Management

• Hari Shanker Khemka (Chairman and Whole-time Director)
• Aditya Khemka (Managing Director)
• Ananmay Khemka (Whole-time Director)
• Atul Behari Lall (Non-Executive Director)
• Himanshu Baid (Independent Director)
• Manish Sharma (Independent Director)
• Ambika Sharma (Independent Director)
• Chetan Kajaria (Independent Director)
• Yogesh Chand Sharma (Chief Financial Officer)

Use of Proceeds

The total issue size is Rs. 1,300 cr which comprises of fresh issue of Rs. 500 cr and offer for sale component (OFS) of Rs 800 cr. The company intends to utilize a portion of the Net Proceeds towards Prepayment and/or repayment of all or a portion of certain outstanding borrowings availed by the Company (Rs 375 cr), and rest for general corporate purpose.

Competitive Strengths

Market Leadership and Growth The company stands as India's largest video security and surveillance provider, holding a 20.8% market share in Fiscal 2025, backed by strong brand recall. Its comprehensive security solutions empower customers nationwide to fulfill diverse surveillance needs, optimizing operational costs and facilitating efficient problem-solving. The Indian market is rapidly evolving with advanced technologies, fostering smarter solutions. Valued at ₹106.2 billion in Fiscal 2025, it is projected to reach ₹227.4 billion by Fiscal 2030, growing at a 16.46% CAGR. Unit sales are also expected to surge, driven by heightened security emphasis and government smart city initiatives.

Strong Brand Presence and Recognition The flagship 'CP Plus' brand of the company has received consistent investment, establishing it as the pioneer in consumer branding within India's security industry. It prioritizes building awareness, maintaining product quality, and engaging consumers pre and post-sales, achieved through CP PLUS World Centres and 69 dedicated CP PLUS Galaxy stores. Innovative marketing campaigns, celebrity promotions, and its tagline "Uparwala Sab Dekh Raha Hai" have significantly enhanced brand recall and profitability. This commitment has been recognized with multiple accolades, including 'Most Admired Brand 2024' and 'India's Leading Security and Surveillance Solutions Provider 2023', affirming its market leadership.

Extensive Pan-India Network and Customer Support The pan-India sales and distribution network is central to the operational scale of this entity, providing the widest reach in the video surveillance market. Its network spans over 550 cities, supported by 41 branch offices, 13 RMA centres, and over 1000 distributors and 2,100 system integrators. With India’s largest security solutions workforce of 1,274 employees and a 404-member sales team, the company emphasizes continuous up-skilling. A dedicated contact center offers comprehensive customer support, from pre-purchase inquiries to installation, on-site repairs, and technical assistance. Pickup and drop services are also provided, ensuring customer satisfaction across a diversified customer base.

Comprehensive Product Portfolio and AI Solutions The 'CP PLUS' and 'Dahua' brands offer a comprehensive portfolio of electronic security and surveillance products and services. This range includes various CCTV cameras, digital and network video recorders, mobile and body-worn surveillance, thermal cameras, and integrated software solutions like access control, biometrics, and video doorbells. The company provides 2,986 SKUs across varied price points. Leveraging Artificial Intelligence (AI), its products feature advanced capabilities such as AI motion detection, facial recognition, and an 'Edge AI box' for sophisticated analytics like ANPR and parking violation detection. Tailored, end-to-end security solutions are designed for diverse sectors, including real estate and banking.

Advanced Manufacturing, R&D, and Strategic Management The 'Make in India' commitment of the company is showcased by its Kadapa facility, India's largest and the world's third-largest CCTV manufacturing unit, with significant annual capacity. An in-house R&D team drives innovation, developing cloud services and AI/ML solutions. Rigorous quality control is maintained, with relevant industry certifications and comprehensive inspection procedures, ensuring high standards. Strategic partnerships, including with L&T Semiconductor and VVDN, bolster its technology and sourcing capabilities. An experienced management team, led by Aditya and Hari Shanker Khemka, combined with a skilled employee base, ensures robust growth and strong corporate governance.

Key Risks & Concerns

• Revenue Concentration Risk: The financial performance of the company heavily relies on the sales of specific surveillance equipment, including CCTV cameras, NVRs, DVRs, and PTZ cameras, which collectively accounted for a significant majority of its revenue (77.47%) in Fiscal 2025. Any shifts in market demand or consumer preferences for these core products could negatively impact the business, its operational results, cash flow, and overall financial stability.
• Supply Chain Dependence: The company is dependent on a limited number of suppliers for crucial parts, materials, and finished products. Should there be any disruption or interruption in the availability of these essential components, the entity's business operations, financial results, cash flow, and financial condition could be adversely affected.
• Import and Price Volatility Risks: A portion of the company's parts and materials are sourced internationally, primarily from China. Consequently, any imposition of import restrictions or significant fluctuations in global commodity prices that impact these imported components could have a detrimental effect on the business, its operational outcomes, cash flow, and financial health.

Outlook and Valuation

The global video surveillance market presents a significant growth opportunity, driven by increasing safety needs and technological advancements. Valued at U.S.$35.9 billion in Fiscal 2025, the market is projected to grow at a Compound Annual Growth Rate (CAGR) of 10.36% until Fiscal 2030, reaching 1,600.1 million units in volume from 1,112.9 million. This expansion is fueled by the escalating need for security in various settings and the growing adoption of AI-driven solutions like video analytics and face recognition. Video surveillance is increasingly seen as a vital infrastructure element, offering a cost-effective and comprehensive alternative to traditional manned guarding with 24x7 monitoring capabilities.

India, as a prominent economy, is witnessing a surge in video surveillance system adoption due to heightened security concerns and crime prevention. The Indian market value is estimated at ₹106.2 billion in Fiscal 2025, with a projected CAGR of 16.46% to reach ₹227.4 billion by Fiscal 2030. Unit sales are also expected to grow from 39.7 million to 74.6 million during this period. Government initiatives, particularly in Smart Cities, and growing urbanization are key drivers. Significant opportunities exist in the replacement market, as many early installed CCTV cameras, introduced around 2005, are now due for upgrades, given an average lifespan of 5 to 10 years.

The company is strategically positioned to capitalize on these market trends. It intends to leverage India’s comprehensive regulatory framework for cybersecurity, which mandates STQC certifications for internet-connected CCTV devices by April 9, 2025. With some of its product lines already STQC certified, the company is poised to expand its market share, supported by integrated manufacturing and robust R&D. Furthermore, the company plans to continuously innovate and expand its product portfolio, including AI-powered solutions, interactive whiteboards, and dashboard cameras. Digital solutions like EzyLiv/EzyKam+ and CP Plus IntelliServe will be further developed, enhancing customer experience and operational efficiency, aiming for a unified AI-powered platform. The company is valued at a P/E multiple of 20x for FY25, based on the upper price band. The FY25 financials and ratios, however, are not comparable with previous years due to the consolidation of AIL Dixon JV. So, at the upper issue price of Rs 675, the stock trades at an adjusted FY25 P/E of 77.0x. Heavy dependence on imported raw materials and exposure to Chinese component supply are key concerns in the case of Aditya Infotech Ltd. Aggressive investors can SUBSCRIBE to the issue given Aditya Infotech’s dominant market position and scalable business model.