In this investment presentation, we explore the Indian consumer electronics retail industry with a focus on Aditya Vision, a fast-growing retailer founded in 1999 with a presence in the Hindi heartland region.
You can view the full presentation below.
Executive Summary
The past few years have been promising for India’s economy, with rapid economic growth, improved access to consumer financing, further investments in its infrastructure (PMAY-U) and broader economic modernisation.
While its equity markets trades at fairly expensive multiples, we believe there are still pockets of long-term opportunities with one being Aditya Vision, a consumer electronics physical retailer focused on India’s Hindi Heartland region.
Founded in 1999, Aditya Vision has over 110+ stores with a 50%+ market share in its core market, Bihar, India and has expanded rapidly into new markets like Uttar Pradesh and Jharkhand.
Aditya Vision has organically grown revenue (29% CAGR) and operating profits (54% CAGR) over the past 10 years due to its focus on low prices & range, customer service (Aditya Seva & Surakhsa) and strong relationships with OEMs.
Aditya Vision has never closed a single store and has championed the “creeping cluster retail approach”. While the arrival and growth of Reliance Digital and Amazon is inevitable, we believe its brand, store positioning and growth and customer knowledge creates some competitive advantages over pure-play e-commerce players and national retailers.
Aditya Vision trades at a rich forward multiple of 30x earnings. However, we believe its long term potential of above 25% net income growth driven by continued store growth and entry into Chhattisgarh and West Bengal justifies its high multiples.
