Aditya Infotech builds surveillance lead through AI products and supply-chain resilience

Investment View and Industry Outlook

Motilal Oswal Financial Services, in its October 13, 2026 company update on Aditya Infotech, reiterates its BUY rating. The broker's view is based on CP PLUS's scale, supply-chain resilience, technology investments and expanding addressable market.

Motilal Oswal expects Aditya Infotech to strengthen its leadership in India's structurally underpenetrated surveillance market, where CP PLUS holds more than 43.3 per cent share. Key industry growth drivers include:

• Urbanisation and infrastructure expenditure.
• Migration from analogue to IP cameras.
• Adoption of artificial intelligence.
• Replacement demand.

Higher Standardisation Testing and Quality Certification requirements are also raising entry barriers and favouring scaled, compliant manufacturers.

Supply-Chain Resilience and Component Sourcing

Motilal Oswal considers component sourcing a key industry constraint but a relative competitive advantage for Aditya Infotech. System-on-chips, image sensors, memory and networking chips are mainly imported, with system-on-chips accounting for around 25-35 per cent of camera bill of materials.

Global demand from artificial intelligence and data centres has tightened memory availability and increased DRAM and NAND prices. This could pressure margins in the price-sensitive CCTV market. CP PLUS has diversified non-Chinese sourcing across suppliers including Ambarella, Qualcomm, Augentix, Innofusion, Novatek and Realtek, while sensor suppliers include Sony, SmartSens and SOI.

At around 10-15 times the scale of domestic peers, Aditya Infotech has greater purchasing power, inventory-carrying capacity and working-capital flexibility.

Vision Chip Partnership and Technology Platform

The partnership with L&T Semiconductor Technologies is another strategic lever. The parties are co-developing an India-designed Vision system-on-chip for CCTV and IP cameras. Aditya Infotech plans to manufacture around 9 million IP cameras over three years using this chip.

Motilal Oswal believes the initiative could reduce imported-chip dependence, improve supply resilience and support greater customisation of artificial intelligence-enabled cameras and video analytics. Conversely, component availability, foreign-exchange exposure and sharp memory-price inflation remain risks, particularly where cost pass-through is difficult.

The broker also highlights Aditya Infotech's shift from surveillance hardware towards a technology-led security platform. Research and development centres in Noida, Ahmedabad and Taiwan, along with a planned Bengaluru centre, are focused on artificial intelligence analytics, edge computing, embedded software, silicon, firmware, video analytics and compression.

The Taiwan centre has supported the CP PLUS Pro series for high-end government and enterprise customers, while Qualcomm-supported AI video-security solutions are under trials. CP PLUS serves residential and small and medium enterprise users through to government, infrastructure and enterprise projects across a broad range of price points. IP products accounted for around 73 per cent of the product mix, positioning the company for IP migration and premiumisation.

Growth Optionality and Addressable Market

Future growth optionality includes machine vision, industrial autonomous mobile robots, smart-home products such as smart locks, video doorbells and door phones, and drone cameras. The broker estimates these categories could expand Aditya Infotech's addressable market from around US$2 billion to US$3-3.5 billion or more.

International expansion is an additional potential growth lever, although it depends on successful scaling of export operations.

Financial Estimates and Valuation

Motilal Oswal estimates revenue, EBITDA and PAT compound annual growth of 37 per cent, 47 per cent and 51 per cent, respectively, over FY26-29E. Its financial estimates are summarised below:

The broker values Aditya Infotech at 50 times FY29E earnings per share and derives a target price of Rs 5,390.