See the bright Sun: Aditya Vision

Inventory is always on the books for retailer and is full financed by retailers, including the liability. Anybody who has any business experience of running a shop or retailing knows this.

One can check this in another similar electronics retailers, ELECTRONICS MART INDIA, which is coming with an IPO this month. They have got Sebiapproval also. DRHP attached.

They also have 99 stores in Andhra/Telangana, with similar revenue, but coming at a much higher valuation (price band still not announced). This can be another trigger for re rating of this stock if it happens.

Q1 and Q3 are peak quarters, so inventory just ahead of this Q is always high, eg in Q1 they did sales of 510 cr (GST is 16 %), so net revenue is 430 cr, net of GST, so having 200 cr of inventory is normal. This will keep on increasing as co scales up, but should be seen as % of sales.

Interest cost should never be calculated on closing short term debt level, as some debt may have been paid during the year as it is short term debt, but during the year at some time debt could be higher, hence higher interest cost, AR clearly says cost of borrowing is in the range of 7-8 %.

The one of the reason of high margin is low cost (rental and employee cost), but same ASP (average selling price). Low cost is an advantage, being present in smaller towns.

The other point regarding competition is as pie is growing (unorganized to organized and also market size growing @10-12%) there is space for more players. eg vijay sales is v old and is present mostly in all cities, then reliance digital came and then also vijay kept on growing, then Croma came and all 3 are still growing fast. In Aditya vision towns, there is no vijay sales or reliance or croma ( v little), so can assume competition is same or infact lesser.

Having 55 % market share in Bihar/Jharkhand is itself a big moat, it gives them bargaining power and all OEM have to go through them, so it becomes buyer ( Aditya) market, who decides the terms. OEM is also happy as they don’t have to deal with large n if small unorganized retailers.

People living is smaller towns can relate to this story better, where does the customer gets all the brands, eg at competitive prices and good service under one umbrella.

A quick comparison of other retailers margin is below

EBIDTA margin
Reliance Retail 7%
Vijay sales 7%
Aditya vision 9%
Electronics mart 5%
Croma 5%
D mart 8%

Electronic Mart India Ltd DRH for reference.

  1. It is one of its kind company in India, no peer, with more than 50% market share of business in one of the toughest place in India (Bihar) to do business.

  2. Aggressive growth in establishing the stores in Bihar and Jharkhand. Targeting Eastern UP, Chattisgarhin next leg. Small town customers are its target.

  3. Each Store establishment with ~Rs. 50 Lakhs. First year complete cycle sales is Rs. 6Cr, break even is at Rs. 3.5 Cr. Stores become profitable from first Quarter itself.

  4. Asset light company, all rental establishments. Due to high market share company receives not only the high discount over its product but also the sales rep of all brands associated takes the ownership of selling the product.

  5. Competition with Amazon, Flipkart, Croma type companies may not hurst as all the sellers registered on these type platforms have to cough up almost ~10% margin to them. whereas Aditya Vision use that margin also to lower its prices to gain customer. Also at Croma and other online retailers have a time taking decision making process, whereas Aditya vision store staff take these decision locally as all brand sales representatives are available at store itself.

  6. Inventory turn around is almost 5.1 times

Financial Year FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 (Covid) FY 2022 (Covid) TTM
Total Revenue 124.62 179.17 240.71 362.07 444.58 564.04 806.1 749.7 900.41 1145.51
EBITDA 1.84 2.46 3.35 5.14 7.68 17.4 34.33 43.31 67.54 90.6
PBIT 1.66 2.27 2.89 4.26 6.35 15.85 32.32 41.03 63.95 86.65
PBT 1.04 1.66 1.73 2.53 4.13 8.63 18.73 32.98 49.21 70.61
Net Income 0.71 1.11 1.16 1.7 2.77 5.76 14.01 24.68 36.61 53.5
EPS 0.95 0.27 0.27 1.39 1.96 4.08 9.93 18.88 30.43 44.48
DPS 0 0 0 0 0 0.51 2.5 5 6 5
Payout ratio 0 0 0 0 0 0.12 0.25 0.26 0.2 0.11
Revenue growth per year 0.437730701 0.34347268 0.504175149 0.227884111 0.268703046 0.429153961 -0.069966505 0.201027077 0.272209327
Debt 7.5 35.44 48.31 59.83 33.62 84.2 192.00096 115
Increase in debt YoY 4.725333333 1.363148984 1.238459946 0.561925455 2.50446163 2.280296437 0.598955339
No of Stores (Count) 16 19 28 38 43 64 79 87
No of Stores Added from last FY 3 9 10 5 21 15 8
% growth in no of stores 0.1875 0.473684211 0.357142857 0.131578947 0.488372093 0.234375 0.101265823
New Store addition cost each year (approx) 1.5 4.5 5 2.5 10.5 7.5 4
Avg Per Stores Sales 22.629375 23.39894737 20.14428571 21.21315789 17.43488372 14.06890625 14.50012658
Dividend per Share 0 0 0 0 0 0.51 2.5 5 6

Just for reference one should listen to Deepak Shenoy 's podcast on pump and dump. 44:00 minute onwards.

  1. Company in existence since long time.(tick)
  2. Stock will come to you. (how ? Anyone’s guess.) (Tick)
  3. Linear move. Keeps going up.(Tick)
  4. Story comes out. Signing big order. Promoter on tv. Corp presentations. Preferential issue to influential investors. Info on WhatsApp and twitter (tick).
  5. News flow being generated (tick).
  6. 90 percent pump and dump (we will know in hindsight), or part of 10 percent genuine company ( same as above. Time will tell).
  7. Example amtek India. Went up 10x in 2 months. Stock went to zero and delisted. 30 to 300 and 0. :slight_smile:

P.s. - No hard feelings.


Fair point… but shouldn’t we try to argue on data points vs. outlining pump/dump playbook :slight_smile:

Of course this entire thread might be about pumping… but folks have been quite transparent about their playbook = meeting the management + building a position + pumping the stock… the question to ask is - are the narrative + numbers aligned and if there is room left to play :slight_smile:


That you can judge with numbers.

One more old tweet. SME IPOs were a rage in 2017-18. many fell for them including fund managers of today who have small cases to their name today. If you want more hints wrt name of fund manager, please DM or do a simple twitter search of SME IPO and go the year 2017-18.

Be consistent in process. this is outside my pay grade. want to avoid landmines. this shenoy thread playbook is just to explain the process of pump and dump. As he said, we cannot name companies since they are still operational. Also, this pump and dump may or may not be applicable to the company being discussed in this thread. This is just to educate what happens in such pumps and dumps. Thank fully only lost 15k in 2017 :slight_smile: i fell for preferential issue crap to some known persons.

just to avoid landmines. Not alleging pump and dump. we saw it happen in 2018. so many stocks. some are trading at sub 5 rs today :slight_smile:

Still feel one can play markets through large caps / mid caps and make money provided you can invest decent capital. Buy good advisory services, they are usually more experienced and they have their own red flags. Subscribed to 2 of them. interact with them, learn from them and invest after reading those reports and conducting your own research. wahan se bhi you can get decent returns, not here for multi baggers. have seen them turn to multi beggars :slight_smile:


For those who can not do research on ground or paper it makes sense to stick with midcaps and largecaps,not much valuepicking is necessary. For those who can, it makes sense to trust their own judgement based on research and look for multibaggers . Just like there are pump and dump schemes ,there are permabears who manage funds to marginally beat index infrequently and claim assured safety to vindicate their underperformace .

Watching this company … waiting to see if it rolls back a bit with Q2 results .

Disc. Not invested


In small cap stocks , you always get two opinions. always listen both opinions and take your own decision with conviction and thorough analysis of your stock. Be independent in stock selection. I did detailed scuttlebutt of the business than only I took a call on AVL and bought AVL.

Financial are okay. No issue with debt/ cash flows or promoter selling. You cannot get all the points ticked in small cap stocks. Business is real and growing very fast. Books & Image of promoters are ok… Disc : Invested


Another red flag for any company is when you see historically its stock price going up every day or every week for very long periods on low volumes and then subsequently falls continuously also, it means you need to be doubly-triply sure of the company.

There are 5000+ stocks in the market. The most important thing is to avoid bad companies. That way you prevent catastrophic losses and then the upside takes care of itself. You don’t need to buy companies where there are multiple question marks.


This thread is starting to remind me of Jyoti Resin thread. Jyoti thread is full of negatives, most of them fair and to the point too. But stock is now roughly 30-40x from those levels since 2019. Just as a learning, I made a summary of the major negatives & positives that most of our boarders had posted in Jyoti thread. The negatives outweighed the positives easily by 2:1 or more. This post is not meant to offend anyone, but rather just highlight the perils of investing in small/midcaps.

Jyoti Resins. Concern around 2019…

  1. Not much business specific info from company. Same copy paste content in AR’s

  2. Huge receivable days (300)

  3. Promoters taking disproportionate salary, 1.07 cr on a profit of 1.05 cr in FY19.

  4. 46 cr unpaid expense on liability on a revenue base of 50 odd cr.

  5. Sales promotion & target incentive stopped from 2018

  6. Last 7 to 9 yrs have negative OCF. 2016 had positive OCF but no explanation for the reason on sudden change.

  7. Random investment in other companies

  8. Multiple times Stock manipulation (SEBI).

  9. question on land reevaluation bloating the fixed assets and no real capex.

  10. Took loan for Audi & Merc from company accounts in FY20

  11. Cash taken out of company in FY21

  12. Company imports raw material, but “value of imports calculated on CIF basis” is NIL (FY21)

  13. Company claimed to have 1000 TPM capacity while EC was just received for 600 to 900 TPM capacity around same time

  14. Very high asset turn, similar to some trading firm.

Positives Ignored

  1. Promoter increasing stake consistently

  2. Product seeing improved distribution, as per scuttlebutt

  3. First IP, Q4’21 : company claimed to be the second largest wood adhesive. Quite a claim, since Fevicol is a household name.

  4. App developed for sales team. process improvement for order/collection etc around April’21.

  5. Fixed assets went up 4-5x between Mar’19 and Sep’20, whiles sales are up only 23%

  6. Receivable days downtrend from 300 days in 2018 to 129 in 2022

  7. Scuttlebutt : less amount of Euro7000 needed vs Fevicol for same work.

Someone recently told, in India we often try to match all 36 guna for matchmaking. But am sure, if we see all the happy and successful marriages which have lasted the test of time, not many will have the 36 guna’s matching. So it’s now upto us, we want to match 36 guna’s or look for a happy marriage.
Happy Investing !!

Learning for me ? Even if you invest in companies where there are lot of questionable facts, but there is something that appeals to you, take care of your allocation and exit decisions when proven wrong.

Disclosure : Invested in this, but missed Jyoti :slight_smile:


I am from Patna . There is no depth in managment. Its a case of playing one white good company against the other as volumes of sales large at present . Small business owners have come to a conclusion that branded white goods stores are a bleeding business with all profit going to the company in case of exclusive stores . The sales of Bihar come from the entry level goods be it TV , Fridge etc . Simply looking at Per capita income and per capita income growth for states like Bihar and Jharkhand put a cap to sales growth . Have seen Local jwellers being battered by the Titans& others . Croma is yet to come and Reliance has made but a half hearted start . I find it difficult to see a very bright future here .


In Jamshedpur the stores are doing great. Almost every week to draw customer they are having lottery and lucky draw coupons. Full page advertisement in newspaper (Hindustan).
Not just sales but after sales service assurance is also working as puller. White goods is the major part of business ~80% with highest margin ~15%. Mobile is ~7%.

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Hi Alok,

I am also from Patna and we were in the same business line and I can give my perspective from a business aspect. I also think there is a lot of misunderstanding among the investor community about the core business model itself. I will share my own experience while running a small retailing operation in Patna.

  1. Orders for a season are placed during off-season by paying certain % as advances and later getting a discount. The later one buys during a season, higher the price they pay to the OEMs. Please note that I am giving a retailer perspective, Aditya Vision will also be dealing directly with the OEMs. For e.g. we used to stock Symphony and Kenstar air coolers when we bought at average prices of around 3500-4000 during off-season (say Nov-Dec) by paying 15-20% upfront (depending on relationship with a distributor). As season progressed, list prices increase and during peak season one will struggle to buy even at Rs. 5000. From sales perspective, we started at ~5000 during off season and during peak season, prices crossed 7000 (thereby approaching the MRP). On a blended basis, during a good season we could make average realizations of around 5500-6000 giving us 35%+ margins over a full season. In our case, margins were higher (vs Aditya vision) because we didn’t stock lower margin products like mobile phones. All this data is for 2014-17 period.

  2. Now that we understand the basic business model (which is working capital finance), lets see how small retailers benefit from big brands. There are always upcoming brands who want to dislodge incumbents by giving better trade conditions and discounts vs more established brands. For e.g. Kenstar was growing aggressively in Bihar at that time and gave us very good deals whereas Symphony didn’t provide large cash discounts. Our strategy was to stock both Kenstar and Symphony, but try to nudge customers to buy Kenstar. At the shop floor, a customer knows the product they want to buy (with a vague idea of the brand they will prefer), salesman then nudges him/her towards another brand which has the same look and feel, better guarantee terms and is cheaper (and also higher margins for retailer). Those customers who are very choosy about a particular brand generally prefer purchasing from an online channel, but a large proportion of customers have no clue at all. At the end, all these white goods are commodity products with a perception attached to it. Trivia: We also used to make our own air coolers which was available at our shop for a bigger discount, these used to be marketed to customers with a lower budget but made very high margins for us. That’s how all three product ranges work (established brands, competitors, white label). At the end of the day, retailer owns the customer (and not the OEMs).

  3. The per capita calculations about Bihar vs Maharashtra will not improve our understanding of a retailer like Aditya Vision. We need to focus on the value proposition of a retailer like Aditya Vision. In my understanding, there is a lot of latent demand in smaller places which get unlocked by availability when an organized retailer opens shop. Take for e.g. my wife’s family, they run a retailing operation in Biharsharif and were expanding their shop and needed to install few ACs. The brands they wanted were not available in the local shops, so they went to Aditya Vision who provided the brand they wanted, and installed the ACs on the same day. Now, this is what I call latent demand, which already exists but is only unlocked due of availability of brands in a shop.

  4. Finally on the growth runway, while doing some work on Aditya vision I got the opportunity to talk with the jewellery shop owners in Biharsharif to understand size of market. Now, Biharsharif is a very small place vs Patna or Ranchi. Each diwali, 800-1000 cr. of gold is sold in Biharsharif along with ~200 cr. of consumer durable items. In Patna, I think the consumer durable sales will easily cross 1’000 cr. in a year, as Aditya Vision itself might be doing 200 cr+ sales (combined with a similar no from Chandni Chowk shops). Simply extrapolating that, implies the overall consumer durable market is atleast 4000 cr.+ in Bihar, and probably 2000 cr.+ in Jharkhand. And this is a growing market, I dont think we need to worry too much about growth for a few years. I will rather focus on execution of the company and its focus.

All this being said, we should also keep in mind other relevant details (like cash taxes being lower than accrual taxes, political affiliations, etc.). The point of my post was to (hopefully) give some insights about consumer durable retailing business. Also, we shouldn’t just disregard an idea because they are from Bihar.

Disclosure: Not invested (no transactions in last-30 days)


some interesting input from Vijay Sales & Retailer association of Inida representative.


Being jewellery manufacturer i supply in Patna,Ranchi and Gaya.Gold sales during marriage and festival season is very good.Bihari people works in whole india and they send money back so purchasing power is there. As there is always three layers of buyer and every midle class person by TV ,washing machine etc electroic house hold with now mobile phone
.due to high population growth is going to remain.that is reason Aditya vision grow for few years


Sentiments are high for the festive season | Nilesh Gupta, Vijay Sales & Avneet Singh Marwah



“Tier 3 cities like Ernakulam, Thrissur and Trivandrum registered a 4x growth, outpacing their metro counterparts.”

By all indications we should see a bumper time for home appliance makers and retailers in this 2 Qtrs…

  • current Market cap 1700 Cr is ~11% lower than EV ~1911 Cr.
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IPO of Electronic Mart is coming from the same sector. Stock may get rerated…

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Aditya vision investor presentation