Aditya Vision Ltd - Store expansion strategy driving growth | Company Update

Aditya Vision Ltd. reported a strong Q4FY26 performance, with revenue growth ahead of our estimates driven by healthy demand trends and continued store expansion across existing and newer geographies . EBITDA margins came in at 8.1% (vs. our estimate of 8%), reflecting stable operating performance despite aggressive expansion and higher investments toward scaling newer stores. While we broadly maintain our FY27E/FY28E earnings estimates, we expect margins to gradually improve as the recently added stores mature and achieve better operating leverage. Supported by its differentiated service proposition, strong regional brand recall and favourable summer-led demand trends, we believe the company remains well positioned to deliver healthy earnings growth. We assign a 40x multiple to our FY28E EPS estimate of Rs.15.7 to arrive at our target price of Rs.630.

Robust revenue growth:

The company reported strong revenue growth of 28.4% YoY to Rs.6,250mn in Q4FY26, driven by healthy growth across all key regions — Bihar (+28.4% YoY), Jharkhand (+18.5% YoY) and Uttar Pradesh (+79.8% YoY). During the quarter, the company also entered the Chhattisgarh market and added 3 new stores. Total store count stood at 207 stores at the end of FY26 versus 175 stores YoY, comprising Bihar (118 stores), Jharkhand (33 stores), Uttar Pradesh (53 stores) and Chhattisgarh (3 stores). Additionally, the early onset of the summer season supported strong RAC sales during the quarter.

Higher other expenses and change in product mix hampered margins:

The Gross margins during the quarter contracted by 95bps YoY to 16%, mainly on account of change in product mix. EBITDA for the quarter grew by 19.4% YoY to Rs 505mn. Other expenses during the quarter increased by 47.6% YoY owing store expansion costs resulted in OPM contraction of 61bps YoY to 8.1%. PAT for the quarter stood at Rs 217mn (+ 36% YoY).

Outlook:

The company’s performance remains largely in line with our expectations, supported by a well-executed expansion strategy and strong operational focus. The company added 32 new stores in FY26 and entered the Chhattisgarh market with 3 stores, further strengthening its regional presence. Over the next two years, management plans to continue its aggressive expansion by opening 30-35 stores annually, primarily in Uttar Pradesh and Chhattisgarh, where penetration levels remain low, while also entering Madhya Pradesh in FY27e. We expect AVL to continue benefiting from its proven business model centered around same-day delivery, installation services, and strong after-sales support, which remain key differentiators. Additionally, the early onset of summer is expected to drive strong RAC demand, a higher-margin category, thereby supporting profitability. Backed by healthy demand trends, store expansion, and improving scale, we believe the company is well positioned to deliver 20%+ growth over the next two years, and any meaningful correction in the stock could provide an attractive entry opportunity for long-term investors.

Valuation, view and Risk:

We have left our estimates largely unchanged and are factoring in Revenue/EBITDA/PAT CAGR of 21/20%/32% over FY26–FY28E.  We believe the stock should continue to see robust growth with store expansion in new regions and healthy SSSG growth. We value the stock at 40x FY28E EPS of Rs 15.7 post which we arrive at our TP of Rs 630. Key risks: Delay in store expansion, unseasoned weather conditions and lower consumer sentiments.

Company website: https://adityavision.in/

*CMP is as per report published date

Click to download the full Aditya Vision Ltd. Q4FY26 Company Update

Analyst: 

• Rahul Dani - Research Analyst, Institutional Equities (NISM-201500034725)
• Vaidik Bafna - Research Associate, Institutional Equities (NISM-202100035711)

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FAQs on Aditya Vision Ltd. Q4FY26 Report

1. What drove Aditya Vision’s Q4FY26 growth?

Growth was driven by strong consumer demand, rapid store expansion and robust RAC sales supported by the early summer season.

2. Why did margins remain stable despite expansion?

Margins were supported by operational efficiencies and improving scale, although expansion-related costs and product mix changes created some pressure.

3. What is the company’s expansion strategy?

Aditya Vision plans to add 30–35 stores annually across Uttar Pradesh, Chhattisgarh and new markets like Madhya Pradesh.

4. What differentiates Aditya Vision from competitors?

The company focuses on same-day delivery, installation services and strong after-sales support, strengthening customer loyalty and regional brand recall.

5. What are the key risks for Aditya Vision?

Key risks include slower consumer demand, delays in store expansion and seasonal fluctuations impacting cooling product sales.

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