Aditya Infotech Ltd — Q3 FY26

Aditya Infotech Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=Oqit0MkMtXg Published: 3 months ago

0:02 2 seconds Ladies and gentlemen, good day and welcome to the Aditya Infoch Limited Q3 FI26 earnings conference call hosted by Access Capital. 0:12 12 seconds As a reminder, all participant lines will remain in the listenon mode and there will be an opportunity for you to ask questions after the presentation concludes. 0:21 21 seconds Should you need assistance during the conference call, please signal the operator by pressing star then zero on your touchstone telephone. Please note that this conference is being recorded. 0:32 32 seconds I will now hand the conference over to Mr. Nicl Kangoi from Access Capital for opening remarks. Thank you and over to you Nickel. 0:41 41 seconds Thanks Rahan. On behalf of Access Capital, I welcome you all to Q3 FI26 earnings conference call of Adita Info Techch Limited. We have with us today senior management represented by Mr. 0:52 52 seconds Adita, managing director, Mr. Anuk Na, president strategy and business development and Mr. Yogesh Sharma, PAO. 1:01 1 minute, 1 second Now I'll hand over the floor to Mr. 1:02 1 minute, 2 seconds Adita Kinta for his initial comments and then we'll open the floor for Q&A. Thank you and over to you sir. 1:10 1 minute, 10 seconds Hi, thank you Nikil and good afternoon everyone. Thank you for joining us today. 1:16 1 minute, 16 seconds Uh in the third quarter of 2026, Aditya Infoch Limited continued its profitable 1:23 1 minute, 23 seconds growth, operational discipline and robust execution. 1:28 1 minute, 28 seconds Favorable industry tailwinds. Largest portfolio of CP plus trusted core cyber 1:34 1 minute, 34 seconds secured products. Large scale domestic manufacturing. 1:39 1 minute, 39 seconds Deep R&D skill sets. Comprehensive distribution network and sustained investments in technology and strategic 1:47 1 minute, 47 seconds partnerships help sustain our continued market share growth trajectory. 1:53 1 minute, 53 seconds Before I take you through the financials, let me briefly outline the broader industry environment in which we operate. 2:02 2 minutes, 2 seconds The CCTV market demonstrates a robust long-term growth trajectory. 2:08 2 minutes, 8 seconds Rapid urbanization with more emphasis on safety. Improving spending power and sustained government investments under 2:16 2 minutes, 16 seconds smart and safe city initiatives are propelling strong and sustainable demand. 2:22 2 minutes, 22 seconds Market projections suggest a consistent high double-digit growth over the medium to long term. 2:30 2 minutes, 30 seconds We are also witnessing a decisive shift from HD analog products to network IP based solutions along with AI enabled surveillance systems. 2:42 2 minutes, 42 seconds Advanced video analytics, edge computing, and integrated command control platforms are becoming central 2:49 2 minutes, 49 seconds to both government and private enterprise deployments, expanding the role of surveillance far beyond just security. 2:59 2 minutes, 59 seconds From a policy standpoint, the union budget 2627 has significantly bolstered India's technology and manufacturing ecosystem. 3:10 3 minutes, 10 seconds The launch of the India semiconductor mission 2.0 seeks to expedite domestic capabilities throughout the 3:18 3 minutes, 18 seconds semiconductor value chain in the country. 3:21 3 minutes, 21 seconds These advancements strengthen the technology foundation that supports advanced CCTV and connected systems. 3:28 3 minutes, 28 seconds They also enhance India's competitiveness in high growth sectors such as artificial intelligence, 3:35 3 minutes, 35 seconds internet of things, data centers and sensor based technologies. 3:40 3 minutes, 40 seconds which are increasingly integral to future video surveillance solutions. 3:47 3 minutes, 47 seconds The market landscape has also undergone a significant transformation with notable shift towards cyber security 3:55 3 minutes, 55 seconds certified domestic Indian brands and some MNC global brands. 4:00 4 minutes CP+ stands out as the single largest player in this evolving landscape with its constant effort in R&D manufacturing and localization. 4:11 4 minutes, 11 seconds This shift has permeated all stages of the value chain encompassing distributors, system integrators and 4:20 4 minutes, 20 seconds even the end users which includes mid-market, small and medium enterprises, large corporations and government 4:27 4 minutes, 27 seconds sectors. This has accelerated market share gains for CP plus and our market share rose to almost more than 39% during the second quarter of FI26. 4:40 4 minutes, 40 seconds The market share gain is expected to continue for Q3 as well. 4:46 4 minutes, 46 seconds In Q3, the CPU brand continued its strong growth, contributing 87% of our overall AIL company revenue. 4:56 4 minutes, 56 seconds IP products made up to 75% of CP plus portfolio underscoring the sustained shift towards high value IP solutions. 5:06 5 minutes, 6 seconds Let me walk you now through the financial results. 5:11 5 minutes, 11 seconds On the quarterly performance, revenue grew 37.3% yearonear to 1139.1 crores 5:19 5 minutes, 19 seconds driven by strong demand from our expanding portfolio of CP plus CTC technology products across all segments from retail to projects and government. 5:30 5 minutes, 30 seconds Eida increased 98.7% yearonear to 144.6 crores with margin improving by 391 basis points to 12.6%. 6%. 5:42 5 minutes, 42 seconds Primarily due to favorable product and brand mix, higher localization and strong operating leverage. 5:50 5 minutes, 50 seconds Adjusted PAT stood at 96 crores, up 138.8% yearonear after accounting for 5:58 5 minutes, 58 seconds 7.7 cr of one-time provisioning related to the new labor codes. 6:05 6 minutes, 5 seconds On a ninth 9-month cumulative performance, revenue grew 31.1% to 2798.9.8 6:13 6 minutes, 13 seconds crores and Eida increased 100.5% yearonear to 320.6 cr with margin expanding by 395 basis points to 11.4%. 6:25 6 minutes, 25 seconds Our adjusted PAT rose to 198.8 cr reflecting 138.8% year-on-year growth over the 9 months period. 6:36 6 minutes, 36 seconds On the manufacturing expansion, we are actively expanding our manufacturing infrastructure and capabilities. Our 6:43 6 minutes, 43 seconds installed capacity for Q3 was 1.9 million units per month, which represent already a 20% increase from our previous 6:51 6 minutes, 51 seconds peak. We are on track to achieve a capacity of 2.1 million units by quarter 4 of FY26. 7:02 7 minutes, 2 seconds During the quarter, we also commenced construction of our enclosures and housing plant in Karapa, Andhra Pradesh, expected to be operational by mid 2026. 7:12 7 minutes, 12 seconds This initiative will deepen backward integration, improve cost competitiveness and enhance supply chain 7:19 7 minutes, 19 seconds resilience. The project is fully funded through internal approvals. 7:25 7 minutes, 25 seconds We have also successfully commissioned the CCTV camera lens assembly line and commercial production will begin from quarter 1 of FY27. 7:36 7 minutes, 36 seconds Once operational, this line will deliver a production capacity of up to three lakh lenses per month to be further 7:43 7 minutes, 43 seconds scaled up to 10 lakh per month by the end of next year, enabling us to meet future volume demands more efficiently. 7:53 7 minutes, 53 seconds I'll talk on the R&D and global technology expansion. Now our investments in R&D continue to grow. We 8:00 8 minutes have add we are adding highly experienced engineers on regular basis and strengthening collaborations with 8:08 8 minutes, 8 seconds semiconductors and critical component manufacturers to deliver worldclass advanced cyber secured CCTV solutions to our customers. 8:18 8 minutes, 18 seconds We have also incorporated Aditya Infoch Taiwan Company Limited, a wholly owned subsidiary dedicated to global R&D for security and surveillance technologies. 8:29 8 minutes, 29 seconds Taiwan is a global hub for semiconductor manufacturing and hardware innovation with worldclass foundaries, IC design 8:37 8 minutes, 37 seconds houses and a mature electronic supply chain. This enables us to access highc caliber engineering talent for the 8:44 8 minutes, 44 seconds following work much ahead of time including SOC architecture embedded systems and firmware hardware software integration AI a IoT and edge computing. 8:56 8 minutes, 56 seconds This this aligns tightly with our long-term innovation and technology roadmap. 9:03 9 minutes, 3 seconds This quarter we announced two significant collaborations. 9:07 9 minutes, 7 seconds We entered in a strategic partnership with Qualcomm Technologies to build AI enabled insightdriven video security 9:15 9 minutes, 15 seconds solutions for industrial enterprise and public safety applications. 9:22 9 minutes, 22 seconds These next generation offerings powered by Qualcomm's edge AI hardware and CP plus extensive market reach and product 9:30 9 minutes, 30 seconds ecosystem are expected to be commercially available in the H1 of uh coming year. 9:37 9 minutes, 37 seconds Uh this marks a pivotable pivotal shift from hardwareled surveillance to AI analytics driven solutions enhancing both revenue mix and margins. 9:49 9 minutes, 49 seconds The vision is that while we have successfully made cameras available to the nook and corner of India and there is something for all kinds of customers. 9:59 9 minutes, 59 seconds Next for us is to make it more intelligent to derive even business outcomes and also to provide 10:05 10 minutes, 5 seconds actionoriented security to make AI as part of life for all our customers in the coming years. 10:16 10 minutes, 16 seconds We are we are also advanced our backward integration agenda by signing an MOU with Orient cables for the manufacturing 10:24 10 minutes, 24 seconds of coaxial and network cables primarily for CP plus captive consumption. This collaboration will strengthen supply 10:32 10 minutes, 32 seconds assurance, enhance cost efficiencies and support for our long-term growth ambitions. 10:39 10 minutes, 39 seconds This JB will also be making camera cables for complete backward integration and localization 10:49 10 minutes, 49 seconds a bit on the brand strategy and consumer engagement. Now as part of our multibrand strategy, we have launched 10:56 10 minutes, 56 seconds two new brands IRA and Nexiv at IFSC in December 2025. 11:02 11 minutes, 2 seconds Primarily targeted at mass market and unorganized segments. 11:07 11 minutes, 7 seconds Next EVU brand is set to hit the market in Q4 FI26 and IRA brand is planned to launch in 11:16 11 minutes, 16 seconds the first quarter of next financial year. 11:19 11 minutes, 19 seconds Our consumer engagement also gained significant momentum with our new brand campaign featuring TN superstar Vijay 11:27 11 minutes, 27 seconds Setupati deepening our connect with the audiences in Tamil Nadu. We also enhance visibility through our largest ever 11:34 11 minutes, 34 seconds presence at IFSC India exhibition title sponsorship of PAC 2026 a high impact visibility across Indian 11:43 11 minutes, 43 seconds cricket series and outdoor campaign across major airports in India. 11:50 11 minutes, 50 seconds We have also announced a price hike of 6 to8% in the month of January 2026 which is already passed to the market and a 11:59 11 minutes, 59 seconds further price hike is expected in the coming quarters in FYI 2627 in line with the input cost rise from 12:07 12 minutes, 7 seconds the memory uh gaps which is emerging in the market. 12:13 12 minutes, 13 seconds We'll talk a little bit on the supply chain visibility. Now the global supply challenges persist across SOC memory including DDR and flash and sensors. 12:26 12 minutes, 26 seconds We have implemented several mitigation plans and are relatively better positioned and adequate adequately covered for the next coming quarters. 12:36 12 minutes, 36 seconds Our multi-sc product development strategy involves product ranges across various SOC manufacturers including 12:45 12 minutes, 45 seconds realtech, Inofusion, Novatek, Umbrella and Qualcomm. Thereby diversifying our chipset sourcing base 12:54 12 minutes, 54 seconds for procurement. We are mapping the entire supply chain and directly engaging with all the chip manufacturers 13:03 13 minutes, 3 seconds and their authorized distributors and also intermediaries so as to ensure we have maximum availability at all times 13:11 13 minutes, 11 seconds for for the chipsets especially in these crazy times. 13:16 13 minutes, 16 seconds We are placing forward orders up to even three quarters in advance and in some cases even doing prepayments to lock the 13:23 13 minutes, 23 seconds chipsets thereby securing supplies and maintaining market share growth trajectory. 13:31 13 minutes, 31 seconds Given strong execution, a favorable external environment and a robust product and manufacturing and 13:40 13 minutes, 40 seconds localization pipeline, we up our guidance for FI 2026. 13:45 13 minutes, 45 seconds The on the revenue growth side here on the range will be 3900 to 4100 with 13:53 13 minutes, 53 seconds moving with the expectation closer to the higher slab. The AIDA margins we increased to 11 to 12% and PAD from 6 to 14:03 14 minutes, 3 seconds 7 now to 7 to 7.5% in this year to establish the tone for the upcoming 14:10 14 minutes, 10 seconds financial year. We anticipate sustained robust growth and bullish sentiment. 14:15 14 minutes, 15 seconds Consequently, our initial guidance for FI27 would be revenue between 5350 to 5550 14:24 14 minutes, 24 seconds crores which is almost 30 to 35% growth over this coming year. The AIA margins a 14:31 14 minutes, 31 seconds further raise to 12 to 13% and the PAT from 7 12 to 8%. 14:39 14 minutes, 39 seconds Thank you everyone. We are now open to take questions from you. 14:45 14 minutes, 45 seconds Thank you ladies and gentlemen. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the 14:54 14 minutes, 54 seconds touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants 15:02 15 minutes, 2 seconds are requested to use their handsets while asking a question. 15:06 15 minutes, 6 seconds Ladies and gentlemen, we will wait for a moment while the question Q assembles. 15:13 15 minutes, 13 seconds We take the first question from line of Reub from IIFL Capital. Please go ahead. 15:20 15 minutes, 20 seconds Yeah. Hi. Uh good morning team and congratulations for the strong performance. Um so first question while you've elaborated quite a bit on the 15:27 15 minutes, 27 seconds supply chain um concerns and inflationary impact and price hikes. Um could you share a bit more detail in terms of what um to what extent you have 15:36 15 minutes, 36 seconds seen the shortages impacting you and you think while you're placing forward orders um near-term execution may be 15:43 15 minutes, 43 seconds slightly softer um when we look at fourth quarter and um in terms of inflationary impact what would be the exact cost increase that we have seen 15:52 15 minutes, 52 seconds and in addition to the 6 to8% price hike for Jan um would it possibly for you to quantify what is the quantum of price hike planned for fourth quarter and um 16:00 16 minutes subsequently first quarter 27 that's the first question okay thank you Renu so so reu h you see 16:09 16 minutes, 9 seconds generally what I have seen in the past uh couple of decades also in a situation like this when there is a you know 16:16 16 minutes, 16 seconds component shortage or something it's actually for the big players an opportunity to scale bigger uh the 16:23 16 minutes, 23 seconds challenge comes to the long tail of the small players where which are you know unable to secure supplies because the 16:30 16 minutes, 30 seconds supply is that much only. So what we have done is we have we've locking uh first we've done multi SOC supply chain. 16:38 16 minutes, 38 seconds So all our products we have a option A, B or C available that something or the other will be available to you know for the same set of customers to be 16:47 16 minutes, 47 seconds provided. Second we have ensured enough supplies and lockins with all the chipset owners across the board. So all 16:54 16 minutes, 54 seconds these four five main chipset owners and the flash guys that we keep securing and the the only major change which will be 17:03 17 minutes, 3 seconds there is the flash where the prices are beyond control. So that is the the thing but the supply we are ensuring. So our 17:12 17 minutes, 12 seconds focus will be to provide the supply even though the cost may be a little higher on the uh DDR and the flash side but 17:20 17 minutes, 20 seconds supply side we are ensuring that we don't fall short and our production keeps scaling up and our market share keeps scaling up. So this is an we are 17:28 17 minutes, 28 seconds taking it as an opportunity to scale up further. Now our guidance for next year and your second part of the question that how much impact will be there on 17:36 17 minutes, 36 seconds the price it'll be a double digit. Now what level of double digit hike further uh we are quantifying and seeing uh what 17:44 17 minutes, 44 seconds we are trying to do is that it doesn't impact our margins uh because we are the largest supplier almost 40% 17:51 17 minutes, 51 seconds of the market and we are aiming to scale it up further in the coming future and uh the other side of the supply there is 17:58 17 minutes, 58 seconds a a shortage which is there for the balance 60%. uh so I we don't see a challenge with respect to the revenue uh 18:07 18 minutes, 7 seconds uh you know achieving as long as we are able to maintain supply so whatever is the input cost rise due to this we are passing on without affecting our margins 18:16 18 minutes, 16 seconds and uh I think that's that's how it is but it'll be a double digit because the at the moment the next 6 months the 6 to 18:23 18 minutes, 23 seconds 8 months rather the the memory and DDR is going over the roof so it could be 10 15 20 25 it we quantifying what best we 18:33 18 minutes, 33 seconds can do uh to balance out the you know supply. So it depends every month price may every month two months price may have to alter. 18:41 18 minutes, 41 seconds Correct. Get it. Uh secondly in line with some of the strategic initiatives uh that you have planned along with um orientations as well as with Qualcomm uh 18:51 18 minutes, 51 seconds how do we see um the capex numbers for uh FI26 closure and for fiscal 277 along with the backward integration plan. 19:02 19 minutes, 2 seconds So I think this year capeex we primarily funded from our own with respect to capacity expansion and a little bit was done on the corporate office which we 19:10 19 minutes, 10 seconds intend to finish in the Q1 of next year and move in there which is the R&D center where we have a huge R&D setup labs and everything uh and next year I 19:19 19 minutes, 19 seconds think uh the Orient cable capex uh will soon be out but it's not much we'll most likely be funding through internal groups. It's a 50/50 JV. So both 19:27 19 minutes, 27 seconds partners will be providing for the capex and it's not it's not too significant of material right but and for the qualcom sorry and for the 19:35 19 minutes, 35 seconds you know let me answer the qualcom part also the qualcom part is more of a collaboration so there's no investment so they are using our market reach and 19:43 19 minutes, 43 seconds knowledge of CCTV and they are bringing in the cloud and IoT knowledge so there is no capex in that it's more of an in cost and revenue share 19:51 19 minutes, 51 seconds cost and revenue share so once the product is ready there's a revenue share model so there's no capex in the qualcom Got it. So broadly on an analyze basis 19:59 19 minutes, 59 seconds they should be within the 150 crores of guided capex range. 20:03 20 minutes, 3 seconds Absolutely. Yeah. The same that we guided for it could be within that unless there is an inorganic thing where we will see separately but more or less for our current plans there should be okay with it. 20:13 20 minutes, 13 seconds Got it. And lastly um in terms of slightly longdated uh capacity expansion um where are we for fiscal 27 and capacity uh targets? 20:25 20 minutes, 25 seconds So we are going to raise it to 2.4 million as we mentioned Reu. So 2.4 2.5 million with the current Kaddapa plant 20:33 20 minutes, 33 seconds that should suffice or FI27 or even a part of FI28 and 30 million uh and 30 million enclosures also which will be 20:41 20 minutes, 41 seconds the housing and enclosure plant and my million of lenses per month apart from the rest being imported. But uh post 20:50 20 minutes, 50 seconds that maybe in the next year we'll we'll we'll explore a second manufacturing facility. So we are working on that yet to decide at the moment. 20:59 20 minutes, 59 seconds Got it. Got it. Uh thanks uh and best wishes team. Thank you. Thank you. Thank you very much. 21:06 21 minutes, 6 seconds Thank you ladies and gentlemen. If you wish to ask a question please press star and one. 21:13 21 minutes, 13 seconds We take the next question from the line of Anir Jooshi from ICA securities. Please go ahead. 21:20 21 minutes, 20 seconds Yeah. Uh thanks for the opportunity and uh congrats entire team at Adita Infoch uh for posting such great set of numbers. Uh two questions from my side. 21:32 21 minutes, 32 seconds Uh in terms of Nexi View and IRA uh brands if you can share more details means uh now almost three odd months are 21:40 21 minutes, 40 seconds over. So are they well distributed uh across the regions and uh how do you see the distribution upside point one 21:49 21 minutes, 49 seconds secondly uh is there any revenue target for these brands let's say one year down the line or 3 year down the line uh 21:57 21 minutes, 57 seconds anything on that is question one and then second question is in terms of CCTV camera issue so at least whatever we 22:05 22 minutes, 5 seconds have spoken with uh peers we understand compared to Adita the preparation level at PS might uh be slightly lower. So is 22:14 22 minutes, 14 seconds there a potential to gain material market share uh as the issue uh progresses over next uh 6 months and uh 22:22 22 minutes, 22 seconds will it result in uh higher working capital also? Yeah, thanks. 22:27 22 minutes, 27 seconds Yeah, thank you Anerut. I think I'll take the first question on the IRA and XC view. See the logic of launching these brands were because we wanted to 22:35 22 minutes, 35 seconds evolve with a substantial market share as a company. CP plus has already close to 40% and we believe it we we we will 22:44 22 minutes, 44 seconds strive to further scale this up. Now there are you know we have we being the largest player in the market in trading 22:51 22 minutes, 51 seconds and distribution across India. There are set of customers who believe in a depth distribution model. So we launched the next view brand to cater to those 22:59 22 minutes, 59 seconds customers like a guy maybe in Surat will say I want exclusivity in Surat. A guy in Aabad will say I'm in Ahmedabad exclusive. So it's like a city-based 23:06 23 minutes, 6 seconds exclusive kind of a model with with the Lexi View brands and this this takes care of them. Had we not done that, these guys would probably give given 23:14 23 minutes, 14 seconds some you know ray of light to small private Indian other brands. Uh and these are long-term partners who have been working with us on one of our 23:23 23 minutes, 23 seconds brands. So Nex view takes care of that story. the product will go live uh or if all goes well end of this month 23:30 23 minutes, 30 seconds or the first week of March in terms of feeding the market the products will start flowing in the market we just 23:36 23 minutes, 36 seconds awaiting the final BIS uh the sec is all done so any any day it will come and then we'll start shipping uh 23:45 23 minutes, 45 seconds the IRA brand will go towards next quarter and that will be uh where we have an option of you know playing price card against the private Indian brands 23:54 23 minutes, 54 seconds the longtail of anag organized you know small things. So there we are not playing very big but more just keeping something under our belly and uh between 24:02 24 minutes, 2 seconds these two brands we believe over the years uh 7 8% 10% of our revenue may 24:09 24 minutes, 9 seconds come onto this but we we are yet to take take the final call because the product is still yet to hit the you know the the 24:16 24 minutes, 16 seconds field so I think in our other quarter down the line we'll have a fair visibility of what revenues we will plan we have some plan but it's too early to 24:24 24 minutes, 24 seconds make a a solid comment out of The second question is with respect to uh the market share uh than the 24:34 24 minutes, 34 seconds readiness of the competitors. Yes. Uh we believe we are we are right now the the only player who has the solid readiness 24:41 24 minutes, 41 seconds with respect to all facets of business be it the market reach coverage be it brand power be it uh distribution be it 24:50 24 minutes, 50 seconds the manufacturing localization certification all those things. So we are putting all our guns on fire and uh we feel that in 24:58 24 minutes, 58 seconds the next 6 to 12 months our market share will will continue to rise. Now to what percentage is early to say but uh we we we are trying to hit the halfway mark. 25:08 25 minutes, 8 seconds Let's see how it goes. 25:11 25 minutes, 11 seconds Uh sure sir and uh just ask you the working capital uh do you see any increase in working capital? 25:18 25 minutes, 18 seconds Uh not really. I think we should be we should be in the similar lines in the coming year also. Uh because you see when there is a supply tightness also 25:26 25 minutes, 26 seconds from across the board. Uh the extens extensive use of working capital will not be probably required. So uh I think 25:34 25 minutes, 34 seconds more broad-basing and um more faster turnarounds will be will be the situation. So we are improving on that side. So I don't see even if with the 25:43 25 minutes, 43 seconds high growth uh uh some uh slip up here and there but still the faster turnaround will balance it out and uh we 25:51 25 minutes, 51 seconds we should not have an excess requirement of working capital you're not factoring in any of them. No sure so sure that's uh very helpful. 25:58 25 minutes, 58 seconds Last thing uh as the inventory uh means as the uh supply chain situation remains tight I guess the inventory 26:05 26 minutes, 5 seconds [clears throat] in the trade may also reduce and uh while the demand for product may remain but the trade inventory goes down. So it's a very 26:13 26 minutes, 13 seconds ideal situation for price hikes. So uh you see a possibility of a uh very strong price hike at the earliest or it will be more of a staggered manner. 26:25 26 minutes, 25 seconds So I think a double-digit hike is just across the line I think from the coming quarter and let's see after that uh 26:33 26 minutes, 33 seconds staggered way how we can do because the impact is sizable with respect to the flash and all and with such impact you need to you see the smaller players will 26:42 26 minutes, 42 seconds never take a stance so they will play it safe so there will be further gaps which we foresee that's where we anticipating. 26:51 26 minutes, 51 seconds Okay. Okay. Sure sir. So this is uh very helpful and uh uh many congrats to the team. Thanks. Thank you. Thank you. 26:59 26 minutes, 59 seconds Thank you ladies and gentlemen. A reminder if you wish to ask a question please press star and one. 27:08 27 minutes, 8 seconds We take the next question from the line of Duv Jen from Ambit Capital. Please go ahead. 27:14 27 minutes, 14 seconds Thank you for the opportunity sir. So my first question is on market growth right. So you spoke about doubledigit market growth in uh you know in the 27:21 27 minutes, 21 seconds coming year. So if you could just speak about some of the sectors that in your view are doing well in terms of growth and incrementally over the next two or 27:29 27 minutes, 29 seconds three years which are the two or three subsectors you expect to drive this uh growth consistently ahead. 27:37 27 minutes, 37 seconds So uh do uh market you know uh India is actually still underpenetrated with these technologies. Uh the general uh 27:46 27 minutes, 46 seconds you know consensus is 16 18% market growth should happen year on year. We feel last year was a little muted growth 27:53 27 minutes, 53 seconds because of the transition to the new certification norms and uh there there is an expectation of a pent-up demand 28:00 28 minutes growth in this year. Uh lately due to the supply chain challenges and the cost rise we have internally mitigated that 28:08 28 minutes, 8 seconds maybe the pentup will not happen and it'll just remain at the 15 20% slab and that kind of growth will happen. Now with respect to sectors I mean this 28:17 28 minutes, 17 seconds coming two years we see huge growth coming when we talk about government we see huge growth from railways national highway authority where they are removing all the all the toll nakas 28:26 28 minutes, 26 seconds railway coaches railway itself will be at 2 3,000 cr worth of supplies in the coming two years and we we are one of 28:33 28 minutes, 33 seconds the most solid contender uh on that front and many other government sectors you know uh will be there private sector 28:40 28 minutes, 40 seconds enterprise also is growing whenever there is new establishments they are deploying it's part of their uh establishment now and so is in the small 28:49 28 minutes, 49 seconds businesses and home. So I can't define a specific sector uh barring uh if you talk about a high ticket fourdigit uh 28:57 28 minutes, 57 seconds revenue where there's NHI and railway which we can see but uh across all manufacturing manufacturing is scaling 29:04 29 minutes, 4 seconds up like crazy in every sector they all need surveillance also. So uh all these sectors are deploying technologies uh 29:12 29 minutes, 12 seconds and more interestingly is now there's a lot of talk on AI and our partnership with Qualcomm is just apt and the right time. So we feel in the coming two few 29:21 29 minutes, 21 seconds years this will become we we intend to make it mass for everyone to use at least in the enterprise government trickling down to the theme sector. 29:31 29 minutes, 31 seconds Sure sir and for second question linked to the comment that you made right with respect to AI and generally the share of IT going up so you know for the next 29:39 29 minutes, 39 seconds year you've you know guided for a very strong growth so uh if you could just talk about uh you know what kind of premiumizationdriven growth that we see 29:48 29 minutes, 48 seconds uh in the next year so you know one is price hike second is volume growth uh but you know if you have to break down the growth guidance for the next year that would be very helpful 29:57 29 minutes, 57 seconds that's very important so you see we look at the front end camera devices. There are three categories we we bucketize the product. 30:04 30 minutes, 4 seconds One is analog HD. Second is the IP camera and third is the Wi-Fi 4G home cameras. They we call it the 30:10 30 minutes, 10 seconds plug-and-play devices. Now what is going to happen is HD is going to go flat. HD will not grow and HD ASPs 30:19 30 minutes, 19 seconds are maybe uh 30% of a IP camera. So 30:28 30 minutes, 28 seconds only four cameras will be put whether you put IP or analog or Wi-Fi because that can most likely cover or maybe five 30:35 30 minutes, 35 seconds camera four or five. So the the whole growth is going to be on the IP maximum and some growth in the Wi-Fi. IP is 3 30:43 30 minutes, 43 seconds point almost three plus three times or three and a half times cost of a analog camera. 30:50 30 minutes, 50 seconds uh and that is because of the scalability, because of the flexibility, control of the product, because of AI usage in the future. uh so that is what 30:58 30 minutes, 58 seconds is going to drive. So there is a if you talk about per unit ASP of all cameras put together that will grow up because 31:07 31 minutes, 7 seconds HD is not growing and IP is growing in terms of total units. Uh and I think the price rise and the cost rise will also 31:15 31 minutes, 15 seconds play an impact. We haven't to be honest factored too much on that in our guidance at the moment. We are still yet 31:23 31 minutes, 23 seconds to do that because we haven't passed it on. So, so we have some leeway there although. 31:29 31 minutes, 29 seconds Fair enough. Sir and sir, if you could just spell out the contribution of Dawa revenue for the 9 months in this quarter and what is the kind of revenue you 31:36 31 minutes, 36 seconds expect uh to uh you know generate from that uh that vertical in FI27? 31:43 31 minutes, 43 seconds So, so I think DA first I'll take the second part. Next year would be not even 150 crores of our revenue. So, it'll be just 31:52 31 minutes, 52 seconds like a feeder thing. Uh, so it's negligible. We it doesn't cross our mind also in our planning. And so this year also the whatever inventories we had we 32:01 32 minutes, 1 second cleared out. Now the revenue is about 10 15 crores a month kind of a thing only. 32:06 32 minutes, 6 seconds It's not much in this year also. So group the CP revenue as we have said is almost at 87%age. So 32:14 32 minutes, 14 seconds BC is almost touching 90 plus going forward. 32:18 32 minutes, 18 seconds Okay. Okay. And thank you so much and all the best. Thank you. 32:25 32 minutes, 25 seconds Thank you. 32:28 32 minutes, 28 seconds We take the next question from the line of Nosh Chadri from Aditya Bila Mutual Fund. Please go ahead. 32:35 32 minutes, 35 seconds Yeah. Hi. Uh thanks for the opportunity and congrats on very good set of numbers sir. uh first uh 32:42 32 minutes, 42 seconds on the uh on the price hiker I just wanted to understand because historically this category would have been uh largely deflationary category 32:51 32 minutes, 51 seconds and this is the way uh the channel and users mindset would have been how you think u u the price hike would be 33:00 33 minutes absorbed and should not impact anything on the demand side at least for short term because nobody in the channel would 33:08 33 minutes, 8 seconds have you know experienced this kind of thing from this category. 33:14 33 minutes, 14 seconds Yeah. Hi Nashad. Thank you. So I think Nashad, we we are you absolutely right. 33:19 33 minutes, 19 seconds People are not used to these kind of things. But what what what is happening this time is it's across the board. It's not just security and surveillance 33:26 33 minutes, 26 seconds today. You talk about the Nvidia GPU, you talk about a Seagate hard disk, you talk about uh a basic laptop. I was told 33:34 33 minutes, 34 seconds 45,000 laptop is now 65 70,000 in the market already. So it's already 40 50%, 33:41 33 minutes, 41 seconds 30%. So what is happening is the price hike in the very higherend products will not be that much because those chips are 33:49 33 minutes, 49 seconds not going too high. There it might be just a single digit in the medium range will be probably early double digit. But 33:56 33 minutes, 56 seconds the low-end one, the entry- level one is where the maximum impact is because the DDR 3 is reduced completely. It's now 34:04 34 minutes, 4 seconds going to DDR4. Then there is most of the manufacturers have started have stopped making 8 and 16 GB. Their entry level 34:11 34 minutes, 11 seconds has gone to 32GB. So that entry-level product which uh you know the low-end uh you know developing countries were using 34:20 34 minutes, 20 seconds is is in the under challenge and uh when you add a medium range SOC or DDR to make that product the cost goes to a 34:28 34 minutes, 28 seconds mid- mid-level product. So that's where the impact is. We believe uh the channel is mentally ready. The you know the 34:36 34 minutes, 36 seconds dealer distributors are mentally ready because for last 2 3 months they are seeing this in the market and one of the product we trade is the micro SD card 34:44 34 minutes, 44 seconds with our Wi-Fi camera. The cost has gone up 3x already and it's whatever we are getting people just buy. So it's not 34:51 34 minutes, 51 seconds something which you know we we are quite confident that that absorption will happen and like I said the pent-up demand we were expecting will happen 34:59 34 minutes, 59 seconds this year. Whether it'll happen or not is yet to see to be seen but the normal growth of the market will happen in 35:05 35 minutes, 5 seconds terms of 15 20%. We believe that should happen may not have the pent-up demand. 35:10 35 minutes, 10 seconds So that is the the mitigation we have done but more than that will be covered up by the revenue growth itself uh uh in terms of the the price resetting. 35:21 35 minutes, 21 seconds So uh 15 20% volume growth should not be a challenge and balance uh you will cover from the price hike. 35:28 35 minutes, 28 seconds So that is so you can say we we will target more than 20% revenue unit growth uh and the balance from price hike and 35:36 35 minutes, 36 seconds then this unit growth will largely happen on IP camera not on the analog HD so that will the ASP is much higher 35:45 35 minutes, 45 seconds right and second on the um on the uh growth levers uh beyond FYI 28 if I 35:52 35 minutes, 52 seconds understand it correctly your core categories would hit a substantial market share by then and post that um how should we you know look at Adida 36:01 36 minutes, 1 second infoch beyond fi 28 uh between 28 to 3031 how the growth journey would be what are the 36:09 36 minutes, 9 seconds levers we have in place so nshad that's a farrawn question but I can give you some sense of what we are 36:17 36 minutes, 17 seconds thinking so we are preparing ourselves to be a global company uh we are you know uh preparing ourselves uh on all 36:27 36 minutes, 27 seconds you of fronts uh the Taiwan R&D setup some more we are expanding which will come in the future uh some inorganic 36:35 36 minutes, 35 seconds plans are going on uh you know so we are looking at being one of the large players from India moving into the world 36:43 36 minutes, 43 seconds market and having bases in multiple countries uh and probably expand some product categories without diluting the 36:50 36 minutes, 50 seconds focus of uh highest poss you know market share as a single largest highest market share in India in this product category. 36:58 36 minutes, 58 seconds So that's where we are working and then the the the last point is to enter into the cloud and the cloud data center and 37:06 37 minutes, 6 seconds the AI services. So these are the visions. Uh so work is going on and all uh how much how far we will be 37:14 37 minutes, 14 seconds successful uh is early times but uh that's the direction we are taking the company into. 37:21 37 minutes, 21 seconds Sure sir. Thank you so much. All the thank you. Thank you Misha. Thank you ladies and gentlemen. If you wish to ask a question, please press star and one. 37:33 37 minutes, 33 seconds We take the next question from the line of Pratik Chadri from Samaria Capital. Please go ahead. 37:41 37 minutes, 41 seconds So if we uh look at you know the number of players uh which are getting into this market uh what would be the current 37:51 37 minutes, 51 seconds number presently uh in terms of players having both ER and SWC 37:58 37 minutes, 58 seconds uh and also I I mean we presume that there are many in the pipeline you know 38:04 38 minutes, 4 seconds uh so what is your current perspective on this and how do you see that uh shaping up industry dynamics over the next one two years. 38:15 38 minutes, 15 seconds So Pratik uh uh before the er the if you had studied the earlier presentations 38:22 38 minutes, 22 seconds the market was segmented almost one/ird into Chinese one/3 into Indian brands and balance one/3 was unorganized and 38:30 38 minutes, 30 seconds some you know uh global brands. So right now the ER certification I I don't know the exact number but I think uh you know 38:39 38 minutes, 39 seconds five six Indian brands have gotten some models and about five seven global brands have got so a dozen over brands have been have qualified now I don't 38:49 38 minutes, 49 seconds know how much portfolio is qualified for all uh CP plus of course is the largest one at the moment and uh most of them 38:56 38 minutes, 56 seconds you know most of them apart from the Chinese who don't qualify any further did not have proper manufacturing ing 39:03 39 minutes, 3 seconds localization or any you know of the proper setup in India there's just few people doing here and there one or two offices that kind of thing so they're 39:11 39 minutes, 11 seconds all scaling up their infra step by step some are some are not some are living with that so it right now the global 39:18 39 minutes, 18 seconds brands doesn't cross our mind in terms of uh because their pi is less than 10% of the overall market uh which is another five six brands who have 39:27 39 minutes, 27 seconds qualified and largely in the enterprise sector here and there very selective in the and nowhere in the SMB and the home 39:35 39 minutes, 35 seconds market which is almost 60% of the Indian market. Uh the other Indian players most of them who have qualified barring one 39:42 39 minutes, 42 seconds or two who were there in the retail distribution the most of them were again in the enterprise and government. So enterprise government yeah some brands 39:50 39 minutes, 50 seconds have qualified retail distribution still there are not much competition I don't see with this supply tightness of the 39:57 39 minutes, 57 seconds semicon and the memory uh that new entrance will come so fast so any new entrant maybe from another industry 40:05 40 minutes, 5 seconds would want to try this may have to take a year or two delay because first they will be grappling with their own product 40:12 40 minutes, 12 seconds supplies because the shortage is not just in CCTV it's all across all electronics So let's say another electronics company 40:20 40 minutes, 20 seconds has to come they need to first focus on their home turf for whatever products they're doing post that they'll work on getting this and in this whether they 40:28 40 minutes, 28 seconds will get the supply is another question at the moment in terms of the semicon. 40:32 40 minutes, 32 seconds So we feel we have a good year headway at least uh and the supply shortage will play to our favor even more uh before we 40:41 40 minutes, 41 seconds see more competition and those people will of course take few years to even you know challenge uh 40:47 40 minutes, 47 seconds because it's a lot of solution selling right and Chinese players are completely out right not a single one of them would 40:57 40 minutes, 57 seconds remain post uh post April May 26 as as for policy uh they the government 41:04 41 minutes, 4 seconds has smartly done a trusted supply chain clause and that those kind of things so they don't qualify into these 41:12 41 minutes, 12 seconds okay and and how many of our models uh our camera models have been have already been er or stc certified 41:22 41 minutes, 22 seconds so we have uh a full set of products needed to cover most of the market 90% plus already qualified we we're 41:30 41 minutes, 30 seconds developing parallel as I mention mentioned multiple SOC's some of them are also qualified uh as a fallback option and some more are in the process 41:38 41 minutes, 38 seconds so we are fairly in a good good position okay okay thank you sir I'll get back in detail 41:45 41 minutes, 45 seconds thank you thank you we take the next question from the line of Anoj Kashab from A3 Capital 41:53 41 minutes, 53 seconds please go ahead I'm audible Yes. 42:01 42 minutes, 1 second Uh sir just I wanted to know do you have any data in terms of percentage uh penetration like in Indian uh if you 42:09 42 minutes, 9 seconds compare the entire population size vis to China what is the penetration right now of the products of the camera products in the frost report. 42:17 42 minutes, 17 seconds So I think it's there in the frost report and I think there must be a couple of other reports of from counterpoint as well. We'll have somebody try and see if he can get out some of the data. 42:27 42 minutes, 27 seconds Okay. Answer the uh one more sir like you have mentioned the OTAA with the Qualcomm like uh at present Adity Info Techch is basically a hardware company 42:36 42 minutes, 36 seconds right and now if uh like if we uh are we any we turn into a service company plus 42:42 42 minutes, 42 seconds hardware plus software as a service company so yeah that's the direction so even 42:50 42 minutes, 50 seconds even in the cameras we sell now there is base level of analytics that are there but what we are talking about is actually exploding the market and trying 42:57 42 minutes, 57 seconds to take AI and analytics to the mass market with Qualcomm and yes that will be part of our journey to start selling services and AI to each and every 43:06 43 minutes, 6 seconds customer that we are selling the IP camera range to so that's part of our mandate for the long term and sir uh do you have any uh like uh in 43:15 43 minutes, 15 seconds your mind any revenue break up like if like if just for imagine like 90% is hardware and 10% is software do you have some such type of data in your mind 43:24 43 minutes, 24 seconds so it's too early the qualcom relationship also you is currently in the PC stage and we're looking at anchor customers and the old AI market is also 43:32 43 minutes, 32 seconds nent. So it's too early to put a percentage to that. Uh we would have some internal benchmarks into what percentage of our revenue should be from 43:40 43 minutes, 40 seconds services but that's way too early at this point in time. 43:44 43 minutes, 44 seconds Thank you sir. Best of luck for your future endeavors. Thank you. Thank you. 43:52 43 minutes, 52 seconds We take the next question from the line of Arguta Jooshi from ICA securities. Please go ahead. 43:58 43 minutes, 58 seconds Yeah. Uh thanks for the follow-up question. Uh just one question. Uh there have been lot of news flows uh regarding 44:06 44 minutes, 6 seconds uh railways uh the cars uh even CBAC ICAC schools also installing the cameras 44:13 44 minutes, 13 seconds in the classroom. So any further update on that u and uh uh in which stage these 44:21 44 minutes, 21 seconds uh initiatives from the government would be I mean it's either a planning stage or uh execution and um where does it 44:28 44 minutes, 28 seconds info stand as of now or that? Yeah thank you. So Anu the railway orders have started flowing in the orders are closed 44:37 44 minutes, 37 seconds the orders already logged in the system so the materials are being procured so you should see some billing in this quarter and majority of the billing will 44:43 44 minutes, 43 seconds flow into the h1 of next year and uh we will have our share of the business uh so it's still ongoing there are tenders happening left right and 44:52 44 minutes, 52 seconds center we are the largest and as the largest player we would take our market share 44:59 44 minutes, 59 seconds yeah thanks thanks and uh in terms of schools etc any any update on that? 45:05 45 minutes, 5 seconds So yeah, the government has mandated for the schools to uptake but it's a slow process on it's not as if it's a you know definite mandate where everybody 45:12 45 minutes, 12 seconds has to comply overnight. So we are getting wins there but it's not something it's it's not a large tender or a large state-driven thing. It's you 45:20 45 minutes, 20 seconds know more school-wise district-wise and that falls into our mid-market strategy and we are winning those cases. You know, you know, we mentioned in our 45:27 45 minutes, 27 seconds speech that, you know, we can see CT plus brand permeating all through the layers. So, it's not just the market shares happening at the distribution. 45:35 45 minutes, 35 seconds This has actually now become the def facto brand even at the end consumption level be it the retail customer, the mid-enterprise or the large corporate or 45:42 45 minutes, 42 seconds government. So, uh that's the positive signs that we are seeing and any new green field projects that are coming in by default it's on CP plus. 45:52 45 minutes, 52 seconds Okay. Sure. Sure. Uh very helpful. Many thanks. Thank you Aner. 45:58 45 minutes, 58 seconds I think that's the last question we take. 46:03 46 minutes, 3 seconds Yes sir. Ladies and gentlemen, with that we conclude the question and answer session. I now have hand conference over to the management for their closing comments. 46:13 46 minutes, 13 seconds Thank you guys for joining this call. U you know I we'll host further calls as well and we hope to stay on this growth trajectory and you know stay as per or even overd deliver on our guidance. 46:23 46 minutes, 23 seconds Thank you guys. 46:26 46 minutes, 26 seconds Thank you. On behalf of Access Capital, that concludes this conference call. 46:30 46 minutes, 30 seconds Thank you for joining us and you may now disconnect your lines. Thank you.