How a ban on Chinese chips made CP Plus India's biggest CCTV brand

In September, Aditya Infotech, the company behind CP Plus cameras, raised ₹1,500 crore by selling 43.27 lakh new shares to institutions at ₹3,467 each. Nine investors took ₹993 crore of it: Aditya Birla Sun Life, Kotak, ICICI Prudential, Axis, HSBC and Invesco mutual funds, HDFC Life, BlackRock's India fund and Malaysia's Employees Provident Fund. The money arrives as the company comes out of the best year in its history, built on a rule change that removed most of its competition.

What the company does

Aditya Infotech sells CCTV cameras, video recorders and the accessories that go with them under the CP Plus brand, best known for its "upar wala sab dekh raha hai" advertising. The Khemka family runs it; Aditya Khemka is managing director, and the promoter group held 71.8% at September-end. The company started as a distributor of security products and still carries a small distribution business for other brands, but CP Plus now makes up about 87% of revenue.

The cameras are made at Kadapa in Andhra Pradesh, which management describes as the third-largest CCTV factory in the world, with capacity of about 2.5 million units a month. The plant ran for nearly eight years as a joint venture with Dixon Technologies until Aditya Infotech bought out Dixon's share in September 2024; Dixon separately holds 2.29% of Aditya Infotech. Products reach buyers through more than 800 distributors in over 500 cities, system integrators who install larger projects, and 141 exclusive CP Plus stores.

The customer base is broad. Management says homes and small and medium businesses make up about 60% of the Indian market, while government projects account for 15–20% of its own revenue. Consumer purchases are still less than 10% of the business, so most demand comes from commercial buyers rather than households.

The rule that changed the market

Before 2025, the Indian CCTV market was split roughly into thirds, according to management: Chinese brands, Indian brands, and an unorganised and global-brand segment. CP Plus held about 30% overall, 25% under its own brand. From 9 April 2025, CCTV cameras sold in India had to meet new government security requirements: they had to pass cyber-security testing and could no longer use Chinese chips or memory. Old stock could still be sold until 31 March 2026; after that, it could not.

CP Plus had prepared. It had already moved its cameras to chips from non-Chinese suppliers, including Ambarella, Qualcomm, Novatek and Realtek, with sensors from Sony and others, and had more of its parts made in India. When the rules took effect, it had the widest range of certified products in the market while many rivals were still waiting for certification. Its market share rose from 31.4% in April–June 2025 to 38.9% in July–September and 45.4% in October–December, and was 43.3% for the full year, according to an industry report management cites. At the IPO in July 2025, management had projected that its own-brand share could reach about 36%.

The first quarter under the new rules was disrupted by certification backlogs and supply gaps, and management says overall market demand was muted in FY26 while the industry changed over. CP Plus grew by taking share. FY26 revenue rose 35.6% to ₹4,221 crore, and management estimates that about 18–20 percentage points of that came from higher volumes, with the rest from higher prices and a richer mix of products.

Why profit grew much faster than sales

Profit rose far more than revenue. FY26 EBITDA, operating profit before interest, tax, depreciation and amortisation, more than doubled from ₹258 crore to ₹579 crore, and adjusted net profit rose from ₹138 crore to ₹368 crore. Gross margin went from 21.5% to 28.8%.

Three things drove the margin. CP Plus, which earns more than the third-party brands the company distributes, rose to 86–87% of revenue. Within CP Plus, the share of IP cameras, the higher-value networked kind, rose from about 70% to 79% by April–June 2026. And finance costs fell after the company repaid debt with its IPO proceeds. In the March quarter, cheaper inventory bought before chip prices rose added further, which management called a one-off; it says 14–15% is the new normal EBITDA margin.

The quarters show the climb. Revenue went from ₹740 crore in April–June 2025 to ₹1,422 crore in January–March 2026, and was ₹1,402 crore in April–June 2026, up 89.5% from a year earlier. Net profit in that latest quarter was ₹142 crore, more than four times the ₹33 crore a year before.

The distribution business is shrinking. Aditya Infotech was the exclusive Indian distributor of Dahua, a Chinese brand that, with CP Plus and Hikvision, was one of the three largest in the country. Under the new rules, Dahua sales fell away. Management said in February that they were down to ₹10–15 crore a month and would be under ₹100–150 crore in FY27, "just like a feeder thing".

What management expects next

Management raised its FY27 guidance twice. In February it expected revenue of ₹5,350–5,550 crore; in May it raised that to ₹6,000–6,500 crore (₹6,250 crore at the midpoint), roughly 50% growth, with EBITDA margins of 14–15% and net margins of 8.5–9.5%. In August it kept that guidance after April–June, and said the first quarter is usually 18–20% of the year's revenue.

The growth is meant to come about half from volumes and half from prices. Management expects the industry to grow 15–16% in units and CP Plus to grow 25–30%. Average prices are expected to rise about 25%, partly from mix and partly from price increases. The price increases are not a choice: memory and chip costs have risen sharply as global manufacturers shift capacity to AI data-centre memory, and several have stopped making the older DDR3 memory used in cameras. The company is passing costs on monthly rather than in one jump, and had raised prices 10–20% depending on the product by August. That passing-on comes with a lag, so margins can trail costs for a while.

Management argues that the shortage helps the largest buyer. It books chips and memory three to four quarters ahead, sometimes with advance payments, and says smaller rivals are struggling to get supply.

The factory is nearly full

In August, Kadapa was running at 85–90% of its 2.5 million units a month. Management plans to roughly double capacity over three years: first by expanding at Kadapa on land being acquired next to the existing plant, then with a second manufacturing cluster in Greater Noida. It is also bringing more parts in-house: a plant for camera housings and enclosures (planned capacity of 30 million a year) due to start by the December quarter, a lens assembly line, and a cable joint venture with Orient Cables in Rajasthan due to start production by the end of FY27. Management says these will add to margins mainly from FY28, without giving a figure.

New products are in development: a CP Plus Pro range from its Taiwan R&D centre for large enterprise and government projects, home products such as video door phones and smart locks, and early work on machine-vision and drone cameras. Two cheaper brands, Nexivue and Eyra, are meant to cover price points below CP Plus; management thinks they could reach 7–10% of revenue over the years. According to management, exports are 18–24 months away from significant numbers.

Profit has not yet turned into cash

This is the weakest part of the picture. FY26 net profit was ₹368 crore, but operating cash flow was ₹13.5 crore, down from ₹27.2 crore the year before. Growth soaked up the cash: money owed by customers rose by ₹382 crore to ₹1,404 crore, and inventory rose by ₹237 crore to ₹1,104 crore. Customers typically get two and a half to three months to pay. The company also paid chip suppliers faster to secure supply, which lengthened its cash cycle from 67 days to 78. Capital spending was ₹136 crore.

The balance sheet itself is light on debt, after IPO money repaid most borrowings. At March-end, borrowings were ₹113 crore, down from ₹413 crore, plus ₹76 crore of supplier credit. Cash was about ₹165 crore, including ₹42.5 crore of cheques in hand, with another ₹34 crore in bank deposits. Debt was 0.07 times equity in June. The company's long-term credit rating was assigned at A with a Stable outlook in April 2026.

The June quarter was better: the cash cycle fell to 64 days, with customers paying in 93 days, against 123 a year earlier. Whether that holds through a year of rising chip prices and advance payments is one of the clearer tests of the business.

The money, and what it is for

The raise opened on 22 September and closed on 25 September, managed by ICICI Securities and IIFL Capital. The company sold 43,26,507 new shares at ₹3,467 each to institutions only. Nine investors took more than 5% of the issue each, ₹993 crore between them; seven of them are Indian, putting in about ₹800 crore. The rest of the issue, about ₹507 crore, went to institutions that took less than 5% each.

In shares, the four largest mutual fund houses took 3,60,542 each; HSBC, Invesco, HDFC Life and BlackRock 2,88,433 each; and Malaysia's provident fund 2,66,801. Each mutual fund house's figure combines several of its schemes. Aditya Birla Sun Life bought through seven, including its multi-asset, small-cap and mid-cap funds; ICICI Prudential through seven, led by its large and mid-cap and multi-cap funds; Axis through five, led by its mid-cap and small-cap funds; Kotak mostly through its mid-cap fund; HSBC through its mid-cap and large and mid-cap funds; and Invesco through its focused fund. BlackRock's investment came through BlackRock Global Funds' India Fund, and Malaysia's Employees Provident Fund (EPF) invested through Nomura Asset Management Malaysia. Put together, Indian mutual funds took 46.7% of the issue, foreign funds 12.8% and HDFC Life 6.67%, with the remaining 33.8% spread across smaller allottees.

The raise was a change of plan. In May, management said its ₹200–300 crore of planned FY27 capital spending would be paid for from internal cash and some debt. Four months later it raised ₹1,500 crore at ₹3,467 a share, a 5% discount to the minimum price set by the pricing formula. The shareholder approval allowed the money to be used to repay borrowings, for capital spending at the company and its subsidiaries, for working capital, and for acquisitions and other strategic investments, without fixing amounts for each. A credit rating agency will report on how it is used every quarter.

Read with the cash flow, the raise gives the company room to fund working capital for 40–50% growth, the capacity doubling and the advance payments for chips without borrowing. Management has also said it is looking at selective acquisitions to add technology and products, and is hiring a head of mergers and acquisitions.

The risks

Competition is the first. Management says more than 40 brands are now certified to sell under the new rules. It argues most are a tenth of CP Plus's size or smaller and that none covers every segment from homes to government, but the gap it enjoyed while rivals waited for certification will narrow as they scale up. About a dozen global brands hold roughly 10% of the market, mostly in enterprise projects.

The rule itself is a policy, and policies can change. Asked about this in August, management said CCTV is a priority sector for the government and it sees no sign of a change.

Supply and costs are the second. Chip and memory prices are expected to keep rising until 2027, management said in May, and contracts are being renegotiated as suppliers' costs move. The company hedges 85–100% of its foreign-currency exposure, but about 35% of its bill of materials is imported chips, and another 15–20% is electronic parts from Taiwan and China. If price increases slow demand, the entry-level end of the market is where it would show first.

Then there are specific items. The company disputes ₹39 crore of customs demands, including a ₹31 crore January 2026 order on 4G routers that it has appealed after paying ₹6 crore under protest, and ₹35 crore of GST demands. A fire at the Kadapa plant on 9 September 2026 caused an estimated ₹28 crore loss, which is insured. Goodwill of ₹535 crore from the AIL Dixon buyout sits on the balance sheet and is tested for impairment each year. The auditor's FY26 opinion was unmodified. The managing director's pay was ₹31.9 crore in FY26, up from ₹22 crore.

Who owns it

The promoter group's stake fell from 74.71% in June to 71.8% in September. The family sold no shares; its stake was diluted by the new shares issued in the raise.

Valuation

At the 23 October close of ₹3,798, about 10% above the issue price, the company's equity was worth about ₹46,600 crore. That is about 98 times net profit for the latest four quarters (₹477 crore) and about 24 times March book value of roughly ₹159 per share, before the ₹1,500 crore raise added to the book.

The multiple shows how much growth is already expected. FY27 guidance implies another year of 40–50% revenue growth, and the July–September results, due in November, will be the first quarter after the raise. The next questions are whether CP Plus holds its share as rivals catch up, whether prices keep pace with chip costs, and whether profit starts arriving as cash.

1. 1
   Market share

   Whether CP Plus holds around 43% as more certified rivals scale up

2. 2
   Prices and margins

   How fast chip and memory costs are passed on, against the 14–15% EBITDA margin guidance

3. 3
   FY27 guidance

   Revenue against ₹6,000–6,500 crore, with July–September results due in November

4. 4
   Capacity

   Progress on Kadapa expansion, Greater Noida, housings, lenses and cables

5. 5
   Working capital

   Inventory, customer payment days and advance payments to chip suppliers