Bihar-based electronics retail chain Aditya Vision is the talk of the town today. Ace investor Ashish Kacholia picked a 0.83 percent stake in the company via open market transactions on December 9, which sent the stock surging by 5 percent hitting a market cap of Rs 2000 crore.
The rally continued into December 12 with the stock up 3.4 percent at 12 pm on the BSE. After the market opened, it was up 11 percent at the day’s high of Rs 1,845 apiece. For the year so far, it has gained 172 percent.
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The company, which retails consumer durables and electronics in the Hindi heartland of Bihar and Jharkhand, currently has 91 stores against 79 stores at the end of FY22. It houses brands such as LG, Sony and Samsung in its brick-and-mortar stores.
“We have opened 12 new stores in this fiscal so far, and 6 more are under construction at the moment. This reflects our commitment to provide a world class shopping experience to our consumers and to deepen our retail presence in our targeted markets,” Yashovardhan Sinha, managing director, Aditya Vision said after the company’s Q2FY23 results.
The consumer electronics market still remains under-penetrated in India, especially in Tier 3 and Tier 4 cities. “We see immense growth potential and strong demand due to massive improvement in power situation,” Sinha added.
In the half year ended September 2022, the company also managed to double its cash and cash equivalents. In April, cash and cash equivalents stood at Rs 28.71 crore, and at the end of September, it was Rs 59.40 crore.
The company’s goal is to reach 150 store count by FY2025. The stock trades at a trailing twelve-month P/E of 35.8, which is significantly lower than the sector P/E of 64.42.
In 2016, this SME IPO was listed on BSE at Rs 15 and since then the stock has seen a meteoric rise. It hit the Rs 1000 mark this year after reporting 3x rise in profit after tax in Q1FY23 at Rs 26.7 crore from Rs 8 crore in the year-ago period. The counter has high promoter holding at 70 percent and its free float market cap is only Rs 453 crore.
While not many analysts and brokerages have coverage on the stock, Ventura Securities noted in a report dated September that “The total debt of company increased to Rs 115 crore in FY22, but the impact of the same was mitigated by generation of free cash flow. Debt to equity ratio stands at 1.1x.”
It expects Aditya Vision’s revenue growing at a CAGR of 34.9 percent over FY22-25.
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