Motilal Oswal initiated coverage with a “buy” rating and a price target of ₹4,200 on Aditya Infotech, implying an upside potential of 27% from Wednesday’s closing levels.
As per the company’s bull case, the stock could go up to as high as ₹5,066, which means the upside potential goes up to 53%.
Motilal Oswal sees strong surveillance market opportunity
Motilal Oswal said Aditya Infotech is well positioned to benefit from the expected growth in India’s video surveillance market, where the company holds a market share of more than 44%.
The brokerage expects India’s surveillance market to more than double from ₹106 billion in financial year 2025 to ₹227 billion by financial year 2030. It also expects Aditya Infotech’s revenue to grow at a 44% compound annual growth rate (CAGR) between FY26 and FY28, significantly ahead of the industry’s estimated 16% – 18% growth.
Standardisation Testing and Quality Certification (STQC) norms could also reduce competition and help the company increase its market share to more than 58% by financial year 2028, according to Motilal Oswal.
The brokerage expects the company to deliver revenue, EBITDA and profit after tax growth of 44%, 58% and 64%, respectively, over FY26-FY28. It also highlighted backward integration into lenses, cables, plastics and metal components as a potential driver of cost efficiency and margins.
Company approves ₹1,500 crore fundraise
Separately, the company’s board on August 19 approved a proposal to raise up to ₹1,500 crore through the issuance of equity shares. The fundraise could be undertaken through one or more permissible routes, including a public issue or a qualified institutional placement (QIP), or a combination of these methods.The proposed fundraise is subject to shareholder and other regulatory approvals. The company will seek shareholder approval through a postal ballot and has also constituted a board committee to deal with matters related to the proposed issue.The company has also scheduled one-on-one and group meetings with institutional investors in Mumbai from August 24 to 26 and in Singapore from September 1 to 3, according to an August 19 exchange filing.
Margin guidance
Following its June-quarter results, Aditya Infotech reiterated its Earnings Before Interest, Tax, Depreciation and amortisation (EBITDA) margin guidance of 14-15% for FY27, against an EBITDA margin of 14.5% in Q1FY27.
Management indicated that it would reassess the outlook after the first half of FY27, while continuing to internally target performance above the stated guidance.
Analyst view on Aditya Infotech
IIFL Institutional Equities also remains constructive on Aditya Infotech, with Senior Vice President–Research Renu Baid Pugalia saying the company has built a strong position in India’s IP camera market. She highlighted its localisation of a large part of the camera value chain and said the company has an 18-24 month head start over domestic peers, which it is using to expand into premium products for enterprise and government customers.
She expects Aditya Infotech to deliver 40-45% revenue CAGR, with margins holding around 14.5-15%, translating into 45-50% earnings growth over the next two years. She also cited the exit of Chinese players following new government certification requirements as a factor supporting the company’s growth outlook.
The stock is a “consensus buy” with all seven analysts tracking the stock staying bullish on it.
Shares of Aditya Infotech are now trading 4% higher on Thursday at ₹3,432.2. The stock has already risen 125% so far this year.
