Release Date: November 12, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Aditya Vision Ltd (BOM:540205, Financial) reported a strong financial performance in a typically weak quarter, with a year-on-year revenue growth of 20.03% in Q2 FY25.
- The company successfully opened six new stores during the quarter, expanding its presence in Bihar, Jharkhand, and Uttar Pradesh, bringing the total store count to 156.
- Aditya Vision Ltd (BOM:540205) completed a stock split in a 10 to 1 ratio, enhancing liquidity and trading options for investors.
- The company is on track to add 25 to 30 stores in the current financial year, aiming to reach around 200 stores by FY26.
- Despite challenges such as heavy rainfall and flooding, the company achieved good revenue and profit growth, demonstrating resilience in adverse conditions.
Negative Points
- Q2 is a seasonally weaker quarter for Aditya Vision Ltd (BOM:540205) due to the monsoon period, impacting sales.
- The company's inventory levels are on the higher side due to pre-stocking for the festive season, which could pose a risk if sales do not meet expectations.
- There is a noted decline in Average Selling Price (ASP) due to a drop in prices across several product categories, including air conditioners and refrigerators.
- The company faces increased competition from other brands, which could impact margins and market share.
- There is uncertainty regarding future market behavior, particularly in the upcoming festive and wedding seasons, which could affect financial performance.
Q & A Highlights
Q: Can you provide an outlook on the trends in Q3, especially considering the festive season?
A: We are optimistic about Q3 as most weddings are lined up in this quarter, which should result in a strong performance. (Respondent: Unidentified_3)
Q: How is the competition from brands like Voltas and Haier affecting your pricing and margins?
A: Increased competition allows us to derive better margins. The presence of multiple companies in the market is beneficial for us. (Respondent: Unidentified_3)
Q: Are there any challenges in consumer financing similar to those in the automobile sector?
A: In consumer durables, financing is very aggressive with more competition, unlike the automobile sector. (Respondent: Unidentified_3)
Q: Why has depreciation increased by more than 50% year-over-year despite a 20-25% increase in store count?
A: The increase is due to the application of amortization under new accounting standards. (Respondent: Unidentified_3)
Q: What is your strategy regarding online sales, given the growth in e-commerce?
A: Currently, we are not focusing on online sales as our market prefers in-store purchases. We believe this trend will continue in our operating regions. (Respondent: Unidentified_3)
Q: How are you performing in new geographies like Jharkhand and Uttar Pradesh?
A: We have captured around 60% market share in Jharkhand and 15% in Uttar Pradesh within two years of operation. (Respondent: Unidentified_3)
Q: What is your outlook on ASP (Average Selling Price) considering the premiumization trend?
A: ASP has dipped by 1.3% due to price drops in several categories, but we are hopeful that new premium products will improve ASP going forward. (Respondent: Unidentified_3)
Q: How is the penetration of air conditioners in your market, and what is the potential for growth?
A: The penetration level is extremely low, around 2%, indicating significant growth potential. Financing options are encouraging more consumers to opt for air conditioners. (Respondent: Unidentified_3)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
