Aditya Infotech Q4 FY26 Results (NSE: CPPLUS)
Signal: Margin expansion
The read
Q4FY26 delivered the fourth consecutive quarter of margin expansion — OPM surged 800bps YoY to 18.2%, driven by both a 610bps gross margin tailwind (raw material cost deflation + mix shift) and operating leverage (employee cost grew only 16% vs revenue 45%). Revenue growth accelerated to 45.5% YoY, the fastest in the series. Full-year PAT of ₹368 Cr was 144% higher but diluted EPS declined 3% due to IPO equity issuance — a one-time effect. Working capital absorption remains heavy: receivables days rose to ~90 and inventory days to ~71, consuming operating cash flow. The IPO proceeds have been partly deployed to reduce borrowings (full-year finance cost down 28% despite higher working capital debt).
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹1,422.03 Cr | 45.49% | 24.77% |
| EBIT | ₹227.92 Cr | 207.73% | |
| Net profit | ₹169.13 Cr | 186.6% | |
| EPS | ₹14.37 | 186.6% | |
| EBIT margin | 18.16% |
P&L walk
Revenue growth accelerated to 45.5% YoY; gross margin expanded ~610bps YoY as raw material cost % fell to 68.1% from 74.2% — mix shift to higher-value products and input cost tailwinds; employee cost grew 16% vs revenue 45% — operating leverage; EBITDA margin jumped 800bps to 18.2% — both input cost tailwind and operating leverage; PAT grew 186.6% YoY, tracking EBITDA growth of 162%.
Key positives
- Revenue growth accelerated to 45.5% YoY — best in the 8-quarter series, topping prior quarter's 37.2% growth.
- OPM expanded 800bps YoY to 18.2% — 4th consecutive quarter of margin expansion from 6% in Q1FY25.
- Gross margin tailwind of 610bps — raw material cost % dropped to 68.1% vs 74.2% a year ago.
- Operating leverage: employee costs grew only 16% vs revenue 45% — fixed cost base absorbing higher volumes.
- PAT of ₹169 Cr grew 186.6% YoY, driven by operating performance (not one-offs).
- Full-year revenue crossed ₹4,221 Cr (+35.5% YoY) — scale doubling trajectory.
Key concerns
- Full-year diluted EPS fell 3% YoY despite 144% PAT growth — IPO dilution of 7.4mn shares and ESOPs; RoE will compress until incremental capital earns returns.
- Working capital stretched: receivables days ~90 (+14 days YoY), inventory days ~71 (+11 days); CFO of ₹135 Cr trailing full-year PAT of ₹368 Cr.
- Net debt rose to ~₹964 Cr from ~₹412 Cr YoY — largely working capital funded, but leverage is increasing even after IPO equity raise.
Research and educational content only. Not investment advice.