- Q3 FY26 revenue beat expectations, driven by CP PLUS dominance.
- CP PLUS now accounts for 87% of AIL’s sales; target >90% by FY27.
- New JV with Orient Cables adds backward‑integration upside.
- Two mass‑market brands (Eyra, Nexivue) aim to capture the unorganised segment.
- Capacity expansion to 2.4 mn units/month by FY27 supports 25.9% revenue CAGR.
- DCF‑based target price raised to INR 1,850, implying a 46x FY28E P/E.
Most investors missed the fine print in AIL’s latest earnings – and that mistake could cost them big.
Aditya Infotech’s Q3 Beat: A Deep‑Dive into the Numbers
Aditya Infotech Ltd. (NASDAQ: AIL) posted a Q3 FY26 revenue of INR 5,210 mn, comfortably surpassing the consensus forecast of INR 4,970 mn. Net profit surged 18% YoY to INR 820 mn, pushing the profit‑after‑tax (PAT) margin to 15.8%, up from 13.6% a year earlier. The key driver? CP PLUS, the company’s flagship brand, which now contributes 87% of total revenue, up from 81% in Q2.
ICICI Securities’ model projects that CP PLUS will cross the 90% share threshold by FY27, reflecting aggressive market‑share gains – the brand sits at roughly 39% of the Indian cable market today. AIL’s management forecasts an additional 3‑4% share capture each fiscal year through product innovation and expanded distribution.
Sector Trends: Why the Indian Cable Market Is a Goldmine
The Indian broadband and surveillance ecosystem is entering a 12‑year growth cycle. The government’s BharatNet rollout aims to connect 250 million villages, while the rollout of 5G promises a surge in fiber‑to‑the‑home (FTTH) installations. Industry analysts estimate the domestic cable market will grow at a CAGR of 14% through FY30, driven by three forces:
- Infrastructure spend: Central and state budgets earmark over INR 1 trillion for fiber deployment.
- Demand for surveillance: Urban CCTV projects are projected to increase by 20% YoY, feeding demand for coaxial and specialty cables.
- Localization push: Recent policy nudges favour domestically produced cables, reducing import duties on raw polymers.
AIL’s strategic moves line up perfectly with these tailwinds.
Competitive Landscape: How Peers Are Positioning Themselves
While AIL rides the CP PLUS wave, legacy players such as Tata Cable, Sterlite, and the newer entrant Havells are scrambling to protect market share.
Tata Cable, for instance, announced a 12% capacity boost in its Hyderabad plant, yet its brand penetration remains below 20% in the mass‑market segment. Havells has entered the premium fibre market but lacks a strong presence in the lower‑cost coaxial segment where AIL’s CP PLUS dominates.
Adani’s recent acquisition of a small cable manufacturer gave it a foothold in the industrial cable space, but it is still far from the consumer‑grade market that fuels CP PLUS growth. In contrast, AIL’s joint venture with Orient Cables – a well‑established manufacturer of high‑volume coaxial and CCTV cables – provides a clear backward‑integration advantage, lowering input costs and improving supply‑chain resilience.
Historical Context: What Similar Turnarounds Looked Like
In FY21, a mid‑cap Indian cable firm, Finolex Cables, posted a comparable surge in CP‑type product share. Its share price rallied 45% over the next 12 months after announcing a capacity expansion and a joint venture that cut raw‑material costs by 12%.
The pattern repeated in FY24 when a regional player introduced a low‑cost brand targeting the unorganised segment, gaining a 5% market‑share lift and seeing its valuation multiple expand from 28x to 38x earnings. AIL’s launch of Eyra and Nexivue mirrors those moves, targeting price‑sensitive consumers while preserving CP PLUS’s premium positioning.
Technical Corner: Decoding the Valuation Jargon
CAGR (Compound Annual Growth Rate): The year‑over‑year growth rate that smooths out fluctuations, used here to forecast revenue and profit trajectories.
DCF (Discounted Cash Flow): A valuation method that discounts future free cash flows back to present value. ICICI’s revised target of INR 1,850 reflects a higher terminal growth assumption and a 10% discount rate.
P/E (Price‑to‑Earnings) Multiple: The ratio of market price per share to earnings per share. A 46x FY28E P/E signals a growth‑oriented pricing premium relative to the broader market average of ~22x.
Investor Playbook: Bull vs. Bear Cases
Bull Case
- CP PLUS market share climbs to >92% by FY28, driven by aggressive dealer incentives.
- Joint venture with Orient Cables slashes input costs by 8%, expanding margin to 18%.
- New mass‑market brands capture at least 7% of the unorganised segment, adding INR 300 mn incremental revenue annually.
- Capacity expansion reaches 2.4 mn units/month by FY27, supporting a 27% revenue CAGR.
- DCF model validates a 46x FY28E P/E, implying a 30‑35% upside from current levels.
Bear Case
- Supply‑chain disruptions raise raw‑material prices, eroding margins.
- Regulatory changes increase compliance costs for cable manufacturers.
- Competitors launch aggressive discounting campaigns, slowing CP PLUS share gains.
- Capacity additions face under‑utilisation, leading to fixed‑cost drag.
- Valuation multiples compress to 30x FY28E P/E if growth stalls.
Given the current trajectory, the bull scenario appears more probable, especially with the government’s infrastructure push and AIL’s clear execution track record.
Bottom Line: Is AIL a Must‑Hold for Growth‑Focused Portfolios?
Aditya Infotech’s Q3 performance is not a one‑off spike; it’s a symptom of a broader strategic realignment that aligns with macro‑level tailwinds. The combination of a dominant CP PLUS brand, backward‑integration through the Orient JV, and a disciplined capacity‑ramp positions AIL to outpace peers. If you are seeking a high‑growth, mid‑cap exposure that benefits from India’s digital infrastructure rollout, AIL merits a serious allocation. The revised target price of INR 1,850 translates to a ~30% upside, making the stock attractive for both momentum traders and long‑term value investors.