Ladies and gentlemen, good day and welcome to the Q3 FY 2025 Earnings Conference Call of Aditya Vision Limited, hosted by IIFL Securities 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 the 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 Securities Limited. Thank you, and over to you, sir.
Hi. Good afternoon, everyone. It is our pleasure to host the management of Aditya Vision Limited. With me, I have Mr. Yashovardhan Sinha, Chairman and Managing Director, and Ms. Yosham Vardhan, Whole Time Director. To take you through the results, I will hand over now to the management. Over to you, sir.
Thank you, Percy. Good afternoon, ladies and gentlemen, and welcome to our Earnings Conference Call for Q3 and Nine Months FY 2025. Today, we will be discussing our company's financial performance and strategic decisions. Our investor presentation is available on the screen, and we trust you have had an opportunity to review it. We are happy to report a strong performance the first nine months of FY 2025, with consistent results across all key financial metrics. For the first nine months of FY 2025, our revenue grew from INR 1,367 crores in nine months FY 2024 to INR 1,773 crores, an increase of 30%, and our PAT grew from INR 69.22 crores in nine months FY 2024 to INR 89.51 crores, an increase of 29%. In nine months FY 2025, we have already surpassed the entire revenue and PAT of FY 2024.
While EBITDA and PAT margins have remained stable due to our deliberate focus on scaling the business, we continue to remain committed to driving operational efficiencies and sustaining long-term growth. We have reported a good performance this past quarter as well, despite overall subdued consumption and sluggish demand. Our revenues grew from INR 413 crores in Q3 FY 2024 to INR 508 crores in Q3 FY 2025, reflecting a growth of 23%. Our EBITDA margin stood at 9.16% for the quarter. Profit after tax grew by 9.25% year-on-year to INR 24.22 crores. We successfully opened five stores in Q3 FY 2025, taking our store count to 161 by end of Q3 FY 2025. We are on track to scale up our business and open stores strategically.
As on date, we have 167 operational stores. We are now present with 29 stores in 18 districts of UP out of total 75 districts. This financial year, we have started expanding our operations in UP beyond Purvanchal, Eastern UP, and now have around eight stores operational in Central UP, including four stores operational in the state capital, Lucknow. In Purvanchal, Eastern UP, we have established a strong presence in key cities such as Varanasi, Prayagraj, and Gorakhpur. In this financial FY 2025, we have already opened 22 stores and surpassing our guidance. We are on track to open 8- 10 additional stores by the end of financial year 2025. We have made significant progress in Jharkhand and Uttar Pradesh, which is reflected in the increasing revenue contribution coming from these regions in Q3 FY 2025.
In Q3 FY 2025, Bihar was the largest contributor to our revenue with 79%, followed by Jharkhand at 13% and Uttar Pradesh at 9%. In nine months FY 2024, Bihar's contribution stands at 81%, followed by Jharkhand and UP at 11% and 8% respectively. Our focus remains on expanding our retail footprint by strengthening existing locations and entering new markets in Hindi heartland, which represents substantial growth potential. We are confident to surpass the target of 200 stores by FY 2026. The same-store sales growth for nine months FY 2025 stands at impressive 15%. Finally, I would like to emphasize that we continue to invest in future growth as long-term tailwinds are very strong in consumer durable industry, as well as geography where we have chosen to operate. We remain confident in our future and our ability to set new industry standards and records.
I will now hand over the floor to Mr. Yosham Vardhan to provide an overview of the financial highlights for this quarter. Over to you, Yosham.
Thank you, sir. Good afternoon, ladies and gentlemen. We are pleased to present the robust financial performance of Q3 FY 2025 and nine months FY 2025. Here is a summary of our financial achievements. In nine months FY 2025, revenue surged by 30%, from INR 1,367.62 crores in nine months FY 2024 to INR 1,773.08 crore in nine months FY 2025. Gross margins were maintained at 15.37%, with EBITDA reaching INR 161.75 crores.
EBITDA margin stood strong at 9.12% during the period. PAT grew by 29%, rising from INR 69.22 crore in nine months FY 2024 to INR 89.51 crore in nine months FY 2025. SSSG for nine months FY 2025 stood impressive at 15%. In Q3 FY 2025, revenue saw a YoY increase of 23%, reaching INR 508.45 crores compared to INR 413.26 crore in Q3 FY 2024, driven by operational expansion and strong same-store sales growth. Gross margin stood at 15.58%. EBITDA for the quarter was INR 46.5 crores with EBITDA margin at 9.16%. PBT for the quarter stood at INR 31.20 crores and PAT grew by 9.25% year-on-year to INR 24.22 crores. Our store count stood at 161 as on 31st December, and 167 stores as on date. 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 the touchtone 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 Financial Services. Please go ahead.
Yes, sir. Hi. Thanks for taking my questions. Sir, our Q3 performance is strong, given that the industry growth in terms of volumes for larger appliances has moderated sharply to single digits now, right after a strong H1. In your assessment, sir, what are the key reasons for this moderation, and what are the key triggers also that you're watching, which should catalyze the demand again in the industry?
In my opinion, in fact, there has been sluggish demand. This is only because of the macroeconomics in nature, in the sense with high inflation and high interest, this is the main factor. I think in coming months, I think it is going to ease off.
Understood. Some other peers are also indicating tighter liquidity as a reason. Is that still not a challenge for us or how should we see that?
No, liquidity is not a challenge for us. Absolutely not.
Understood. Second, sir, I wanted to understand what is the revenue cadence of Korean majors for us vis-a-vis non-Korean brands in our business. If you could just help me understand that.
They are maintaining their level of share of the store. In fact, it is stable.
Okay. Pan-India, I guess there is some moderation in their market share, is that not visible in our area of operations?
No. It's not that visible. I'll say that it is steady.
Understood. If you could also highlight other leading brands apart from Korean majors across AC, refrigeration, washing machine categories for us. Just one or two top brands for us across the other segments.
Of course, Whirlpool is there. Godrej is there.
Whirlpool, Godrej will be in the red side, right?
Haier is also there very much. IFB is also catching up.
Understood. Okay. Sir, last question from my end. I wanted to understand the reason for dropping gross margin this quarter. Is it higher discounting in the wake of weak demand environment, or it is something related to the revenue mix for the quarter?
I will put it that it was sluggish demand which brought it down a little bit. The reason was also because every entire festive season was in single month of October. After that, market became very sluggish. Even festive season was quite good, but then after that, after October, market was very sluggish. Of course, when all of a sudden you are up with stocks and market becomes flat, then gross margin will come down by a few bits.
Understood. Just a continuation to this. Typically Q4 is an inventory build-up quarter for us, right, sir? What kind of growth are we projecting for the upcoming season? Q1 typically is 35% of our mix, and we typically prepare towards Q4, build up inventory in Q4. What are your initial thoughts around expected demand in the upcoming season?
We are very bullish on this aspect, Devanshu. In fact, we've already started building up our inventory, because as you know, approaching the summers. Of course, it becomes very difficult for you to build on the inventories for air conditioner, refrigerators, and other cooling products. We have already started building on inventories, and it will be our constant exercise up to going through March.
Understand. That interest expense that--
Hello?
Sorry to interrupt. The line for the speaker has been disconnected. We'll move to the next--
Hello, can you hear me?
Sir, we can hear you. We are moving to the next question, which is from the line of Chirag from HDFC Mutual Fund. Please go ahead.
Sir, just a few questions. One is this quarter, what was SSG?
SSG in this quarter was 13%.
All right. Sir, second question was, you mentioned that while demand has been sluggish, you are hoping for a recovery and you are also entering the next season with some optimism. If you could highlight the reasons behind that, what gives you this optimism considering that post-festive demand has been sluggish?
In fact, our presence in entire this heat-prone area is now quite a lot in the sense that we have got 25 stores in 17 districts in U.P., which always typically has a very hot summer. The second biggest thing is that even we cannot discount the factor of Kumbh Mela, which will bring lot of INR crores and INR crores of money to U.P. U.P. increases now, even Varanasi is also flooded with tourists. Ayodhya is flooded with tourists. Kumbh, everybody knows. The entire money, we are expecting that this summer it will be a very good Q1 for our company.
Sure. Have you seen any recovery in the first part of this quarter? Which means in January, have you seen any kind of improvement, or does it continue to be-
Generally, it has been flattest. It has been flattest. Of course, we are in growth, but I'll put it as flattest only.
Great. Thank you so much.
We are expecting growth in February to March.
Great. Thank you very much, sir.
Thank you.
Thank you. The next question is from the line of Manoj Gori from Equirus Capital. Please go ahead.
Yeah. Thank you. My question here is on the gross margin. If you look at gross margins contracted by 96 basis points. Was it that we offered higher promotional schemes and offers to the consumer and probably was this one-off or should we expect that to continue in the coming quarters as well, given that there has been sluggish demand environment? Any read on this and probably any outlook on the gross margins for the coming quarters?
As I told you earlier, that gross margin has come down due to sluggish demand and other macroeconomic challenges faced by us. As I told you that after festive season, market became very sluggish. These are the reason for contraction of gross margin. We expect that we are going to again maintain this gross margin in coming quarters.
Okay. From fourth quarter onwards, one should largely expect stable gross margins on YoY basis. Is that understanding correct?
I may say so. At the moment, we are just in the very first month of the quarter, any projection will not be right. We do expect.
Yeah. Sir, lastly, if we look at recently, there has been lot of noise on the supply challenges for the room AC brands. Whatever you are planning to stock for the upcoming summer season, are there any uncertainties or probably whatever stock you desire or you would have budgeted for, is there easy availability on the stocking side?
I'll say that it is on first come, first basis only. All manufacturers, they are aware what was our contribution to their sales. Actually, what I've already told that we have already started building up our inventory as earlier as December only.
Right.
What happens is that when you start building your inventory early, you get the desired type of models and in fact, your desired inventories.
Correct, sir. Yeah. Thanks, and wish you all the best.
Thank you.
Thank you. The next question is from the line of Aniruddha Joshi from ICICI Securities. Please go ahead.
Yeah. Sir, the question on the store count, because we already have reached to 167. Where do you see the count reaching at the end of FY 2025 and at the end of FY 2026 also?
We will be, in fact, stating my statement that we will be definitely crossing 200 stores by next financial year. This financial year, we are hoping to add another eight stores.
Okay. All the stores will be in UP, that's right?
Not all. There are a few in Bihar also. In such districts where we are getting very good response, we are trying to open another store there. Previously, we were a single store company, showroom in that district. Few will be there, mostly it's, of course, UP is the story.
Okay. Sure, sir. Understood. Fine. Overall, if you can indicate the SSSG in volumes also. Is there a change in revenue mix as well? Because the gross margin has contracted, is there any change in revenue mix towards the low end of the product portfolio?
Yes, there has been. Whenever there is a sluggish demand on IT and mobility, their share of counter will get bigger.
Okay. Sure, sir. That's helpful. Thank you.
Thank you.
Thank you. The next question is from the line of Arpit Shah from Stallion Asset. Please go ahead.
Hi, Yashovardhan. Based on certain numbers from the company, just wanted to understand, are we looking at store count to 180 stores by end of FY 2025 or FY 2025? Just to get the number.
175 will be a definite possibility. We are trying. In fact, so many stores are work in progress. 175 we are definitely going to achieve and we are trying to, in fact, open more stores, even more than 175 stores.
You believe that Kumbh Mela which will be a very big income generation for the state of U.P., you'll be able to turn around the seasonality for your business whereas Q4-
Sorry to interrupt you, sir. We cannot hear you clearly.
Yes, I'm also not able to hear him clearly.
Hello?
Hello.
Is it audible now?
Yes.
Yes, very much.
Given the Kumbh Mela which is going on in UP and we have a decently large presence in UP, you think you'll be able to turn around the seasonality in the business whereas Q4 this year could be possibly higher than Q3 given the Kumbh Mela and what kind of income it is going to bring to the population?
It can. In fact, we are very much hopeful and bullish about it. Kumbh Mela, speaking in Hindi not only in terms of, as everybody is aware, the entire world is aware that the response and mostly people are now going to even visiting Ayodhya and Varanasi and all that. Entire, in fact, right now it is disturbed also since Kumbh has started. Our, in fact, showrooms are also disturbed but we expect very good turnaround in the second half of next month.
Got it. If you can just put some insights on our operating expenses which have gone higher this quarter.
Yes, because we have opened around 30 stores between last quarter and this quarter. That has gone up. I think since we have opened many stores which are yet to mature, I think it is temporary in nature, this OpEx sitting up.
Got it. Thank you so much for your help.
Thank you. The next question is from the line of Onkar Ghugardare from Shree Investments. Please go ahead.
My question was regarding, firstly, you mentioned that many of the stores have not reached maturity stage. In % terms, can you quantify at what stages they are?
Actually, you will see our growth stats in the past record of growth, you'll find that we have added around 40 and 30, around 70 stores in one year or one half year time. These are typically, as we have already told in several earning calls, that typically all our stores, they mature by end of three years of opening. Not that they don't start contributing. They start contributing, as you are opening new stores again and again, operating cost, it is going to go up, which in my opinion, is of temporary nature because in coming quarters, this quarter also, current quarter also, in next quarter Q1 of FY 2026 also, it's going to do much better.
Okay. The second thing is you had raised around INR 282 crore. Out of that, how much you have utilized and because of that, the interest component should have gone down, right? We can see year-on-year increase in terms of interest component as well. What's the reason for that and how is the utilization for INR 282 crore?
We have already utilized the INR 282 crore and we have already filed all the details. You can find it from there. Regarding interest cost, we are a growing company. We are not idle company sitting there with the cash. We are utilizing the cash. We are making new investment CapEx investments. Inventory is also needed. In fact, we are going into summer season which is supposed to be very good one. We are fully invested in our stocks also, inventories also. In this cost, of course, it is strategic in nature also when you have to build up your stock according to the quarter-to-quarter.
Okay. For example, what is the sustainable kind of EBITDA margin we can model when we model your company, sir?
We have already uploaded it on our investors presentation. Our sustainable margin will be around 8%-10%.
8%-10% of EBITDA margin, right?
Yes.
Okay. As far as you mentioned that you have used the entire proceeds from the fundraise, that is mostly utilized for inventory or store expansion or combination of both?
Combination of both. We cannot invest it only on working capital. Otherwise, we have to make CapEx also. It is a mix of both things.
Okay. Just one last thing. You have recorded around 23% revenue growth, 30% YoY in Q3 and Q nine months respectively. When can we see operating leverage coming in?
There is operating leverage in nine months, if you will see there. Overall, nine months of FY 2025, our operating leverage has been quite good because our profits are as much as our sale has grown.
Yes, correct. This quarter, this has declined because of those sluggish demand you are seeing, right?
Yes. In fact, entire government structures were also reeling under this. It has been a sluggish quarter.
If you are basically saying 8%-10% EBITDA margins are sustainable, you are targeting around 20%-25% revenue growth. Can we expect around similar 20%-25% growth on the profitability?
Yes, you can assume that.
Okay.
We give our guidance that you can find our guidance in our investor presentation, and we are very clear about it. We have been always surpassing our guidance.
Yeah, this 20%-25% kind of growth, it's from your investor presentation only. I'm talking about that only.
Also, repeatedly we have, in fact, exceeded the guidance.
Okay. All right. Thank you.
Thank you. The next question is from the line of Vivek Gautam from GS Investment. Please go ahead.
Yes, sir. Thanks for the update and the opportunity. Hello, am I audible?
Yes, we hear you.
Hello. Yeah. I just wanted to know, sir, about top-line growth is quite good, but why the PAT growth is on the slower side, sir?
Operating costs are there because of many new stores.
Now only operating leverage should come in because our number of stores is also quite high. Seven, eight stores, nine stores, the operating leverage should come out.
It will happen. We plan to come, it is going to happen, but right now, of course, we are opening stores. They will start contributing to our top-line. That will ease off our operating cost.
Okay, sir. How is the future looking like, sir? Slow down is there but in our Bihar state and Jharkhand state, UP state, the potential is also quite large, sir. We are much better than the other markets, sir?
Yes. We are much better placed in view of manufacturers also. In fact, this geography is doing very well. Yes, we do expect that even in bad, very worst days also, we have been doing well at a 23% growth of top-line. We can expect that if there is some turnaround and this area is going to do very well. As I told you, a big factor is UP only where such a big event is happening.
OEMs are quite happy with our performance versus other geographies then, sir?
Yes.
Okay, sir. Thank you, sir. Thank you.
Thank you.
Thank you. The next question is from the line of Aniruddha Joshi from ICICI Securities. Please go ahead.
Yeah, sir. Sorry, just one follow-up question only.
Yes, please go ahead, Aniruddha.
Yeah. Sir, now obviously we have done good amount of work already in U.P. Is the margin in U.P., Bihar and Jharkhand, all three are different? Essentially the question is now we are expanding aggressively in U.P. and there is a slight margin impact. Is it the margins in U.P. are relatively low than the margins that we are generating in Bihar and Jharkhand?
It's a basket. You have to understand, it's not about state. It's about a basket. Even in UP, there can be several stores where there can be a very big competition and somewhere there is no competition. Margin is a mix of locations. It's not about only UP or Bihar or Jharkhand. There's a management strategy, is that how you manage your margins.
Okay. Sure, sir.
I hope it is clear to you, Aniruddh.
Sure, sir. It is clear. Thanks.
Thank you. The next question is from the line of Varun Singh from AlfAccurate Advisors. Please go ahead.
Am I audible?
Yes, you are.
Yes. Please go ahead.
Yeah, sure. Thank you for the opportunity, sir. My question is regarding Maha Kumbh Mela, which has started from 13th January. We are already maybe more than two weeks down into this event. As you pointed out that maybe this month has been relatively subdued and the second half is expected to be much better, driven by whatever impact on the disposable income of the local population out there. Considering that our exposure to that city itself or maybe UP at large, won't be, I don't know that number, maybe 15%, 20%. Given that this event is going to last till 26th of February. On account of general disruption, et cetera, don't you think that maybe the fourth quarter numbers are likely to be more impacted than getting benefited? Just led by the analogy of disposable income improvement. How would you think about this, sir?
I'll put it like this, that actually, in fact, when such big events happen, it not only invigorates that area only. In fact, it drifts to other areas. Catering to, let us say 8 crore, 4 crore, 2 crore people. It's not only people of Prayagraj can only handle that type of business. People from other districts, they also come in to handle the business there. It is about the whole area, in fact, it benefits the whole area. What we are seeing is that already we are doing well in UP and what we see that, let us say, before Maha Kumbh will end, I think money will be there with everyone, and that money has to come to such aspirational things, what we are selling.
Does that answer your question, Mr. Varun?
Sorry. Basically, sir, you are saying that I get your point that so many people will be positively impacted from the income side of it. Given that so much of crowd is also there, I think our store level operations would also be getting disrupted. I was thinking from that point of view over and above the positive side as you highlighted.
I'll tell you, we are having 35 stores in UP. Out of that, three stores are in Prayagraj. Yes, they are impacted because of the huge rush and all that, but other stores start performing well because of that.
Understood, sir. Secondly, just wanted to understand, given that 70 stores, as you pointed, is one and a half year old, compared to the total store that we have as on today is roughly 40% of the stores are very young. Like the same store, same growth number, which is currently a reflection of these maybe non-new stores. You think that when the total number of new store addition or the new age stores, that ratio comes down from 40% to, let's say, 20%, the pressure on SSG will start mounting? How would you think about this?
I've been repeatedly saying that this geographic population is very large, penetration is very low.
Yeah
even our very old stores are also having a double-digit SSG growth. This is a whole factor you have to take into account.
Understood, sir. Sir, in our definition of same store sales growth, we will consider more than one-year-old store in both numerator, denominator?
Yes, right, I think so. It must be given in investor presentation also.
Okay. Understood, sir. Sir, in our store, please pardon my ignorance, I'm tracking this company, relatively new. Would you also be selling private labels, meaning your own brand of AC and fridges, or it's all branded stuff?
No, as per our policy, we won't be selling any private label.
It's all branded. When you called out about Whirlpool being the top brand, what would be the revenue contribution of this brand? Maybe in any one particular segment, if you can give us some sense out of.
For Whirlpool only you're asking?
Yeah, Whirlpool and Godrej, as you said that these are the top two brands in the AC category.
I didn't say that was the two brands. I said that after Koreans, they were the other big brands. We do not in fact divulge how much they contribute because of manufacturers' reluctance.
Okay. Sir, maybe any sense if you can give us, it will be helpful with regards to the number one player, Voltas or the maybe number two player, Blue Star, et cetera. There are any contribution or you don't think it will be appropriate to share?
That will not be appropriate to share with you, but definitely they are doing very well.
Okay, sir. Sure. Thank you very much and wish you all the best.
Thank you.
Thank you. The next question is from the line of Devanshu Bansal from Emkay Global Financial Services. Please go ahead.
Hi. Thanks for the follow-up opportunity. Just one bookkeeping question. I wanted to know about the contribution of category-wise, as in home appliances, digital, and others. What is the revenue mix in nine months for these categories?
I think it must be given on the investor presentation.
It's not there, sir. It's not there, so that's the reason I'm asking.
We disclose it only half-yearly, so that will be there in the next quarter.
Okay. Okay. Sure, yeah.
Yes.
Thank you.
Okay.
The next question is from the line of Jigar Shah, an individual investor. Please go ahead. Jigar Shah, please go ahead with your question. Your line is unmuted.
Hi. Good afternoon. Thanks for the opportunity. Just one question, sir. On the product side, how do we look at seasonality in terms of different product categories per se, if you can help us understand a bit?
I could not understand your question. Can you please repeat it and speak clearly?
Sure. My question is, sir, for the different product categories, what sort of seasonality do we see? For example, AC would be higher in the summers. For the others, sir, if you can just help us understand a bit on that aspect.
Usually it is mixed. Apart from summer cooling product, it's always mixed categories. In the sense that, yes, washing machines will do very well during monsoons or during winters. In winters, heating products will have a better sale, like geyser and all that. Mostly it is mixed only.
Okay. Is the understanding correct, sir, that the air conditioners would have a higher share of revenue?
Definitely, yes. Their contribution higher.
Okay, sir. Thank you. That's all from my side.
Yeah.
Thank you. Ladies and gentlemen, due to time constraints, that was the last question for today. I would now like to hand the conference over to the management for closing comments.
We trust that we have addressed all your queries to your satisfaction. If you have any remaining questions, please do not hesitate to reach out to our investor relation agency, Go India Advisors. They will be more than happy to assist you further. Thank you for your time, and we look forward to continuing our growth journey together. Thanks.
Thank you.
Thank you. On behalf of IIFL Securities Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.