Ladies and gentlemen, good day and welcome to the Q4 and FY 2025 earnings conference call of Aditya Vision Limited, hosted by IIFL Capital Services Limited. 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 this conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded.
I now hand the conference over to Mr. Percy Panthaki from IIFL Capital Services Limited. Thank you and over to you, sir.
Hi, everyone. Good evening. We are pleased to host the management of Aditya Vision Limited for their Q4 conference call. I have with me on the line Mr. Yashovardhan Sinha, Chairman and Managing Director, and Ms. Yosham Vardhan, Whole-Time Director. I'll hand over the call to the management now and then we will have a Q&A session. Over to you, sir.
Thank you, Percy. Good evening, ladies and gentlemen. Thank you for joining us for our Q4 FY 2025 earnings conference call. Today we'll walk you through the key highlights of our financial performance, strategic initiatives, and business outlook. Our investor presentation has been shared on the stock exchange. We hope you had the opportunity to review it. It gives me great pleasure to share that Q4 has been an exceptional quarter for us. Best Q4 in AVL's entire history.
We recorded strong 30% growth in revenues, surpassing our guidances despite all macro challenges. While January saw a brief slowdown, February and March witnessed a sharp rebound with strong consumer demand driving remarkable growth. The early onset of summer further supported the momentum, helping us close the quarter on a high note. For the full year, we have achieved a resounding 30% revenue growth, continuing our consistent track record of maintaining a 30% CAGR revenue growth for the past 10 years.
This speaks volumes about the strength of our business model and execution. On the expansion front, we opened 30 stores in FY 2025, where most of our new stores came in Uttar Pradesh. With that, we have now reached a total of 175 stores, a significant milestone as we continue to scale with purpose. Out of our 175 stores, 112 stores are in Bihar across all 38 districts, 29 stores in Jharkhand covering 21 out of 24 districts, and 34 stores in U.P. covering 20 out of 75 districts.
We have recently expanded to central U.P., where we have opened about 10 stores, including 6 stores in Lucknow in the latter part of FY 2025. With this expansion, we are present in the three state capitals of three states where we are currently operating. We are proud to share that our strong and consistent performance has continued into FY 2025, delivering robust growth across all key financial indicators. Our revenue surged by 30%, reaching INR 2,260 crores in FY 2025, up from INR 1,753 crores in FY 2024.
In this fast growth period also, we maintained EBITDA margins at 9%. Profit after tax grew by 37% to INR 105 crores compared to INR 77 crores in the previous year, a clear reflection of our deep understanding of the market research and relentless focus on driving sustainable yet profitable growth. In Q4 FY 2025, we continued to deliver strong performance with revenues growing from INR 376 crores in Q4 FY 2024 to INR 487 crores, reflecting a solid year-on-year growth of 30%.
Our profit after tax also saw a healthy increase of 104% over the same period, rising to INR 16 crores from INR 8 crores. As you are aware, our business experiences a clear seasonality, with Q1 traditionally seasonal being the strongest quarter driven by heightened demand for air conditioners, refrigerators, air coolers, and related cooling products. To stay ahead of the seasonal demand curve, we follow a strategic approach of building inventory proactively, particularly starting in Q4.
This year, in addition to our usual planning, we took a more cautious approach and built up more inventory due to uncertainty surrounding compressor supply. As a result, we accelerated inventory accumulation to safeguard against any potential disruption and stock out situations and ensure readiness for a strong start in ensuing Q1. Moreover, the end of the financial year typically presents favorable buying opportunities from OEMs, which we leverage to secure products at attractive terms.
We are confident that these high-velocity items will be liquidated quickly as Q1 demand kicks in. Consequently, our inventory peaked at INR 698 crores as of March-end. However, when viewed across the year, the average inventory level for FY 2025 stood at less than INR 500 crores, that is INR 494 crores on quarterly basis, offering a more accurate and normalized reflection of our inventory position throughout FY 2025.
This strategic buildup of inventory ahead of the busy season resulted in negative cash flow, which historically gets into positive territory at the end of the summer season when the strategic high inventory gets liquidated. Moreover, as highlighted in my several earnings calls, in our electronics retail, upfront payment carries substantial discounts, which is important for achieving higher trading margins and avoid stockout situations. As such, payable days are kept less to boost profitability.
In Q4 FY 2025, Bihar remained our largest revenue contributor at 77%, followed by Jharkhand at 13% and Uttar Pradesh at 10%. For the full year FY 2025, Bihar accounted for 80% of our total revenue, with Jharkhand and Uttar Pradesh contributing 12% and 8% respectively. Our same-store sales growth stood at 19% for Q4 FY 2025 and 15% for the entire full year, reflecting continued strength in core markets and solid customer traction. Looking forward, we are committed to our growth strategy and are confident in our ability to sustain momentum.
We plan to add 25-30 stores annually, with a sharp focus on expanding our presence in Uttar Pradesh, where we see significant potential. At the same time, we will continue to deepen our reach across Bihar and Jharkhand, further strengthening our leadership in the region and fortifying it. With these efforts, we are well-positioned to achieve significant growth over the medium term, driven by our disciplined execution, strong regional insight, and customer-centric approach.
I will now hand over the floor to Mrs. Yosham Vardhan to provide an overview of the financial highlights for the quarter. Over to you, Yosham.
Thank you, sir. Good evening, ladies and gentlemen. We are pleased to present the robust financial performance for Q4 FY 2025 and FY 2025. Here is a summary of our key financial achievements. In FY 2025, revenue surged by 30%, reaching INR 2,260 crores. Gross margin stood at 15.7%. EBITDA reached INR 204 crores with EBITDA margin at 9%. PAT exhibited a growth of 37%, totaling to INR 105 crores. SSSG for FY 2025 stood impressive at 15%. In Q4 FY 2025, revenue marked a 30% YOY increase, reaching INR 487 crores.
Gross margin stood at 17%. EBITDA for the quarter stood at INR 42 crores with EBITDA margin at 8.7%. PAT for the quarter stood at INR 16 crores, up 104% YOY.
Our store count stands at 175 stores, with 112 stores in Bihar, 29 stores in Jharkhand, and 34 stores in Uttar Pradesh. SSSG for quarter four FY 2025 stood at 19%. We can now open the floor for questions.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Devanshu Bansal from Emkay Global. Please go ahead.
Yes, sir. Hi. Congratulations on the good numbers, and thanks for giving me a chance to sort of ask my questions. Sir, there are reports of unseasonal rains around the country, and we have a high base to beat as well this time around. How do you see growth trends for the current quarter so far, as this quarter has relatively high salience in our overall and the number size you also sort of covered in your initial remarks? Hi. Okay. Sir, am I audible?
Yes, sir, you are. Management, are you able to listen to the question? Hello? Ladies and gentlemen, the line for the chairperson seems to have disconnected. Please hold while we reconnect. Hello. Participants, we have the management online. Please go ahead, ma'am.
Yes, I.
Devanshu Bansal, please go ahead.
Hi, sir. Congratulations on good execution. Sir, I wanted to check that there are reports of unseasonal rains across various parts of the country, and last year Q1 base is also specifically on a higher side. I wanted to check what's your outlook for growth in the current quarter, as this quarter is critical because of higher salience in our overall annual numbers. I wanted to check your thoughts on that.
You're very right, Devanshu. There has been unseasonal rain so far, market has been slow. Despite that, we are in growth and major part of the quarter is still around there, and we hope that we are going to recover whatever the growth which company is looking forward to.
Fair enough, sir. I also wanted to better understand this increase in working capital. Last year on a first store level, year-end inventory was about INR 3 crore per store, and now this has reached up to INR 4 crore per store. Right. Last year also there must have been some pent-up stocking ahead of the season. Now this 35% increase in inventory per store. Are you also sort of expecting similar kind of growth on a same store level this time around because just to sort of maintain stock terms that were there last year?
There is one more thing was there in this Q4 actually, we were in fact manufacturer was sort of compressors and there were some restrictions for compressors from the government as well as there was definitely industry was facing a shortage ahead of it. We were slightly more proactive in acquiring inventories, which as you know, will be selling it out in Q1. This has been the reason for slightly increase in inventory. This increase in inventory is very temporary in nature as you know. It does reflect on our books on 31st March. Later on within a month or so it becomes very reasonable.
Okay. What I understand is, sir, your inventory position vis-à-vis competition is in a much better shape this time around, which should help you gain relatively better traction, right? In the ongoing summer season, is this the right understanding?
Absolutely, Devanshu. In fact see from behind also from past also that we have been doing well in Q1 just because we have been better placed in inventory level.
Understood. Sir, last question from my end. This is on gross margin. Last couple of quarters there has been a dip. In Q3 there was 100 basis points dip and this time around it is 50 basis points. I wanted to check because U.P. contributes only about 10% of your revenue, right? That particular state should not lead to this quantum of gross margin decline for you. Wanted to check if this is entirely related to that particular state or there are some other reasons also for the drop in gross margin.
I've always been talking that we do not talk about any region or any state as such. Actually, we believe in a basket way of gross margin. Gross margin in this financial year has gone down by 22 basis points. We think that for the quarter it has come down by slightly more. Please do understand that most of our, in fact, roundabout I'll tell you the exact. 14 out of 30 stores just has been opened in Q4. Entire 14, almost 50% of our new stores has started in Q4. Most of the operating expenses have come for these stores.
However, these stores have started in this quarter itself. It has come down. Still we will maintain that our EBITDA margin will be something between 8% and 10%.
Fair enough, sir. Thank you for taking my questions. This is really helpful.
Thank you.
Thank you all.
Thank you. We will take our next question from the line of Aniruddha Joshi from ICICI Securities. Please go ahead.
Yeah. Sir, thanks for the opportunity. Sir, in terms of staff cost, it has materially gone up in this quarter to 4.3%. In fact, it is highest in multiple quarters. Any particular reason, any additional investment that you would have done, let's say for U.P. or anything there? How should we read this number?
Staff cost, yeah
That is one. Secondly, the tax rate in every Q4 seems to be on the materially higher side. Even if I look at FY 2023, FY 2024, FY 2025 also. Any reason for such a sharp increase in tax rate, let's say in the fourth quarter itself, when logically the tax rate should remain around 25%, and it is around 25% in the nine months in earlier years also. Why the tax rate is so high in Q4 quarter?
Earlier years, we have already given our explanation, this year there is no material change in the tax rate. It is similar, above all, Q4 figures are always balancing figures. When you get your accounts audited, then these are balancing figures. This year there is no material changes, I suppose. Coming to your first question, staff costs going up. As I told you just now, that almost 50% of our store addition was in Q4. Obviously operating costs, employee costs, all the costs were coming in quarter four. That was the reason for rise in staff cost.
Okay. Sure, sir. Last question from my side in terms of the store addition guidance. We will stick to around 25 odd stores in 2025?
Our guidance will be definitely from 25 to 30 stores. We are looking into the very bright picture around. We may like to increase which later on in later quarters we'll update you.
Okay. We may increase the guidance upwards then?
Yes.
30, 35 types.
Yeah, it can go upward. We'll keep you updated after another quarter or so.
Okay. Sure, sir. Thank you. That's it from me.
Thank you.
Thank you. The next question is from the line of Swati Jhunjhunwala from JM Financial. Please go ahead.
Yes. Thanks for taking my question. My first question is more on the demand side.
Swati, hi Swati, can you speak louder, please?
Yes. Is it audible now?
Yeah.
The first question is on demand overall. Many consumer durables players are saying that April has not gone so well because of a delayed summer, rather should I say, and plus monsoons. How has April gone, and how do you see May and June performing?
I've already told that demand has been slow, despite that, Aditya Vision is in growth, our company. We are seeing that, yes, this thing happens once in a while, most of the years, in fact, past year. When summer starts slowly, it again builds up later in the quarter. We are quite bullish about this second half of May and full next month.
Okay. Second is on the guidance that you've given 2025 revenue take over. Just two things I want to understand in this. Number one, what states are you targeting apart from Uttar Pradesh? Number two, what categories are you more focusing on?
As far as the state is concerned, right now we are focusing in Uttar Pradesh only. We'll keep you updated, as I told you, in another quarter or so, maybe end of H1, I'll further update you on what other territories we are looking at. As far as categories are concerned, in fact, right now we are focusing on compressor products in this quarter.
All right. Okay, thanks. Thanks for the comments.
Thank you, Swati.
Yes.
Thank you. We'll take our next question from the line of Percy Panthaki from IIFL Securities. Please go ahead.
Yeah. Hi, sir.
Yes.
My question is on the inventory. You did mention that in anticipation of good summer and because of deals, we have done some advance purchase, and that is the reason why the inventory has gone up. If I recollect correctly, the same thing had happened in last year Q4 also. Having already done that last year with the base being reset upwards, if we do the same thing this year, that should not result in a disproportionate increase. The number of days of inventory has gone up for two years in a row. Just wanted to understand the reason for that.
In fact, both the years you will find that there was some confusion regarding supply side. This year, if you'll remember, there was even more supply side issues were coming, being reported by manufacturers. There were restrictions from government, tariff position was also being discussed. In fact, export were diverted to U.S.A. from China. Our manufacturers, they were anticipating that they will get less number of compressors. It was rather more uncertain. In fact, entire world is so uncertain as of recent due to U.S.A. tariff and all that.
This year in Q1, it was even more uncertainty we were facing. I don't think it is going to go up again disproportionately in the future. This year was definitely an exceptional one.
Got it. Sir, second question is on U.P. If you can give some idea, what is the average sales per store for the entire number of stores that you have in U.P.?
We may not give you the average store sale. We can only say that we have given you the hard figures that this is the contribution coming from Q4. This is the contribution coming from U.P. in entire Q4 sale.
Got it. Just from point of view of some investors, they might want to just evaluate whether you are getting similar kind of response to the U.P. expansion as you get normally in your hometown.
Bihar, if you are referring to Bihar, then Bihar we have already In fact, we are present at almost all locations. If we go out of Bihar, then U.P. is just like same, just like in Jharkhand. There's no difference. We have been telling this in every earning call.
The throughput in U.P. versus Jharkhand, is it similar? I mean, on a per store basis, the kind of throughput that you generate or per square feet, whatever way you measure, is it similar in U.P. and Jharkhand?
No, it's almost similar. It's not very significantly different.
Okay. Yeah, that's all from me. Thank you.
Thank you, Percy.
Thank you. We will take our next question from the line of Varun Singh from AlfAccurate Advisors . Please go ahead.
Yeah, thank you for the opportunity. My question is, typically between April, May and June, April would be how much percentage of the total revenue for the quarter? That is my first question.
It depends. It is not the same for year-over-year. Your question, in fact, sometimes April is slightly cooler, then less sale will come in April, more sale will come in May and June. Similarly, sometimes early onset of summer is there, April is very high compared to May. It will not give you an accurate picture, Varun.
Understood. Still, I mean, a ballpark, what is a typical range considering the fluctuations, which is fine?
Typical range is it's slightly, of course it peaks out in May and June, of course, April it gains momentum, I'll say.
Sorry. You said April momentum is high.
I said that in April it gains momentum. It takes momentum, summer sales, which in fact peaks out in May and throughout June. It's safely.
Yeah.
I think that 25% of entire quarter sale. You can think about that, but it's not strictly that. 25% will come from April.
Understood. Then secondly, in the first quarter, typically room AC is what percentage of overall revenue? That's my second question.
It's about around 45% or 50%.
Understood, sir. Given your all past experience of April being relatively moderate and then growth picking up in May and June, I mean, if you then help us understand that historically this kind of fluctuation in weather because of sporadic rain, etc. , I mean, how frequently you would have observed that despite April being moderate, May and June has picked up significantly? That's my last question, sir.
This is so difficult for me to answer your question, still, it happens and it happens a lot. In my earning call, I told you that January was very bad in Q4. Then February and March picked up. That brought us to 30% growth. It's just a matter of summer kicking in, full summer kicking in, and I think people have already they make their mind how much money they are going to spend on air conditioner or coolers or compressor cooler. That season only happens it. This is what is our observation.
Sure, sir. Understood. Answer one last question, if I may squeeze in.
Yes.
Are you getting?
You are asking a very important question. People make up their mood that I want to buy. When actually hard summer kicks in, the sale gets closed at that time. People make their budget that this summer we are going to get this room air-conditioned also. We are going to get this air conditioner changed. It's only when it is not very hot, people just postpone it for a few days, and the moment it comes, you just have to have, let us say, 15, 20 days, 25 days of good summer, and I think that's all. Everybody will like just come to your store to buy air conditioner or cooling product.
Right, sir. Sir, one last question, if I may. As you called out that despite April being soft, we have been in growth, which is quite positive. Still, when we say that we are in growth, compared to expectation, for example, if we would have expected maybe 20% growth, is it fair to say that against the expectation of 20%, in our case, growth would be maybe 10%-12%, which is still significantly better?
That will be not proper for me to say exactly what type of growth we have got in April, because we have not disclosed it.
Yeah.
Only thing I can tell you is that, yeah, growth is there, of course, in single digits. Growth is in single digits.
Understood, sir. Sure. Thank you very much, sir, and wish you all the best for future quarter.
Thank you, Varun.
Thank you. We will take our next question from the line of Vijay Chauhan from Right Horizons PMS. Please go ahead.
Yeah, thank you for the opportunity. I would like to understand what will be the sustainable SSG going ahead or let's say, if you are looking from next three to four-year perspective.
I think our SSG will be in double digits. This is all I can say, Vijay, very firmly, that SSG will be in double digits because what we have seen in past and in fact, what is happening right now is we are having high double-digit SSG. If you will ask me, then I'll tell you that it will definitely in double digits.
Okay. My second question would be on the total potential in terms of store count for U.P. Is there any guess or analysis you have done? Let's say recently we have entered in the U.P. side, is there any rough range or number of stores you think that this is the number, this is where the maturity we hit in U.P. or any analysis you would have done? Any broad light will be good on U.P. Market.
If Bihar can accommodate 112 stores, Vijay, we can fairly well assume that in next, let us say two to three years, we can have 200 stores in U.P. The size and that kind of population it is, we will definitely aim to have double our store count in U.P. compared to Bihar, because that's the potential for U.P.
Right. Any marketing plan, like when we enter to the new geography, is there any change or we are mainly focusing on regional marketing or we are also trying to become or project us as a national brand? If you can shed some light on the marketing side, that will be fine.
Vijay, we will not like to spend our money in vain, stakeholders' money that way. In fact, right now, there is no need for any national marketing strategy. We are in Bihar, Jharkhand, and U.P. As I have been telling all the time that culturally these are almost same in nature. Our marketing strategy also remains regional in nature. As you know, it is very expensive going national campaign for marketing, I don't think there is any need right now to spend that kind of money on marketing.
Okay. That answers my questions. Thank you.
Thank you, Vijay.
Thank you. The next question comes from the line of Devanshu Bansal from Emkay Global. Please go ahead.
Yes, sir. Hi. Thanks for the follow-up. Sir, typically, there is some increase in our expectations for CapEx, working capital, as well as payback period, right? Is it largely due to cost inflation or there are some new category additions that we're planning to introduce in stores?
There are so many factors, Devanshu. In fact, what you said that the biggest contributor is we are opening larger format stores. Now average store size has become 4,500, which was 4,000 previously. Obviously, more CapEx is required, more products on displays is required, working capital is also required in that. This is the reason for that rise. Of course, inflation is there, of course. These are all because of which we are. The major reason will be that our format of store has increased.
Yes, sir. This was my second follow-up part. In this year that we noticed that the average store size of new stores, that what we have opened is like 5,500. That has taken the overall company level to 4,500. Most of these stores have happened in U.P., right? What is the strategic thought process for opening larger stores in the new area which we are entering? Is it like we are offering much better assortment? What different are we trying to do strategically in this new state versus our earlier operations?
This is our, in fact, optimism rather, Devanshu, that these places are going to do very well because of the population. Again, when we are going to a new state, we are going to a new city, we want to give that experience to our customer which no other showroom is able to give. This is our primary strategy.
Understood. Sir, why I was sort of stressing upon this was because earlier we had indicated that at least we are sort of leaving some margins just to gain good traction with new consumers, right? Now on the capital investment perspective, we are investing higher. I wanted to check, will the unit metrics be broadly similar versus our earlier operations? That can happen naturally because as the stores mature, we may hit a relatively higher revenue per stores, etc . The purpose of asking that question was that because margins are lower and then invested capital is higher.
No, this is your assumption, Devanshu, that margins are lower. I told you that's very strategic. These are something which I cannot discuss on earning call. This is what I can say, that this is not the, in fact, norm that margins are less. It's not about that. It's about so many other things which customers they want to see on the floor of the showroom. Everything included, we believe that experience or what is our competition, we see the competition around. Of course, we believe that there is a lot of room is there to coexist with big competitions also.
You will have to have the same type of experience what others are seeing or may see in future. It is for future also. Above all included, these are very high density population areas where we must have bigger stores.
Fair enough, sir. Lastly, wanted to also check on increase in payables. Over time, we have always maintained that the model pursued is cash and carry model, but this time around there is some INR 90 crore increase in payables as well. Was it like a timing thing or how should we read that?
No, you can read it very straightforward, Devanshu. As I have told you before also, that even when you are on cash and carry basis, you get sufficient time from the manufacturer to get the products delivered to your store. That is the gap which reflects on the date of balance sheet. It's not about going up because we were high on inventory, higher was the sundry creditors. These are reflected only because since now GST is there, most of the products we are, in fact, buying from manufacturers on IGST basis.
These products are billed from the company and it takes some time to reach our stores, and our payable time kicks in from the time we receive our products.
Understood, sir. Thanks for taking the questions.
Thank you, Dev.
Thank you. Ladies and gentlemen, due to time constraints, we will take this as our last question. I would now like to hand the conference over to the management for closing comments.
We trust that we have addressed all your inquiries to your satisfaction. If you have any remaining unanswered questions, please don't hesitate to contact our investor relations agency, Go India Advisors. They will be more than happy to assist you further. Thank you so very much and goodbye.
Thank you. On behalf of IIFL Capital Services Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.
Thank you.
Thank you.