Target: ₹3,800CMP: ₹3,643.65Aditya Infotech (AIL), through its CP PLUS brand, is India’s leading surveillance player with over 40 per cent market share. Its vertically-integrated business model is supported by a large domestic manufacturing footprint, over 54 STQC-certified IP camera models and an extensive distribution network. STQC norms, localisation and backward integration favour compliant domestic manufacturers, positioning AIL to benefit from lower dependence on Chinese imports + substitution, stronger supply-chain control and margin expansion.AIL delivered a revenue/EBITDA/PAT CAGR of about 23 per cent/52 per cent/48 per cent over FY23-26. We forecast about 36 per cent/45 per cent/47 per cent CAGR over FY26-29E, driven by a richer CP PLUS (own-brand) mix, localisation and operating leverage, lifting EBITDA margins from about 8 per cent in FY25 to about 16 per cent by FY29E. Pre-tax RoCE is expected to improve from about 38.6 per cent in FY26 to about 41.1 per cent by FY28E, supporting a premium valuation.We expect AIL to deliver robust earnings growth driven by market share gains, premiumisation and operating leverage. However, following the sharp post-listing rerating and with competition likely to intensify as more players secure STQC approvals, we believe the risk-reward is balanced. However, with much of the operating upside already priced in, we initiate coverage with Add and a September 2027 TP of ₹3,800 (45x September 2028 EPS).Published on July 9, 2026