for parts, materials and products and disruption in supply chain can impact the operations of the company.

The company’s manufacturing facility is located in Andhra Pradesh, which exposes the company’s operations to potential risks arising from local and regional factors such as adverse social and political events, weather conditions and natural disasters.

The company relies primarily on its synergies with Dixon Technologies (India), for the manufacture of its products. Any disruption in its relations may adversely affect the company’s business.

Dahua brands contributed around 25% of the total revenue in FY2025 and any disruption in the supply of products for sale by Dahua at commercially viable terms, or demand thereof, may adversely affect the financial condition of the company.

The company is subject to strict quality requirements. Sales of its products is dependent on its quality controls and standards. Any failure to comply with quality standards may adversely affect the operations of the company.

Contingent liabilities as on March 31, 2025, stood at Rs 157.3 crore.

Valuation

In FY2025, consolidated sales were up by 11.8% to Rs 3111.87 crore compared to FY2024. Growth in revenues was mainly due to increase in on account of increase in demand for CCTV cameras and equipment. OPM declined by 6 bps to 7.95%, which led to 10.9% increase in operating profit to Rs 247.33 crore. Other income declined 18.3% to Rs 11.05 crore. Interest cost increased 35.3% to Rs 41.81 crore and depreciation increased 98.1% to Rs 31.12 crore.PBT before EO stood at Rs 185.45 crore in FY2025 as against Rs 189.86 crore in FY2024. The company earned an exceptional gain of Rs 248.63 crore in FY2025 as against exceptional loss of Rs 25.24 crore in FY2024.PBT after EO stood at 434.08 crore as against Rs 164.62 crore in FY2024. Tax expenses for FY2025 was Rs 82.71 crore compared to tax expense of Rs 49.45 crore in FY2024. Net profit increased 205.1% to Rs 351.37 crore in FY2025.

On September 18, 2024, the company allotted 7305805 equity shares on preferential basis through private placement to Dixon Technologies (India) at Rs 340.32 per equity share raising a cumulative sum of Rs 248.6 crore.

FY2025 EPS on post-issue equity works out to Rs 12.81. At the upper price band of Rs 675, P/E works out to 53.0x.

The total outstanding borrowings were Rs 475.0 crore on a consolidated basis as of March 31, 2025. The plan is to repay 90.8% of the debt using the issue proceeds. This will significantly reduce interest costs and boost profits. The FY2025 PAT would be 382.11 crore (as against PAT of Rs 351.37 crore) and EPS would be Rs 15.43 if 90.8% of the interest cost is eliminated, assuming all other factors, including the tax rate, remain unchanged. Debt/Equity of the company will moderate to 0.02x post-IPO as against Debt/Equity of 0.40x pre-IPO. The adjusted P/E ratio, at the upper price band, moderates to 43.74x.

The company does not have any listed peers.