Aditya Vision Limited (AVL) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to Aditya Division Limited Q4 and F526 earning conference call, hosted by Access Capital. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this call has been recorded. I now hand the conference over to Ms. Devanshi Kamdar from Excess Capital. Thank you, and over to you, ma'am.

Good evening, everyone, and thank you for joining us today for our Divisions Q4 and FR26 earnings call. We are glad to have the senior management team with us, including Mr. Yosho Varthan Sinha, Chairman and Management Director, and Ms. Yosho Varthan, Whole Time Director. I will now invite the management to share their opening remarks, after which we will move into the Q&A session. Over to you.

Thank you, Devansi. Good evening, ladies and gentlemen, and a warm welcome to all of you. Hope you have gone through our investor presentation, and if not, I strongly recommend you to go through it. As we speak today about our Q4 and full year FY26 performance, I would like to take a moment to step back and reflect on the journey that has brought us here. Aditya Vision started as a small, single store with a simple vision to make quality consumer durable, accessible, affordable, and trustworthy for customers in underserved markets. Today, as we close FY26 with 207 stores across four states, that journey has scaled meaningfully. Over the last 27 years, that vision of Aditya has guided every decision we have taken, whether it was entering into new towns, building relationships with customers, or staying disciplined in how we grow. I can say that our vision has not only scaled, it has become bolder and resilient. FY26, in many ways, not only tested that vision, but also turned to be a landmark year for our business model. What is encouraging for us is that despite this year having a weakest summer since our inception, we delivered approximately 18% revenue growth year-over-year and 11% at growth year-over-year. At the same time, we maintained gross margins at around 15.6% and EBITDA margins at 8.5%, reflecting our continued focus on profitable growth. I am delighted to share that in Q4, we delivered a strong revenue growth of 28%, accompanied by an impressive fat growth of 36% year-on-year. The last financial year liberated our company from the cycles of seasonal dependence model, heavily dependent on Q1, and more so freed us from a seasonal blockade of being dependent on H1 for growth. I am truly delighted to give the comfort to our investors, stakeholders, that your company is now an all-weather, all-season company. Despite Q1, QFY26 and H1FY26 delivering only marginal growth of 6% and 11% respectively, we still concluded the year with top-line growth of 18%, which is quite respectable. The year began with an unusually weak summer season that extended into late Q2, impacting demand of our core pooling category during the first half. Prolonged gains and delays in implementation of GST 2.0 further slowed the recovery trajectory in Q2. But what stands out is not the challenge, it is how the business responded. Historically, Q1 and Q2 together contributed nearly 55 to 60% of our annual sales. Despite losing these low-hanging sales, we did extremely well in Q3 FY26 with a top-line growth of 28%, driven by festive season demand. The momentum further accelerated in Q4 FY26, where the company recorded another robust top-line growth of 28%. As a result, we see that the second half is now becoming as important as the first half, and our business is gradually transitioning towards a more balanced, full financial year model. This performance was further supported by our strategy of stocking inventory at the right time, which enabled us to fully capture demand and deliver an exceptionally strong quarter. On the expansion trend, From this year, marks a defining phase in our journey. We have added 102 stores in the last three years, which is almost equal to 105 stores, where we built in the previous 23 to 24 years. We have entered Chattisgarh earlier than planned with three stores, marking our foray into fourth targeted stage. This is an important step in our expansion journey as we continue to replicate our model, culture, and customer trust across new geographies in a calibrated manner. As I speak, another neighboring state vote is held for our future expansion, which was earlier withheld due to political uncertainties. We are now present with 118 stores in Bihar across 38 districts. 33 in Jharkhand, covering 22 out of 24 districts, 53 in Uttar Pradesh, covering 30 out of 75 districts, and 3 stores in Chhattisgarh, covering 2 out of 33 districts. We plan to add more stores annually, with a strong focus on scaling our presence in Uttar Pradesh and Chhattisgarh, while continuing to deepen our leadership across Bihar and Jharkhand. We are also on track to enter Madhya Pradesh this financial year as we expand into new geographies in a calibrated manner. We will be happy to know that we have on boarded Pankaj Sripati as our brand ambassador, further strengthening our connect and brand recall across our core market. Our inventory levels at the end of Q4 remain higher at approximately 840 crores. But this is a conscious and strategic decision. We acted early in anticipation of supply-side uncertainties, highlighted by OEMs, particularly around gas shortages due to the sudden Gulf War. We also leveraged price changes driven by BE norms revisions, where product prices have increased by around 8-10% to secure inventory at relatively better costs and to remain competitive in the market. Importantly, with clear signals of a strong summer ahead, we ensure that we are fully stocked to meet demand without disruption and at the same time remain competitive. When I look at where we stand today, what gives me confidence is that we are no longer just expanding. We are evolving with resilience. And most importantly, our vision is no longer limited to where and how we started. It is now on a catch-up motor of the huge geographies, laden with above-hundred population with ever-rising disposable incomes. With this approach, backed by discipline, execution, strong regional understanding, and a customer-first mindset, we believe we are in well-positioned to deliver consistent and sustainable growth for medium to long term. With that, I would now like to hand over the floor to Mrs. Yosham Vardhan to take you through the financial highlights. Ms. Yosham.

Thank you, sir. Good evening, ladies and gentlemen. We are pleased to present the financial performance for Q4 FY26 and the full year FY26. For the full year FY26, revenue grew by 18%, reaching Rs. 2672 crores. Gross margins stood at 15.6%. EBITDA reached 228 crores, registering a growth of 12%, with EBITDA margins at 8.5%. Profit before tax stood at 157 crores, with TBT margins at 5.9%. Pat stood at 117 crores, growing by 11% worldwide. Same-store sales growth for FY26 stood at 8%. For Q4 FY26, revenue increased by 28% YOY, reaching 625 crores. Gross margin stood at 16%. EBITDA for the quarter was 51 crore, with EBITDA margin at 8.1%. Profit before tax stood at 31 crore with PBT margin at 4.9%. PAND grew by 36% YOY to 22 crore. Our store count stood at 207 stores as of March 31, 2026. Same store sales growth for this quarter stood at 18%. In Q4 FY26, Bihar remained our largest revenue contributor at 74%, followed by UP at 14% and Jharkhand at 12%. In FY26, Bihar contributed to remain our largest market, contributing 75% of revenues, followed by UP at 13% and Jharkhand at 12%. This reflects the strength of our core market, while our newer regions continue to scale up steadily. We can now open the floor for questions.

Thank you so much, ma'am. Ladies and gentlemen, we will now open. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets only while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.

Our first question comes from the line of

Aditya Bhartya from Investec. Please go ahead.

Hi, good evening, sir. My first question is on inventory for room ACs that we are carrying. Do you think that the inventory that we'll be carrying will be significantly higher than what general competitors would be carrying? And to that extent, it will be a big competitive advantage, at least in the next quarter. Should that also bode well for margins and boost our margins from what is usually the case in first quarter?

Thank you for asking me. First of all, we cannot comment on inventories of our other competitors. But as far as we are concerned, we are adequately stocked. And that is, as per our strategy, which I will not like to divulge, it's our strategy to build up inventory as far as the cooling products are concerned. And definitely one thing I can say that we are... We'll be carrying inventory as per our need and as per our historical figures.

Sure, sir. Given that this year is a very unusual one, wherein we are seeing multiple price hikes as we are kind of progressing through the season, do you think a scenario like this helps us a lot in terms of margins, or is it that it's almost the same scenario for all retailers, and to that extent, the entire benefit gets passed on to the end consumer? What are you really seeing in the marketplace?

I will tell you, actually, the whole business model is like that, even if they are hiking prices, OEMs, since we are carrying our inventory, this is the reason we carry a lot of inventory, because we know that price changes can come. And for smaller dealers, they may be having those inventories of earlier pricing. So we want to remain competitive all the time. And so our this buildup of inventory helps us in being competitive all the time. And it is very important and very necessary also for our business. So this competitiveness remains there. So it's not necessary that whenever there is a hike in price that comes as a profit to us, rather we watch the market, how it reacts, then only we take a call. So it's not dependent on our profitability, it's not very much dependent on the price of OEMs.

Understood, sir. That's very clear. So my second question is that given that almost 50% of our stores are Three years or less than three years old, and that proportion of new store addition will gradually be coming down. Do you think that that will be a bit of a margin level as those stores start generating high revenues, become profitable, or improve their profitability? Even the company level profitability can have some benefit out of it. And I'm specifically asking because we... In UP, we would have spent a fair bit of money. That will start getting absorbed over larger revenues. So how are you thinking about margins from a slightly longer term perspective?

You are absolutely right, Aditya. In fact, these stores which you referred to, in fact, whenever our bottom is now getting heavy in the sense that more and more matured stores will be there, and fewer stores, as you said, in percentage terms, fewer stores will be added as a percentage. So this is why, in fact, in my opening speech also I told you that in very near term we will be, in fact, definitely having better control over our operating expenses.

Sure, sir. And sir, anything that you can share in terms of how throughput per store of a mature store and margins of a mature store may differ from a store that, let's say, is two years old?

Yes, I suppose it matters, but it's not very, I'll say, similar to each other. All the stores are having different metrics, as you know, like all territories are slightly different. So, but I can tell you one thing that after three years, at least we take these stores as quite matured. However, as you know, one full last year was washed out. So, in fact, this whole arithmetic has gone little hayward. But we are very confident that once we are in this current financial year, once we are in a normal season, then we are going to all these financials are going to catch up to the previous expectations.

Understood. That's very helpful. Thank you so much.

Thank you. Thank you. Our next question comes from the line of Yash Sonatalia from Adelweiss Public Hall. Please go ahead.

Hi. Thank you, team, for taking my question, and congratulations on a good set of numbers. So, my first question is I want to double-click on gross marks. You know, 100 bits negative YOY. Is it more or less because of change in product mix? And if yes, can you help me understand what has changed over there? Why we have seen 50% growth in small appliances and why they fit on the large appliances?

I can tell you that, yes, it's very simple. In fact, gross margin has come down only because that we fail to capitalize on our seasonal product like air conditioners, air coolers, and refrigerators during H1. So, obviously, those, we always tell that these are the appliances that are having better margins, but there, because of the season, seasonality, because of bad season which we encountered last financial year, so margins will not, naturally will come, will be depressed. Secondly, when the share of these products came down, the share of mobility, et cetera, went up, and even what you said that the smaller appliances. Maybe, and as you know, mobility, ASP was also gradually rising throughout the year. So more and more volume was coming through these products, which were having lesser margins. But I still think that despite being a bad year as far as seasonal productivity was concerned, we have done fairly well in containing the margin to these levels.

Understood, but sir, my question was more related specifically to Q4, like Q1, Q2, we understand because of unseasonal rain.

Okay, I'll tell you. Actually, it has come down just because that in Q4, ASP of mobiles went up by just to 20%. And so the share of, volume of that mobility was far more, 20% more than what we were encountering in year before. So this was the reason that, and that carries low margin. So this was the reason for the Q4. Laptop, again, laptop also speed went up by 8 to 10%. So both these products, which constitutes more than 25% of our sales, they have impacted, because of price high, it has impacted our margin. Got it, got it. If you want more clarification, I can give you that in a basket where you have products of lower margin, and these have grown because of sudden support in their prices, then obviously entire margin of the basket will come down.

Got it, got it, sir. And can you please help me with, we saw 50% growth in other expenses, majority of this will be promotional because of the expansion in UP. So, can you help me what was the exceptional or one-off advertisement spend we have done in UP to normalize?

As I told you that we onboarded our brand ambassador also during this period. As well as we were, again and again, I'm telling you that we are entering new geographies and more matured and, in fact, evolved geographies of Uttar Pradesh, Western Uttar Pradesh. So, we are now trying to invest also, and we are doing quite well there, and only because of our efforts. And I don't think... And as you grow up and as you expand the geographies, your all costs, freight costs, every cost, all costs, they go up. And so this is, so is this elevated miscellaneous. Everything goes up. Your 18% volume has come, so your credit card commission is going to go up, your DBD is going to go up. So there are several expenses which are going to go up with your sales.

Got it. And like majority of our expansion is right now happening in UP and going ahead also assuming it is going to be very similar. So can you give some color how the unit economics of some mature stores which are now like 20-30 stores has been present in UP for last two years or more. What is the performance of those stores?

I got your point here. I have just told you one thing that one of one year has in fact not responded to our mother in normal way, as I told you last year. So even if they are two years older, we will consider it as one year older only because they haven't encountered, let us say, Q1 or Q2, a similar Q1 and Q2 which has always come to the company. So that way, I'll say that they have been doing well, and they will continue to do very well once we settle down.

Got it. Thanks. Thanks a lot, sir, for answering my question. Best of luck for this. Thank you. Thank you. Yes.

Thank you. Our next question comes from the line of Anirudha Joshi from ICSA Securities. Please go ahead.

Yeah, thanks for the opportunity and congrats for a great set of numbers. Sir, two questions. If you can indicate what will be the normalized margins for? Dihar as a state, because that's a completely mature state for us, and a UP or Chhattisgarh as an MP may dilute the margins, but what is the margin that a mature state like Dihar is generating, and by what time frame do we see UP also reaching to similar margins, maybe two years, three years down the line?

I can comment on your second part of the question, but not the first part, because we usually do not divulge because of, as you know, competition and all that. We do not divulge state-wise margins. I hope you are getting my point, Anirudh. Yeah, sure. So, but I can only say that, yes, we are looking forward to even UP or other states where we are expanding. We will definitely, it will take some time, but we are going to definitely, we are very conscious of our margins, as you must have seen right through so many years, and we will try always hard, but not at the cost of our sales. So our dominant position will be built. At the same time, we gradually, we increase our margins. So this is the way we have come up in Bihar also. And same will be the strategy going forward in UP or India. This will be our strategy. So rather than asking a margin for a particular state, I'll say that we have to make other states catch up with that to Bihar. And for that, all the time we are working.

Okay, sure, sir. Got it. The second question, if I take the interest cost and divide it by average debt, so we get a rate of interest at almost 12.8%, 13%. So that's a pretty high interest rate.

This includes the finance cost on lease liabilities also. So this is not your bank interest. Our bank interest, again, I cannot divulge you for certain banks. The banks do not like us to divulge the rate of ROIs. But it is what you are looking towards this finance cost includes interest on lease finance also. So that when you will get the full annual report, then you can find that separately.

Oh, sure, understood. So, in third and last question, any outlook on the real estate or rental inflation? Because post IT slowdown or some of the issues in IT sector due to AI, we are hearing about some slowdown in real estate markets in places like Pune, Bengaluru, Hyderabad, etc. But I don't know, is there having any derivative impact on the real estate market in Bihar, Jharkhand? No, not at all.

Actually, as you know, they are hardly having a few. So it has not impacted neither Bihar nor UP or Jharkhand. Till now, it has not impacted, it has not come down, but maybe let's see what is in store in future.

Okay, sure, sir. Absolutely, last question. Is there any plans to implement AI in the operations? Because we keep hearing about other retailers also investing in terms of AI for demand generation, reaching out to customers. Multiple other, in a way, initiatives. So, any plans on that? Yeah, thank you.

Anirudh, actually, we are always open to new ideas and always exploring these things, AI and other things. But it's not that we go with the crowd. We always explore and we will like to see the benefits with the cost we are going to incur. Everything will be taken into account, what benefit we are going to get. Then only we will take a decision, the management will take a decision.

Okay, sure, sir. Many thanks. Thank you.

Thank you. Our next question comes from the line of Bhagavad Ghandi from Bajaj Alternate Investment Management Limited. Please go ahead.

Yeah, hi. Thanks for the opportunity. Just wanted to understand if there is any unsold inventory left. Can we return that back to the OEMs? And how is the policy usually over there?

No, actually, I mean, we have been telling in so many conferences and calls. Actually, we do not have to return those inventories to manufacturers. Usually manufacturers, they don't prefer taking back their inventories. Rather, they will, they help us in liquidating that inventory. So if there is any unsold inventory left with us, it is there, onus is on them to get it liquidated as quickly as possible. Then only we go for new billing. So, it is always, waves are in pressure as far as one's whole inventory is concerned.

Okay, okay. Got it. And, sir, would you like to guide for the store expansion targets for FY27 and FY28?

We have been expanding by over 30 stores every year since last, I think, three, four, five years. And we don't give a guidance because we are always ahead of the guidance. We remain always ahead of the guidance. But you can safely assume what we, when somebody actually asks, will ask us how many stores you want to open, then we only say the figure of 25 stores. However, we have been delivering much, much more than what we have been guiding. And maybe, and we are, as we told, we just don't, do not believe in... Expanding anywhere or anyhow, it's not our, in fact, our model. We want to expand in a very calibrated, in a cluster approach manner, where we go and we try to capture the entire state. So this will be our point. Got it, sir.

Yeah, so just one last thing on the EBITDA margin, if you're expanding in newer geographies, the OPEX will tend to be much higher. So will it weigh on the overall EBITDA margins as we expand into newer geographies, Chhattisgarh, Jharkhand, and all those regions?

But then again, try to understand what I said that now that more of most of our stores will be over three years old. So, in fact, will be bottom heavy as far as matured stores are concerned. So newer stores will be very few as far as in percentage terms of the overall entire store count. So, it is quite, we can safely assume that going forward, our OPEX will not increase, it will be consummate with our overall expenses.

Got it. Out of the 30-35 stores that we target, how much will be in the new state, if you can just provide some numbers on that front?

We usually, we want to go to a new state and try to, on a creeping cluster basis, we want to capture the entire state. But we do not, we just simply, we do not stop our expansion there. Wherever we get the opportunity, wherever we see new opportunity, we will go there. So it's not like that, that we'll only, only the... Expanding this year in Jharkhand or Madhya Pradesh, UP is a big state where we have to do a lot of things. As I told you in the earning cost, that our neighboring state has also now political uncertainties are over. So it's a good place for us to go and start expanding.

Got it. Thank you so much. That's it from my end. Thank you so much.

Thank you.

Thank you. Our next question comes from the line of Manoj Ghori from Equus Securities. Please go ahead.

Yeah. Thanks for the opportunity, sir. First of all, congratulations for strong recovery after the week's start of FY26. I have two questions. So, one, if I have understood correctly, contribution has been around 15% versus 14% last year. If I am right, we have opened more.

I am sorry to interrupt you, sir, but your voice is breaking.

Manoj, you please repeat your question and be very clear. Go ahead, Manoj.

Yeah. Sir, my point was, if we look at the current year, we have opened more stores into Uttar Pradesh as compared to other geographies. And... The revenue contribution has come down from 14% to 13% during FY26. Anything to read here because ideally more store openings should result into more contribution from UP markets.

You have got two questions. So this is your first question, right? And second?

The second question is we have obviously the operating cash flows have been positive. How should we see in the coming years whether we'll continue to stay OCF positive and probably day by day our balance sheet will stand on. So any highlight, any input over there will be appreciated.

I will tell you the first question first. Why it has come down is a different thing. If you will go through our store opening schedule, then you will find that most of the stores have opened in last month or February or March of the last financial year in UP. Most of the stores. So, you are taking for the full year, but full year, they have not worked. Most of the stores have worked very less than full year. Sure. But still contribution from UP is 14%, and not 13%, as you were saying.

It is my best, but

still I would like to tell you that most of the stores are very new, and in fact they have not run even three months of the full financial year. So as you might have taken into account that what contributions they have made, you cannot strictly go by the numbers unless and until one full year goes by.

Sure.

And second, as far as balance sheet and cash flow is concerned, yes, this time our cash flow is quite healthy, but we'll continue to invest the cash flow, and as I've been telling that we don't require at the moment, we do not require any equity, our internal accruals. Hello. Can you hear me?

Yes.

So we will continue to strengthen our balance, no doubt about it, and most of the money will be invested in opening new stores and acquiring inventories at the right time, and our internal accruals together with our short-term borrowing, which is working capital borrowings, That will be enough for us to continue for, at least we do not foresee raising any capital in this financial year, definitely not in near term.

So, lastly, just to continue on this, with better efficiencies and better scales from the new stores, your OCF to EBITDA should ideally keep improving from year-on on YOY basis, right? Is that understanding correct?

No, I can't understand your question.

So, what I meant was operating cash flow as a percentage of EBITDA. From here on should keep improving with higher scale from the newly opened stores. So should that be assumed that it will keep improving from here on?

No, that you should not take it as a benchmark, because operating cash flow will definitely depend on how we get our inventories built, how we take advantage of OEMs, and how do we manage our working capital. That will be very key to cash flows. So, we won't like to comment on that. It will depend on betterment for the company. It will always depend on the betterment of the company, financial.

Sure, sir. Got it, sir. So, lastly, if you can throw some light, how things are progressing in April. Sorry if I am making you repeat this. How things are shaping up in April, and probably how things are progressing in May, if you can highlight over that.

April has been very robust for us, and May is slightly colder in the initial period, but we are expecting very soon that it is going to become a normal summer season.

Sure, sir. Thank you and wish you all the best, sir, for future quarters and years to come. Thank you, Manoj.

Thank you. Our next question comes from the line of Vaidhik Bafna from Monash Network, Capital Limited. Please go ahead.

Good evening, sir, and congratulations on a good set of numbers. Sir, can you just quantify as to, suppose, for example, around more than 50% of our stores would be matured now, and the balance would not be so matured. So, how much margins do the mature store enjoy and how much do the unnatural stores enjoy versus how many stores are there which are still yet to come profitable?

We have been given guidance that most of our stores, they get recovered between 9 to 12 months from their opening. And it's very, again, it will not be proper for me to give you the guidance or rather margins for matured stores and things which are matured. Because it is an evolving process. Vedic. You try to understand it. It's not as one of that one thing has stabilized. Even those branches which are matured, still a lot of things have to come, still are still to come. Similarly, for stores which are not that mature, even there, in so many geographies, some stores are still doing very well. Some stores are growing in a normal way. So these are all, when you are talking about more than 200 stores, then it is all, you cannot give a bifurcation of, let us say, margins, what matured store is earning and what non-matured store is earning. It all depends on how crowded that market is, how you are placed in that town. These are all important things in this type of, this format of business.

Okay, sir. And, sir, one last thing is that...

Can you speak louder, please? Yes, yes.

And, sir, one last thing is that when can we expect our margins to reach back to 9% or levels? Is there any guidance on that?

I cannot give you a guidance on that, but our endeavor, we always give a guidance of between 8% to 10%. So 9% will be the mean factor of our margin. And we strive to be at that type of margin, but again, as I told you, we cannot compromise in certain sales, and we have to have those sales as well. So it is all control growth, but still we can give you a fairly good guidance of 8 to 10% of margin.

Okay, sir. Got it. Thank you, sir.

Thank you.

Ladies and gentlemen, due to the time constant, that was the last question for today. I know in the conference, I want the management for the closing remarks. Thank you and over to you, team.

Thank you, Danish. Thank you, Devansi and all people who are on the call. Thank you very much. See you soon again and take care of you all. Thank you very much. Bye-bye.

Thank you so much, sir. Ladies and gentlemen, on behalf of Access Capital, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.