See the bright Sun: Aditya Vision

Stock Opportunities Untested - but worth a good look
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Aditya Vision Q4 and year ending FY 23 concall highlights -

Total of 110 retail stores in Bihar+Jharkhand+UP

50 pc mkt share in Bihar ( source - Crisil )

Avg Store size - 4000 sq ft

Zero store closures since inception !!!

Last 2-3 yrs, gross Margins ranging between- 12-15 pc, Net Margins between 3-5 pc - Very healthy for an electronics retailer !!!

Aim to reach 150 stores by FY 25 end. That would be a 6X store expansion over FY17

Rough Qtly breakup of sales-

Q1-30 pc
Q2-18 pc
Q3-28 pc
Q4-24 pc

FY 23 outcomes -

Sales- 1322 vs 900 cr
EBITDA- 133 vs 83 cr, Margins @ 10.1 vs 9.2 pc
PAT- 64 vs 35 cr, Margins @ 5 vs 4 pc

RoE- 28 pc, RoCE- 60 pc !!!

Aim to grow topline by 20-25 pc CAGR over next 3 yrs

Q4 outcomes-

Sales- 306 vs 260 cr
EBITDA- 28 vs 29 cr
PAT- 7 vs 8 cr

Most of the Debt on books as on 31 Mar is due to inventory build up for the upcoming summer season. Long term debt is aprox-3 pc of the total debt

Current No of stores in Jharkhand- 17, UP(East) - 05 - both culturally similar, under penetrated Mkts where Aditya’s brand is strong

Have set up a customer care help line - ‘Aditya Seva’ to address customer complaints

Avg store breakeven time- 6 months, Payback time- 03 yrs

Have entered into a lease agreement for 20 more stores. This will take the store count to 130

Same store growth for FY23 at 33 pc !!!

Avg Capex, Inventory for a new store- 50 lakh, 2cr

Mar 23 was unexpectedly weak due unseasonal rains affecting Q4 performance

Huge inventory build up towards 31 Mar also because OEMs want to liquidate their inventory and retailers like Aditya get very good deals on these items

Confident of clocking > 20 pc sales (minimum) growth in FY 24 despite unseasonal rains in Q1

Stores in UP, Jharkhand doing well

Avg selling price / product trending up as ppl are shifting towards buying more premium products

Margins unlikely to go up from here

Total Cash+Equivalents at 82 cr

National retail chains are also present in Bihar. Aditya Vision has been doing well despite their presence

Very Old and Mature stores>20 yrs old, still delivering Mid Single digit same store growths

Advertisements for FY 23 at aprox 1pc of sales

Newer stores are generally bigger than older stores

Disc: not invested, planning to take up a tracking position soon. Quite impressed by management commentary and numbers

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@ranvir what are thoughts about accounting fraud done .
Even I also liked the business and Aditya vision

But doubts are creating after accounting fraud

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U must listen to the first 10-15 mins of the concall. I think they ve addressed it well

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AVL NOS Q1 FY 24 N PPT.pdf (2.8 MB)

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Aditya vision Q1FY24 result

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  • The earnings call for Q1 FY24 highlighted the company’s “Financial Performance and Strategic Decisions.”
  • Despite an unfavorable environment, the company achieved exceptional growth in revenue and profit.
  • The unseasonal rains in April and May impacted demand for compressor products, but June witnessed a robust recovery and resulted in the highest-ever quarterly revenue.
  • Operational revenue increased by 46.23% YoY to Rs. 641.23 crores, with PBT increasing by 47.12% YoY to Rs. 49.33 crores, and PAT increasing by 41.26% YoY to Rs. 37.42 crores in Q1 FY23.
  • Bihar contributed the most to the top line with nearly 88%, while Jharkhand and UP contributed 10% and 2%, respectively.
  • The rise in scale of operations, contributions from new stores, and prudent inventory management fueled the strong growth.
  • The company’s inventory decreased by approximately Rs. 33 crores, resulting in an optimal level of inventory and a reduction in net debt.
  • During the quarter, 12 new showrooms were opened, with the total store count reaching 117.
  • The company aims to open 8 to 12 more new stores in the next three months, surpassing its initial target of 125 stores for the entire fiscal year '24.( confirmed for 140 stores)
  • The company expanded its operations in Jharkhand and Uttar Pradesh, establishing itself as the largest consumer electronic retailer in both states.
  • The company entered the BSE top 1000 list of companies by market cap, standing at 763rd position as of March 31, '23.
  • To fulfill the requirement of having one independent woman Director for the top 1000 listed entities by market cap, CA Apeksha Agiwal joined the board as Non-Executive Independent Director.
  • The company has achieved nearly half of its revenues for the entire financial year '23 in Q1 FY24.
  • Gross margin was maintained above 15% driven by an optimal product mix.
  • EBITDA for the quarter increased by 40.6% to Rs. 63.30 crores.
  • The company’s store count reached 117 in Q1 FY24, with 12 new showrooms opened during the quarter.
  • The company aims to continue expanding and setting new benchmarks.
  • The strong financial performance in Q1 FY24 was primarily driven by prudent financial management and the growth strategy.
  • The company continues to maintain transparency, good governance, and a commitment to creating value for stakeholders.
  • The positive momentum in revenue and profit gives the company confidence in its future prospects.
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CONCALL TRANSCRIPT JULY 23.pdf (1.4 MB)

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Total number of stores 118

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As per a notification today 2 more stores have been opened.
Total store count: 120

I am a bit jittery as to whether the management is spreading itself too thin? As they also need to spend energies on other listed entity- Aditya Consumer.

Aditya Vision BSE.pdf (498.0 KB)

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CRISIL RATING UPGRADE AVL AUG 23.pdf (907.7 KB)

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Total number of stores now 125. Sahibganj (Jharkhand).
In this FY their number of store grew by ~20%. Form last year to date store count grew by ~40%. Aggressive growth.

CRISIL rating upgrade to A-/ stable from BBB+/ stable.

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India leading electronic retailer quite sanguine on prospects due to world cup and good sales on 15th August 23

Sector seems to be doing well. EMIL & AVL came with robust nos and Q2 seems to be doing well.

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HDFC Mutual fund has bought 5 lakh shares @ ₹2200/- per share today. AVL is getting right partners on its journey.

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Yes Amit Ji,
Company is on expansion spree and now with the size getting bigger many such deals will happen and FII/DII holdings will go up.
It will become more so once company lists itself on NSE.

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126th store opened in Bihar, Aurangabad.

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127th store opened in Bihar, Gopalganj. Aggressive preparation before the festive season begin Oct onwards.

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Two new stores in UP, Balia and Mirzapur. Total count 129

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Any idea how will Amazon disrupt their business model in 5-10 years? We saw that many such B&M businesses suffered hugely due to players like Amazon in big cities.