Aditya Infotech Limited, known for its video security and surveillance products under the brand name CP Plus, saw massive investment inflow from mutual fund houses as promoters offloaded stake in the company.

Hari Khemka Business Family Trust offloaded 1.5% stake of the company, while Mr. Rishi Khemka dropped 0.5% stake as of 25 February 2025.

However, it is not just the promoters who diluted stake in Aditya Infotech, but Dixon Technologies Ltd., which held 6.2% stake in the company, sold 3.8% stake in a block deal on the same date.

Having said that, the Aditya Infotech stock price went up from ₹1,474.5 on 24 February to ₹1,575.7 on 25 February, the day on which these sale transactions happened. The reason being mutual funds are buying the stock at a rapid pace.

Kotak Mahindra Mutual Fund and Motilal Oswal Mutual Fund are two of the largest buyers who bought 0.97% stake each via block deals, investing ₹179.9 crore each. They also bought 0.64% stake and 0.58% stake, respectively, via bulk deals. The deals are worth ₹118.7 crore and ₹107.7 crore, respectively.

Apart from Kotak and Motilal, there was HDFC Life Insurance Company Ltd. and Axis Mutual Fund buying shares of Aditya Infotech worth ₹40.5 crore each.

Even foreign institutional investors (FIIs) invested in the stock via a block deal on the same day. Abu Dhabi Investment Authority Stable purchased shares worth ₹25 crore.

Other names include –

The great hand-off: Why institutions are buying what promoters are selling

This increased interest from the mutual fund houses and other institutional investors seems more interesting when promoters and significant stakeholders like Dixon Tech are selling the stock. Let’s find the rationale.

Aditya Infotech: Powering India’s surveillance market

Aditya Infotech is the leader when it comes to surveillance products. It holds a 38.9% market share in the video surveillance industry in India and is the largest manufacturer of surveillance products with a comprehensive portfolio of end-to-end solutions and 3rd largest in the world.

In terms of brand value, CP Plus is ranked as the top video security and surveillance brand across Asia.

Strategic collaborations

Aditya Infotech has collaborated with Qualcomm, which is one of the leading semiconductor and technology giants, for developing AI-led video intelligence products in India. With this collaboration, CP Plus products are expected to have better security features, enhanced privacy, real-time alerts, and other such significant features.

Both companies are coming together to reach more customers in the nooks and corners of India and build leadership in the video-intelligence industry.

CP Plus has also entered into a joint venture with Orient Cables for manufacturing coaxial and network cables under the CP Plus Brand.

The big bet: Quadrupling lens assembly by 2027

Mutual Funds are infusing money into this surveillance giant, perhaps due to its aggressive capacity expansion plans. The company has already started construction of a Housing and Enclosure Plant in January 2026 in Kadapa, Andhra Pradesh.

This housing plant will have a capacity of producing 25 million plastic housings and 5 million metal housings. The company expects Phase-I to be operational by Q2FY27 and Phase II by Q4FY27.

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The lens assembly capacity is also expected to expand up to 3 lakh units per month by Q1FY27 and by the end of FY27 up to 10 lakh units per month.

The overall production capacity during Q3FY26 stood at 1.8 million in a month, which is anticipated to go up to 2.4 million units monthly by H1FY27.

Currently, the company has 12 Surface Mount Technology (SMT) lines and 42 False Alert Lines, and it is planning to add 2 SMT and 5 FA lines to its portfolio.

Furthermore, the company is launching its NEXIVUE Security Solutions range, which will offer next-gen innovation, 2 MP to 8 MP cameras, with dual light technology, advanced encoding, built-in mic and speaker, motorized lens, up to 4k recording capability, and more.

Navigating Industry headwinds 

The global semiconductor and memory supply is disrupted due to shortages of SoCs (system on a chip), DRAM (Dynamic Random Access Memory), and sensors. However, Aditya Infotech, with its multi-SoC product strategy and collaboration with multiple suppliers, is well placed to navigate the supply chain shortages.

It also has a multi-supply chain procurement strategy with the secondary supply sources and the authorised disruptors.

The company has long-term procurement agreements with these suppliers, which help them secure long-term production plans and supplies.

138% adjusted growth: Decoding the EBITDA Surge

Sales during 9MFY26 grew by 31% YoY from ₹2,134 crore in 9MFY25 to ₹2,799 crore. Earnings before interest, tax, depreciation, and amortisation (EBITDA) grew from ₹159.9 crore to ₹320.6 crore, logging a whopping 100.5% YoY growth. 

However, profit after tax and exceptional items dropped by 32.9% YoY from ₹296.4 crore to ₹198.9 crore during the period.

Having said that, there was an exceptional item (net of deferred tax) worth ₹212.1 crore, which was adjusted with the profit during 9MFY25, and thus the adjusted profit after tax for the period was ₹83.1 crore, which, if compared to the profit of 9MFY26, is a 138.6% YoY rise.

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Coming to the return on capital employed (ROCE), it is at 19.5%, which is slightly higher than the industry median of 17.1%.

Valuation

The stock is trading at a price/earnings (PE) of 77.2x, which is way higher than the industry median of 27.4x.

Similarly, the price/earnings to growth (PEG) ratio is also higher at 4.2x, compared to the industry median of just 0.5x. Both PE and PEG suggest that, even adjusted for growth, the stock is overvalued.

6-month Share Price Chart of Aditya Infotech Ltd.

Final Thoughts

So, there are multiple factors that perhaps led to the current buying in Aditya Infotech, especially by the domestic institutional investors, including the mutual fund houses.

From strong fundamentals to strategic partnerships and, most importantly, deploying risk mitigation strategies to tackle the industry-specific challenges, this surveillance giant is doing it all.

As the company is scaling up rapidly, it would be interesting to see whether these institutional buyers hold on to the stock or exit their position, and for that, you can add the stock to your watchlist for now.

We have relied on data from www.Screener.in throughout this article. Only in cases where the data was not available have we used an alternate, but widely used and accepted source of information. 

The purpose of this article is only to share interesting charts, data points, and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educational purposes only. 

Maumita Mitra is a seasoned writer specializing in demystifying the world of investment for a broad audience. She has a keen eye for detail and a knack for explaining complex financial concepts in the simplest manner possible. 

Disclosure: The writer and her dependents do not hold the stocks discussed in this article. 

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