Aditya Infotech rebounds on fundraise plans; analysts see up to 20% upside
The shares of Aditya Infotech have made a notable recovery after a recent equity raise focused on enhancing capacity. However, the company is grappling with high electronic component prices that are squeezing profits. On a positive note, the introduction of new STQC norms is expanding the market opportunities for Indian manufacturers.
Shares of Aditya Infotech, a security and surveillance products manufacturer, have rebounded 4% over the past two trading sessions following news of fresh equity fundraising for capacity expansion. The share price decline has been reduced to 11% since August 12, when the company disclosed weaker-than-expected June quarter results.
Higher prices of electronic components impacted profitability on a sequential basis in the June quarter. Despite retaining the operating margin before depreciation and amortisation (EBITDA margin) guidance at 14-15% for FY27, the challenge remains due to the 60% sourcing share of components. Aditya Infotech's product lineup includes cameras, video recorders, biometric, access control, and mobile surveillance solutions.
A significant growth driver has been the Standardisation Testing and Quality Certification (STQC) norms, effective in April 2025, affecting Chinese companies' market share in IP-driven surveillance systems, which has risen to over 16% in FY26 from 27% in the previous year. Aditya Infotech's financial performance reflects the benefits of these new regulatory norms.
In FY26, revenue grew 35.6% to ₹4,220.8 crore, EBITDA increased 124% to ₹579 crore, and net profit surged 165.7% to ₹492.7 crore. The stock gained 128% so far in 2026, and its market cap has expanded to ₹41,124 crore from ₹7,900 crore at its IPO last July, with the price-earnings multiple expanding to 86 from 68 during the period.
Rising input costs prompted the company to raise product prices by 15-20%, lower than the FY27 indicative raise of 25%. Its efforts to source components locally will take two to three quarters to meaningfully impact financials. The recent qualified institutional placement worth ₹1,500 crore to boost capacity is timely as current capacity utilization is 85-90%, enhancing revenue visibility in a sustained demand scenario.
Analysts view the stock with a buy call, with a potential 10-20% upside from Friday's closing price of ₹3,476.3.
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