Aditya Infotech shares jump 4% on Rs 1,500 crore QIP; Buy stock, says MOFSL

Shares of Aditya Infotech Ltd climbed 4 per cent in Thursday's trade after  the company board approved Rs 1,500 crore in fundraise via QIP. The stock also gained as MOFSL initiated coverage on the stock with a 'Buy' rating and a target of Rs 4,200.

Following the developments, the stock rose 3.55 per cent to hit a high of Rs 3,425 on BSE.

In its note on Aditya Infotech, MOFSL said the company has emerged as the pioneer in the rapidly growing video surveillance market in India. Aditya Infotech, through its well-regarded brand “CP Plus”, has 1,000 distributors and 2,500 system integrators and operates as the third-largest Closed Circuit Television (CCTV) manufacturer in the world. Aditya Infotech commands more than 44 per cent market share in the video surveillance market, it said.

"Aditya Infotech is well-positioned to benefit from a demand surge in the video surveillance market. The market is valued at INR106b as of FY25 and is expected to grow to 227b by FY30E, driven by the imminent need to enhance security. Further, the implementation of Standardization Testing and Quality Certificate (STQC) norms for CCTVs has unlocked a humongous growth opportunity," MOFSL said.

Hence, MOFSL noted that the market share is projected to expand from 44 per cent to over 58 per cent by FY28, as Aditya Infotech's revenue is likely to post a 44 per cent CAGR over FY26-28E.

This, MOFSL said, represents a notable outperformance vs. the industry, which is likely to clock a 16-18 per cent CAGR over the same period.

"This growth will be aided by robust volume growth and improvement in realization due to the imminent price hikes and evolution of the product mix towards higher-value products," it said.

MOFSL said Aditya Infotech may deliver a stellar revenue, Ebitda and PAT growth of 44 per cent, 58 per cent and 64 per cent, compounded annually, over FY26-FY28, owing to strong industry tailwinds and expansion in market share.

"The company’s share is likely to grow due to its strong brand image and a slowdown in competitive intensity post-STQC norms. Aditya Infotech's Ebitda margin is also expected to improve. We initiate coverage on the stock with a BUY rating and a target of Rs 4,200," MOFSL said.