Aditya Infotech Q2 FY27 Earnings Call: Guidance Raised to Rs. 6,500-6,800 Cr, Capacity Doubling Via Rs. 650 Cr Capex (CPPLUS)

Aditya Infotech Ltd held its Q2 FY27 earnings call on November 05, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Record Quarter, But Management Flags Q2 as Not the Run Rate

• Q2 FY 2026-2027 revenue of Rs.1,746 crore — up 89.9% YoY vs Q2 FY 2025-2026 and 24.5% QoQ; EBITDA of Rs.307 crore (+177% YoY) at 17.6% margin (vs 14.8% in Q1 FY 2026-2027); PAT before exceptional Rs.220 crore (+214% YoY).
• H1 FY 2026-2027 revenue of Rs.3,148 crore (+89.7% YoY) — EBITDA Rs.515 crore at 16.3% margin; PAT before exceptional Rs.362 crore (+252% YoY); annualized RoE 26.9%; finance cost down 41% YoY. Management called it the strongest half in company history.
• Reported Q2 PAT of Rs.185.5 crore — after a Rs.34.4 crore one-time loss from a September 2026 short-circuit fire at the Kadappa plant; loss fully covered by insurance and claim already lodged.
• Base-effect caution — management noted H1 FY 2026-2027's ~90% growth was partly helped by a soft H1 FY 2025-2026 base, when STQC certification backlogs held back supply across the industry; H2 FY 2026-2027 growth will normalize while remaining strong.
• Mix shift continues — CP Plus contributed ~88% of Q2 FY 2026-2027 revenue (vs 86% in Q2 FY 2025-2026); IP products now ~79% of the portfolio, up from 71%.

FY27 Guidance Raised; Deliberate Margin Cushion for Share Gains

• FY 2026-2027 revenue guidance raised to Rs.6,500-6,800 crore — from Rs.6,000-6,500 crore, implying 54-61% growth over FY 2025-2026; PAT margin raised to 9-10% (from 8.5-9.5%).
• FY 2026-2027 EBITDA margin guidance maintained at 14-15% — despite 16.3% in H1 FY 2026-2027; analyst back-calculation implies H2 FY 2026-2027 margins of ~13%. Management is deliberately holding cushion amid a volatile component environment to fund its "competition crushing strategy" and market-share push, citing its track record of over-delivering versus guidance.
• Market share guidance of 43-45% by end of FY 2026-2027 — CP Plus share of the total Indian video surveillance market (including the unorganized segment) reached ~42% for the 12 months to September 2026, vs ~30% at IPO; management expects to keep gaining share through the rest of FY 2026-2027.
• Industry unit CAGR of 18-20% over 3-5 years from FY 2026-2027 — per management's first-time market sizing in the investor PPT (citing inconsistent third-party estimates); CP Plus endeavors to beat this market growth rate.
• Value growth to stay much higher than unit growth in FY 2027-2028 and onwards — management said nobody can predict when SoC and memory price increases will taper; prices are still rising though the rate of increase may slow.
• Competition watch — MD Aditya Khemka noted 40+ brands are now STQC certified per the online portal; the company sees no significant traction on the ground and no consistent supply from new entrants at present.

SoC/Memory Inflation Absorbed via Strategic Stocking and Staggered Pass-Through

• H1 FY 2026-2027 gross margin of 30.4% (+374 bps YoY) — on richer brand/product mix, deeper localization and operating leverage; Q2 FY 2026-2027 at 30% (flat YoY, below Q1 FY 2026-2027's 30.8%) as the company began absorbing higher SoC and memory input costs.
• SoC, DDR and flash prices have risen sharply across the electronics industry — management took strategic positions in SoC and memory (elevating inventory on the balance sheet) and passed on increases gradually to avoid a channel price shock.
• Management expects H2 FY 2026-2027 margins to be lower than Q2 FY 2026-2027 — Q2 should not be read as the run rate; CFO Yogesh Sharma attributed moderated price increases to a deliberate "cushion for competitive environment", not demand pushback.
• Backward-integration margin benefits not yet modeled — management confirmed EBITDA margins should settle above the 14-15% steady-state level as localization scales (2-3 year frame, i.e., by FY 2029-2030); housing plant benefits and the cable JV accrue only in FY 2027-2028, not H2 FY 2026-2027.

QIP-Funded Expansion and a Debt-Free Balance Sheet

• QIP completed in September 2026 raising Rs.1,500 crore — all borrowings repaid in October 2026; company now debt-free, with lower finance costs to show from H2 FY 2026-2027. Cash and equivalents were Rs.1,434 crore vs borrowings of Rs.363 crore at 30 September 2026.
• Capex plan of ~Rs.650 crore — targeting a doubling of manufacturing capacity by late FY 2028-2029 to early FY 2029-2030; ~Rs.100 crore spent in H1 FY 2026-2027 per the analyst. Expansion spans Kadapa Phase 3 (additional 22 acres acquired) and Greater Noida (civil construction to begin in Q3 FY 2026-2027), with new capacities online in 18-24 months (i.e., during FY 2028-2029).
• Kadappa plant capacity at 2.5 million units/month — to be more than doubled via Kadappa Phase 3 and a new QIP-funded Greater Noida facility (period unspecified); Greater Noida lens plant planned at 2 million lenses/month (period unspecified).
• Localization of four component categories — lenses, cable, housing enclosures and IoT modules; Kadapa housing/enclosures plant begins trials in Q3 FY 2026-2027 with commercial production from Q4 FY 2026-2027; cable plant goes live in Q4 FY 2026-2027.
• Receivable days improved to 87 in Q2 FY 2026-2027 — from 93 in Q1 FY 2026-2027 and 105 in Q2 FY 2025-2026; Anoop Nair attributed the improvement to a conscious effort to keep receivables tight, driven by efficiencies and team execution rather than confirming a structural shift. Management expects the same blended receivable level across categories (Aira, CP, CP Plus Pro) going forward (period unspecified).
• Inventory elevated by design — reflecting deliberate SOC/memory stocking to secure supply and cost; management expects working capital to come down as component positions are used up, though with ~90% H1 FY 2026-2027 revenue growth, most operating cash flow is absorbed by growth.

Capability-Led Evolution Toward Solutions, Cloud and AI

• Rs.45.4 crore investment for a 30% stake (fully diluted) in Blue KGraph AI Solutions — a video compression layer on standard H.264 that can cut storage and bandwidth by up to 90%, needs no GPU, and works with cameras already installed in the field; company to hold one board seat and one observer seat; completion subject to customary conditions.
• Blue framed as a tech play, not a revenue driver — MD Aditya Khemka: "more of a tech-led thing and less of a revenue or EBITDA accretive"; services, cloud storage and AI analytics revenue impact expected only "in the longer term"; management gave no specific revenue timeline when asked about the next 3 to 5 years.
• "CPPLUS 2.0" plan — an internally labeled effort to evolve from a hardware company into a solutions/services/cloud company with a global footprint and an AI focus; management declined to disclose specific targets. Three acquisition filters: capabilities (AI, cloud, cloud storage and storage algorithms IP), product adjacencies, and geographic expansion.
• Solutions/recurring-revenue model is an add-on, not a shift away — management aims to replicate the "CCTV to the masses" playbook by taking cloud storage and AI analytics to a mass level; too early to quantify contribution (period unspecified).
• Export entry framed over 18-24 months from the Q2 FY 2026-2027 call — management has "defined a time frame" but stated "we don't want to name the markets right now"; initial focus on markets conducive under a "China plus one" strategy. Go-to-market not yet finalized: options include own brand, partnership, inorganic moves, or ODM supply.
• Execution steps underway — an R&D office in Taiwan and building a Pro series, feeding into a larger expansion and export strategy laid out over the next 18-24 months.

Multi-Brand Pyramid Builds Out; STQC Norms Extend to Recorders

• CP Plus Pro Series targeting the premium enterprise segment rolls out in Q4 FY 2026-2027 — while NexiView (introduced April 2026, Q1 FY 2026-2027) has seen good initial pickup with first placements underway; management expects NexiView to become amongst the leading brands after CPPLUS in the forthcoming years (period unspecified).
• Aira entry-level brand not yet in the market — first products expected to flow into the market by end of November 2026 or December 2026 (Q3 FY 2026-2027), countering the lower end of the pyramid and the unorganized sector.
• Government of India has issued no new notification on DVR/NVR STQC norms as yet — analyst Anirudh Joshi (ICICI Securities) flagged that new STQC guidelines will extend to recorders and become mandatory from 1 April 2027 (FY 2027-2028); management said the government is working on a policy and until it is out, timing, impact and definitions remain "work in progress". Management stated that once the notification is out, it will further give impetus to domestic brands to grow market share on the back-end recorder side.
• SQTC certification barrier holds — MD Aditya Khemka stated that as of the call date no company from the land-border situation has been certified for any single model; "the government has laid down strict and stringent trusted-supply-chain guidelines" to prevent such certifications, and prior instances where labs took calls were deferred by the government.
• Channel depth cited at 30-35,000 installers and resellers — connected on the company's app, plus a few thousand installers and system integrators handling installations and projects; CPPLUS described as a de facto standard brand across most shops/installers nationally, with current overall market share of 40-50%.
• Festive brand push — national campaign launched with brand ambassador Ranveer Singh, alongside cricket and major-airport presence.