CP PLUS: 89% growth priced at 85 times earnings

Aditya Infotech Limited (NSE: CPPLUS), which sells cameras under the CP PLUS brand, grew Q1 FY27 revenue 89.5% to ₹1,402 crore. The stock trades at around 85 times earnings. What happened Adjusted profit rose 332.5% to ₹142.2 crore. EBITDA more than tripled to ₹208 crore, taking margin to 14.8% from 8.8%. Finance costs fell 59%. Gross margin was 30.8% and the cash conversion cycle improved to 64 days. The CP PLUS brand is 87% of revenue, and IP cameras are 79% of that brand. Why it matters New rules require CCTV sold in India to be tested and certified locally. That pushed buyers away from imported cameras towards approved domestic supply. Its share of the Indian video surveillance market is now 43.3%. My view Understand what drove the quarter. A rule change moved share from importers to local makers. That is a one time shift in who gets the order, not a permanent 89% growth rate. Once that share has moved, growth slows to whatever the market itself grows at. Management is telling you the same thing. FY27 revenue guidance of ₹6,000 to ₹6,500 crore implies growth of 42% to 54%, not 89%. Guided profit margin of 8.5% to 9.5% is below the 10.1% just delivered. Run the math. At the middle of guidance, FY27 profit is near ₹560 crore. Against a market value of ₹39,691 crore, that is still about 71 times. You are paying a perfection price for a good, fast growing business. What I am watching Q2 FY27 results, due in November, the EBITDA margin staying inside 14% to 15%, and chip input costs. On the chart, ₹4,094 is the high and ₹3,000 is the level that matters. My stance: Avoid at this price. Revisit near ₹3,000, or after two quarters of guidance being met. Disclosure: I do not hold a position in Aditya Infotech Limited at the time of writing. This is not investment advice.