Aditya Vision Ltd

“Aditya Vision Limited Q3 and 9M FY26 Earnings Conference Call”

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Vision, represented by Mr. Yashovardhan Sinha, Chairman and Managing Director; Yosham Vardhan, Whole-Time Director. I will hand over the call to the management for their opening remarks, post which we can open the floor for Q&A session. Yashovardhan Sinha: Thank you Aditya, from Aditya Vision. Good evening, ladies and gentlemen, and welcome to Aditya Vision Limited's Earnings Conference Call for the third quarter and nine months ended December 31, 2025. Our investor presentation has been uploaded on the stock exchanges, and we trust it has been reviewed by you by now. Before discussing Q3, it is important to briefly place the quarter in the context of the year so far. The first quarter of FY '26 was an outlier, impacted by unusually adverse weather conditions, including an extended monsoon and one of the weakest summers in several decades. This weighed on cooling-led demand across our core markets. Despite these headwinds, we delivered positive EBITDA and PAT growth in Q1 FY '26. From Q2 onwards, momentum began to normalize aided by GST rebate and festive period falling in last 10 days of Q2. Revenues recovered strongly. However, the extended monsoon resulted in a temporary shift in product mix with relatively lower contribution from high-margin cooling categories. As a result, while EBITDA and PAT continued to grow year-on-year, EBITDA margins moderated by approximately 42 basis points and PAT margins softened by around 47 basis points. Q3 FY '26 marked a clear step-up in its performance despite the quarter being challenging overall. We performed very well with revenues growing by about 28% year-over-year, aided by strong festive demand with the festive period from day 1 of Durga Puja to the last day of Chhath Puja registering 37% growth, out of which first 10 days fell in Q2. EBITDA

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recorded 14% year-on-year growth in absolute terms with EBITDA margins remaining broadly stable on a sequential basis. Profit before tax before exceptional items grew by 21% year-on-year. However, PBT margins moderated by approximately 33 basis points, primarily due to higher operating expenses, that too primarily because of marketing and promotional activities taken -- carried out in UP in stores like in bigger cities like Lucknow and other store big cities. And this led to higher operating expenses related to store yet to mature. PAT grew by 18% year-on-year, excluding an exceptional expense of INR 1.5 crores on account of additional provisioning pursuant to implementation of new labor codes with PAT margins moderating by around 38 basis points compared to last year. Demand trends during the quarter were mixed. October witnessed a strong festive-led demand, translating into healthy footfalls. November and December saw some moderation once the festive season got over, but this was meaningfully offset by a strong recovery in late December, supported by improved customer sentiment. From a balance sheet perspective, inventory levels are moderately higher, primarily because OEMs offered attractive discounts on room air conditioners following changes in BEE energy efficiency norms, and we opportunistically built some inventory to position us well ahead of the upcoming summer season. Overall, inventory level remains well controlled and broadly stable. Store expansion continued in a disciplined cluster-led manner. During the quarter, we added 4 new stores, taking total store additions in nine months FY '26 to 17 stores and keeping us on track to cross the milestone of 200 operational stores by FY '26 and more. At the core of Aditya Vision is 26 years of consistent execution, geographical dominance and a long-term approach to value creation. While the year began with challenges, the improving trajectory from Q2 through Q3 enforces our confidence in the resilience of our business model and long growth runway ahead. With that, I will now hand over the floor to Mrs. Yosham Vardhan to take you through the financial highlights of the quarter. Over to you, Yosham. Yosham Vardhan: Thank you, sir. Good evening, ladies and gentlemen. We are pleased to present the robust financial performance for Q3 FY '26 and the nine months FY '26. Here is a summary of our financial achievements. For the nine months ended FY '26, revenue surged by 15% from INR1,773 crores in nine months FY '25 to INR2,047 crores in nine months FY '26. Gross margins were maintained at 15%, with EBITDA reaching INR177 crores,

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Aditya Vision Limited

is the current inventory, if you can point out? And secondly, what was the additional discount that we were able to get. Yashovardhan Sinha: Thank you, Aniruddha. Category-wise growth, as you said, that the washing machine category did very well with more than 30%, growing by more than 30%, very closely followed by panel televisions also by 30%. As you know, AC grew by -- in this quarter, it grew by 22%. However, for nine months, it grew by only 2%. And as far as mobile is concerned, it grew by 20%. This is how the categories moved. And coming to your second question, AC, of course, we did, in fact, stock down a lot of ACs, whatever we could get because it was beneficial for the company. And the exact amount will not be proper for me to tell you. But then yes, we have got a sizable number of ACs stocked. Aniruddha Joshi: Okay. Sure, sir. And outlook for mobile and laptop considering the memory chip issue across the globe. Yashovardhan Sinha: I will say that it won't come down any -- it won't be significant. Of course, prices will be going up by around -- we expect that it will go up by 4% to 6% from January onwards. But despite that, demand is very robust, and I do not think that it is going to come down. Aniruddha Joshi: And availability from the brands is not an issue, means... Yashovardhan Sinha: Not an issue. Absolutely not an issue as of now. Aniruddha Joshi: Okay. Sure, sir. So that's very helpful. And lastly, the store count, do you see we reaching to 200 or we should be crossing 200 by end of this year? Yashovardhan Sinha: We'll be definitely crossing 200 stores by end of this financial year, but if not more, I'll say. But as you know, we always remain conservative in our guidance. The 200 is definitely on, but we will be -- we hope that we will be bettering on it. Aniruddha Joshi: Sure, sir. Last question from my side. There is a higher other expenditure as a percent of net sales in this quarter. So is it related to more store openings or any one-offs there? Or any other item if you can highlight. Yashovardhan Sinha: Some are onetime also. As you know that this quarter, we were mostly opening in Lucknow -- I mean, in Uttar Pradesh, bigger stores. So our opex was higher. And of course, we're entering into new areas, so our marketing and promotional costs were much higher. These are onetime expenses, but it gives us a lot of depth in market for other places where we are deciding to go.

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The next question is from the line of Yash Sonthaliya from Edelweiss Public Alternatives. Yash Sonthaliya: First, following up on the previous participant's question. So on the other expense part, like -- for last two years, our other expense as a percentage of revenue has increased. So should we see this quarter margins or other expense as a percentage of revenue structural? Or what should be the consistent number, excluding one-off for the quarter? Yashovardhan Sinha: Actually, this quarter, you also book bonuses for the employees. So this quarter will definitely remain inflated. But I don't think that it will be similar in quarters to come. Yash Sonthaliya: No, I'm talking Y-o-Y. Like last year, Q3 FY '25, we saw 55% growth and this year also 60% growth. Yashovardhan Sinha: Right. Operating cost is bound to go up with the additions of stores. We have opened more than 30 stores during this period. So this is the reason opex goes up and salary expenses will also go up. Similarly, our incentives, when you drive sales, actually, we were not having a good Q1. So we concentrated on driving sales. So for that, we needed a lot of incentives to pay and promotional activities were taken, which is giving us a very good result as far as top line is concerned. Yash Sonthaliya: Got it. Got it. It means it is nothing to worry about our longer-term fiscal year margins. It should remain in line. Yashovardhan Sinha: I think going forward, the market is now behaving very well. And I think it will more than offset whatever operating costs will come because of huge increase in top line. Yash Sonthaliya: Got it. Got it, sir. And my second question is on -- we announced our ambition to expand in MP, Chhattisgarh. So what led us to prepone our plan to expand in these cities? Is this something strategically we are getting something or it was always planned for this year? Yashovardhan Sinha: It was always planned. I have been giving this guidance since last, I think, many quarters that we'll be entering Chhattisgarh and later MP. So in this calendar year, we'll be sure to enter to both the states, if not before. Maybe in Chhattisgarh, we may enter in this financial year. And -- but broadly speaking, the entire current year -- calendar year, we will definitely present in Chhattisgarh and MP. Yash Sonthaliya: Got it. Got it. And sir, last question on the similar lines, like entering this new state, does it change our long-term or our store expansion guidance? Or are we reducing some expansion in UP and those stores will be opened in this state?

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Aditya Vision Limited

be there in another 15 cities. And with more and more stores because there are larger cities will require a number of stores in a single city. Onkar Ghugardare: Okay. So these states are similar to like what Bihar and UP are like, I mean, behavioral- wise, how the pattern is for spending. Yashovardhan Sinha: This is the whole idea of this vision with this geographical advantage; we are working on it. We are continuing in our Hindi heartland where it is much better to, in fact, open new stores and aligning your employees to the policies of the company. So yes, we are very comfortable moving in this geography. Onkar Ghugardare: So maybe in the next two, three years, you can see like more and more stores coming from MP and Chhattisgarh or that is too early to say. Yashovardhan Sinha: No, not more. I will say that all three states are going to grow in number of stores. Onkar Ghugardare: All three states, you mean the existing states or the new two ones you... Yashovardhan Sinha: No. I'll say that Bihar will not have that number of -- similarly Jharkhand will also have very limited insignificant number of stores, whatever it is right now. But UP gives you a tremendous potential and opportunity to expand because of its -- we are just now touching -- knocking at Western UP, which is a hugely populated and very wealthier segment of society is there. Onkar Ghugardare: So, the most of the growth will be coming from UP and the 2 new states which you will be entering. Yashovardhan Sinha: I beg your pardon? Onkar Ghugardare: So, I'm asking most of the new growth, which will be coming from Uttar Pradesh and the two new states you will be entering, right, in the upcoming years. Yashovardhan Sinha: You will find that we are only present in 24 districts of UP compared to 75 districts, which is present in UP. So, a lot of scope is there. Onkar Ghugardare: Okay. You did a fundraise last time, like I just wanted to know you are comfortable with that or like you would be raising some funds or that is not required currently? Yashovardhan Sinha: No. With our internal accruals and small bank, I think bank lending is sufficient for us to cater to -- let us say, in near future, there won't be any requirement of funds. Onkar Ghugardare: Even if you have to build up the inventory level, you are not -- you don't require that kind of money.

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Aditya Vision Limited

So these things require little promotional expenses, marketing expenses, but then it is very easy for us to overcome it. Because again, by figure also, you can understand that we are -- we have been gaining a lot of ground in new states -- new areas. Like now this time, it is around 26% of volume has come from these two states in Q3. So this is itself presents a good picture of how we are dealing with our competitor. Pradyumna Choudhary: And unit economics remains similar in the UP towns. Yashovardhan Sinha: It is a common thing that if you go to Lucknow, these are very big cities, of course, it will be -- rent will be higher. But then it is offset by the basket of branches you add. So overall increase is limited. Pradyumna Choudhary: Understood. And my last question, sir, if you could just -- like if we look at our mature stores, which are stores which are at least three years old, over there, what sort of growth are we seeing in terms of same-store growth for those mature stores? Yashovardhan Sinha: We take -- in fact, we take all these stores, which do not classify it like matured and nonmatured because we -- maybe we take a -we give a guidance that in three years, they are going to mature, but there are so many branches which gets profitable from the very first quarter of opening. So it is all about averaging it out and that we are -- we have grown by 17% SSSG in Q3, but it was only 5% for the entire nine months because of our bad Q1. Pradyumna Choudhary: The idea behind asking this particular question is so that we are able to make out like on a more steady basis, how -- like what sort of a growth does the store have like once the initial maturity is completed. That's why I was asking. Yashovardhan Sinha: You should think -- overall growth, I told you that because of Q1 being a total washout quarter for us, the biggest quarter. So this year, you are saying this is strain. But considering that next year, everything will be normal. So we are going to accelerate our higher levels -- very high level. Moderator: The next question is from the line of Aliasgar Shakir from Motilal Oswal Mutual Fund. Aliasgar Shakir: This is Ali from Motilal. Sir, just first, if you can share what was the SSSG we achieved this quarter? Yashovardhan Sinha: 17% SSSG. Aliasgar Shakir: Okay. So, with such a strong SSSG, I understand you mentioned that your margin is impacted because of the new store that you have opened, I think, in new geographies. But despite that, if you have such a strong SSSG of 17%, shouldn't that would have driven operating leverage and therefore, be able to maintain your margin? I'm just trying to

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understand the margin which is contracted, what has led to this significant impact. Yashovardhan Sinha: You will have to understand one thing, Ali, that we -- recently in the last 6 months only or 8 months only, we have started opening stores in Lucknow and all that. So these -- and Q1 was total washout. Second, Q2 was also not very good because Q1 spilled into Q2 also. But however, from -- after the GST cut, things became much better. So these things are now stabilizing, I'll say, in a gradual way. Now that -- and market has been quite good, as I have already said, the market has been quite good from December onwards. And still it is -- in January, also sales are very robust. So I think it is going to do much better. And whatever we have seen, that is things of past. Aliasgar Shakir: Got it. So I think what you're saying is that the stores, which are new regions are taking slightly longer to, I think, stabilize or achieve breakeven or maybe reach your state. Yashovardhan Sinha: Yes, because of Q1, I've been telling you because Q1 was a very bad Q1. So of course, even the new stores, they could not do that big business, which normally all branches do. Aliasgar Shakir: But I'm just talking about Q3, not Q1. Q2, they also have not achieved. Yashovardhan Sinha: No. In Q3, they are achieving. So then only we have reached to 27% of top line. Aliasgar Shakir: Yes. But the margin is lower, which implies that the new store may be would be pulling up the margin. Yashovardhan Sinha: Now that the entire year is -- the Q1 was not good. So what should we do as management. We have to drive sales and try to achieve at least -- we are trying very hard to achieve 20%, at least 20% growth, if possible, in this financial year. So we have been spending a bit more in this exceptional financial year. Aliasgar Shakir: So sir, what is the -- I mean, average time that new stores are taking for breakeven versus your historical average in the existing regions? I mean, how different is the new regions breakeven? Yashovardhan Sinha: We have been guiding actually all the stores, they at least become profitable between 6 months to 18 months. Aliasgar Shakir: But the new regions are taking slightly longer, right? Yashovardhan Sinha: It's not that. I told you that because of bad Q1, a lot of branches faced adverse situation this year. From now, it is thing of past. This is what I'm trying to tell you that, yes, we already had a bad quarter. I mean, in decades, we had one of the worst quarters because of

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a certain season. But we expect that things will be -- it is just normal. We don't want any harsh summer or anything. Even things are normal, then it's quite good for us. It will be good for us. Aliasgar Shakir: Got it. So, the new regions where you're opening stores, that should not incrementally pull down your margin, right? And if you can just share what is the margin that we are guiding EBITDA margin year on? I mean, should it come down to the base that we have seen in Q3? Or we should be able to maintain the margin upwards of 9%. Yashovardhan Sinha: We entirely see nine month EBITDA, it is 8.7%. So it is very marginally lower than last year. So what we have done now in Q4 also, what I said that let's see, January had been very good for us. And we're expecting similar numbers for coming months also in this quarter, in the current quarter. So I think whatever will be, it will be within our guidance, which we gave for EBITDA. Aliasgar Shakir: Got it. And just last question is on the number of store addition. So you mentioned that incrementally, your new stores will be in UP, MP and Chhattisgarh, right? So what is the annual store guidance? And between these 3, should one assume 10 stores each in each region or it will be UP and MP-heavy more? Yashovardhan Sinha: We have been looking into Chhattisgarh and MP. And we told you that we'll be definitely, if not in this financial year, with this calendar year, we'll be definitely present in a lot of cities in Chhattisgarh and a few cities of Madhya Pradesh. So this is what I think. So overall, we always give a guidance of 30 stores being opened in a year. And till now, we have bettered every year. Let's see how it goes, but we gave a guidance of 30 stores only. Moderator: The next question is from the line of Manoj Gori from Equirus Capital. Manoj Gori: I have just one question. So in the initial remarks, you did highlight that there was a few attractive schemes. Yashovardhan Sinha: Manoj, can you speak louder, please? Manoj Gori: Is it better now. Yashovardhan Sinha: Yes, it is good. Manoj Gori: Yes. So sir, in the initial remarks, you highlighted that you've got some better schemes for room air conditioners and accordingly, you plan for higher inventories and you stocked up the material. Just want to understand that Q1 obviously is a very favorable base. But based on your planning and probably whatever your analysis would be from the past and for the future, what kind of growth should we expect in FY '27 and more specifically for Q1 of

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FY '27, that would help relatively better from a modeling point of view? Yashovardhan Sinha: Very difficult for us to say, except that we definitely give a guidance of 20% to 25%, but we have been bettering this guidance always. And we expect that with pent-up demand for last year, Q1, the Q1 of next financial year should be absolutely very good. So this is what we are aiming at. And accordingly, we are accumulating our inventories also. So right now, we are sitting on inventories of pre-BEE. And later on in this quarter, we'll be accumulating inventories of opposed post-BEE products also, which will be around 5% to 7% costlier. Manoj Gori: Correct. Sir, I will be repeating one more question. Probably you answered it in a more qualitative manner. If I look at the markets today, let's say, Bihar, which is our core market. So based on your current store count, you would have definitely identified areas in the market and probably you would be aware like what could be our long-term store counts in Bihar market itself. Similarly, for UP also, you would have done some analysis. And probably from a region to region, you would be definitely looking at from an opportunity point of view in terms of market side. Yashovardhan Sinha: Actually, you can always understand that we are already having 117 stores in Bihar. So addition of new stores in Bihar will be very, very, say, strategic. Strategic in the sense that only at such places where we need to fortify our place, there only we are going to go there, Bihar. Similarly in Jharkhand. Jharkhand, we have already almost covered in Jharkhand, all districts, except for one or two. So we are looking to open in those districts also, which we have so far not present in Jharkhand. And in UP, but you should understand that out of 75 districts, we are just present in 24 districts. So we are just -- we have covered one-third of UP. So many stores definitely in time to come, more and more stores are going to come up in UP, again, strategically, now that we have covered almost Central UP, we are moving towards Western UP. So things will be definitely different again. They're a very good market we are getting. And we expect to enhance our store count in UP. Similarly, in Chhattisgarh and Madhya Pradesh also, we expect very good business because of, again, a lot of disposable income is there. But that -- nobody -- our competitors there, nobody are promoting their brand in such a way, which is like Aditya Vision. So we expect that we are going to have edge.

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