Shares of Aditya Infotech Ltd., the parent company of CP Plus, jumped nearly 5% to ₹3,464 on August 20. This came after Motilal Oswal Securities gave the stock a "buy" rating and set a target price of ₹4,200, indicating a 27% increase from the previous close. The firm also suggested the stock might hit ₹5,066, offering a 53% potential upside.
Motilal Oswal's report points to strong growth prospects in India's video surveillance market, where Aditya Infotech holds over 44% market share. They expect the market to grow from ₹106 billion in FY25 to ₹227 billion by FY30. Aditya Infotech's revenue is projected to grow at a 44% CAGR from FY26 to FY28, outpacing the industry's 16% to 18% growth expectation.
The company's EBITDA and profit after tax are expected to grow by 58% and 64%, respectively, during the same period. The introduction of Standardisation Testing and Quality Certification (STQC) norms could reduce competition, helping Aditya Infotech boost market share to over 58% by FY28. Backward integration into components like lenses, cables, and plastics is seen as a driver for cost efficiency and better margins.
On August 19, the board approved raising up to ₹1,500 crore through equity issuance. This could be undertaken through one or more permissible routes, including a public issue or a qualified institutional placement (QIP), subject to shareholder and other regulatory approvals. The company is planning a postal ballot for shareholder consent and formed a board committee to handle the fundraising.
Aditya Infotech will meet institutional investors in Mumbai from August 24 to 26 and in Singapore from September 1 to 3 as part of its outreach. The company reiterated its EBITDA margin guidance of 14-15% for FY27, down slightly from 14.5% in Q1FY27. Management plans to review this outlook after the first half of FY27, aiming for performance above the guidance.
Analysts are optimistic about Aditya Infotech's future. IIFL Institutional Equities holds a positive view, with Senior Vice President–Research Renu Baid Pugalia noting the company's strong position in India's IP camera market. She highlighted the company's localization of a large portion of the camera value chain, giving it an 18-24 month lead over domestic competitors. This positioning allows Aditya Infotech to expand into premium products for enterprise and government clients.
Pugalia projects a revenue CAGR of 40-45% for the company, with margins stabilizing around 14.5-15%, leading to earnings growth of 45-50% over the next two years. The exit of Chinese manufacturers due to new government certification requirements is also seen as beneficial for Aditya Infotech's growth.
All seven analysts covering the stock maintain a "consensus buy" rating. As of Thursday, shares of Aditya Infotech were trading 4% higher at ₹3,432.2, showing an impressive 125% increase year-to-date.
