Aditya Infotech Ltd Management Discussions

Economic Overview Global Economy

The global economy unfolded against a backdrop of heightened geopolitical uncertainty evolving trade dynamics and uneven economic recovery across major regions. These shifting conditions triggered widespread volatility in energy and global commodity markets including the electronic value chain.

In 2025, the global economy registered a growth of 3.4%, supported by robust private investment and moderating inflationary pressure. Economic performance, however, remained uneven across regions with emerging markets and developing economies (EMDEs) expanding by 4.4% significantly outpacing the 1.9% growth recorded by advanced economies. A relatively weaker US dollar and synchronised global monetary policies facilitated steady capital flows and supported demand across developing regions.

Global inflation moderated to 4.1% during the year as energy prices and global supply chains faced increasing pressures towards the end. The continued proliferation of trade tariffs and protectionist measures continued to reshape global trade dynamics. In response to rising input costs and supply chain vulnerabilities businesses increasingly diversified sourcing strategies towards alternative low-cost manufacturing hubs to secure competitively priced raw materials and improve supply chain resilience.

Global Economic Outlook

Global trade growth is expected to moderate as supply chain realignments stabilise and the lagged impact of tariffs begins to affect retail pricing. Meanwhile, persistent geopolitical tensions necessitate businesses to remain agile, emphasising regionalised supply chains and diverse sourcing strategies to mitigate risk.

Investment in artificial intelligence (AI) is expected to remain a dominant trend, driven by its proven ability to enhance operational efficiency. Industries across sectors are accelerating the adoption of AI-led solutions for process automation inventory management and demand forecasting to optimise cost controls. Furthermore, supportive fiscal policies and ongoing logistics infrastructure upgrades across developed economies are expected to accelerate the broad-based adoption of these advanced technologies.

Following the imposition of higher trade barriers and heightened uncertainty in the previous year, global activity now faces a significant challenge from the conflict in the Middle East. Global growth is projected to decelerate to 3.1% in 2026, contingent upon the duration and extent of the ongoing hostilities. Although the conflict appears to be nearing an end, it will take considerable time for disrupted supply chains to stabilise.

Global headline inflation is projected to rise to 4.4% in 2026 before resuming its decline in 2027. A slowdown in growth and an increase in inflation are expected to be particularly pronounced in emerging market and developing economies. Inflation expectations have prompted central banks to tighten financial conditions.

Downside risks dominate the outlook. A prolonged or more extensive conflict, a worsening of geopolitical fragmentation, a reassessment of expectations surrounding artificial intelligence-driven productivity or renewed trade tensions could significantly weaken growth and destabilise financial markets. Elevated public debt and eroding institutional credibility further increase vulnerabilities. In contrast, activity could be lifted if productivity gains from AI materialise more rapidly or trade tensions ease on a sustained basis.

Indian Economy²

India remained the fastest-growing major economy among large global economies, delivering a GDP growth of 7.7%. In FY2025-26, the nation continued to demonstrate remarkable economic resilience amid a challenging global environment. Moderation in inflation, particularly within the food sector, enabled the Reserve Bank of India to adopt a more accommodative stance. A cumulative rate cut of 100 basis points brought the policy rate down to 5.25%, significantly enhancing credit availability and market liquidity.

The manufacturing sector remained a primary driver of economic growth. Purchasing Managers Index (PMI) data indicated consistent expansion supported by strong order books and higher productivity. Industrial activity experienced broad-based recovery, particularly across the automotive, mining and basic metals sectors.

On the demand side, private consumption expanded by over 7%, driven by improved rural demand and strategic policy measures such as GST rationalisation which stimulated spending across urban centres.

Structural initiatives to strengthen the nations innovation framework also gained momentum. The governments Research Development and Innovation (RDI) scheme, supported by a ^1 lakh crore outlay, continues to incentivise private sector involvement in high-tech manufacturing and advanced technological research.

Global headwinds have emerged from the ongoing crisis in the Middle East and West Asia which has become a significant source of global economic uncertainty. Escalating tensions in the region have disrupted key trade corridors heightened energy security concerns and contributed to volatility in global oil and gas prices.

These developments have raised input and logistics costs across industries, putting pressure on inflation and business confidence worldwide. The resulting uncertainty has affected investment sentiment and global trade flows, prompting international institutions to adopt a more cautious outlook on global economic growth in the near term. Businesses are now prioritising investments that deliver tangible operational efficiencies and long-term value creation.

Indian Economic Outlook

India is projected to sustain its growth momentum, supported by sustained manufacturing activity and structural reforms which provide resilience against external uncertainties. Its projected growth rate of 6.6% in FY2026-27 is the fastest among all major economies. The countrys growth trajectory is supported by robust domestic demand, sustained public infrastructure

investments rapid digital transformation and increasing formalisation of the economy.

Infrastructure development remains central to the Governments long-term economic strategy. The Union Budget for FY 2026-27 has allocated ^12.22 lakh crore for capital expenditure, representing an 11.5% increase over the previous fiscal, to support long-term economic capacity and expansion.

To strengthen domestic demand in the short term, several policy measures have been implemented, including tax relieffor the middle class, GST rationalisation and enhanced support for the agricultural sector. Additionally, targeted incentives for the MSME industry have been introduced to further reinforce economic stability and growth.

The outlook for international trade remains favourable, supported by ongoing and proposed free trade agreements with regions such as the European Union and New Zealand. These partnerships are expected to create new opportunities for Indian exporters and attract foreign direct investment into high-growth sectors, particularly electronics and advanced technology manufacturing.

Indias strong economic fundamentals, policy reforms, infrastructure-led development and digital transformation initiatives provide a favourable backdrop for long-term business growth and investment opportunities.

Indian GDP Growth Trend

muudiiy vvcivicvv

Global Video Surveillance and Security Market³

The global video surveillance market is valued at US$35.9 billion in Fiscal 2025, according to Frost & Sullivan. This is driven by technological advancements and rising security concerns across various sectors. The market encompasses hardware such as cameras and recorders and software solutions including video management and analytics.

The global video surveillance market comprises a wide range of hardware and software solutions including IP cameras analogue cameras hybrid cameras network video recorders (NVRs) digital video recorders (DVRs) and cloud-based surveillance platforms. These systems are deployed across diverse end-use segments including commercial industrial residential governmental retail and infrastructure applications.

The industry is also witnessing a transition towards integrated security architectures that combine video feeds with access control and alarm systems into a single management platform. This enables control across multiple geographical locations. Additionally, there is the adoption of intelligent camera solutions with some inbuilt analytics or AI capabilities.

Key Growth Drivers

Urban Infrastructure Expansion

Sustained infrastructure development is driving a global market expansion, particularly in the Asia-Pacific region. Government-led smart city initiatives are integrating large- scale camera networks into unified public safety grids.

Technological Progress

Advancements in artificial intelligence (AI) and the Internet of Things (IoT) are enabling modern surveillance systems to deliver real-time monitoring and automated threat detection capabilities.

Government Actions

Policy-driven initiatives are accelerating the deployment of city-wide surveillance networks alongside AI for managing incidents and traffic.

Data-driven Decision-Making

Companies are increasingly investing in technologies such as facial recognition and behaviour analysis to enhance safety and operational efficiency. The adoption of edge- based AI and 5G connectivity enables localised data processing, reduces latency and allows for instantaneous, data-driven decision-making across global operations.

The industry is expected to expand at a compound annual growth rate (CAGR) of 10.36% between Fiscal 2025 and Fiscal 2030, reflecting strong and sustained demand worldwide.

Region	FY 2025 Revenue	FY 2030 Revenue	Revenue CAGR (25-30)	FY 2025 Volume	FY 2030 Volume	Volume CAGR (25-30)
USA	8.8	13.3	8.66%	271.7	361.6	5.88%
Europe	8.7	14.2	10.31%	270.3	387.8	7.49%
China	7.4	11.9	10.00%	228.3	323.0	7.19%
India	1.3	2.7	16.46%	39.7	74.6	13.50%
Rest of APAC	3.0	6.1	15.49%	92.1	166.2	12.53%

Frost & Sullivan Report

Indian Video Surveillance and Security Market⁴

The Indian video surveillance market is witnessing considerable growth, driven by increasing security requirements and rapid technological advancements. The market was valued at $ 4.40 billion in 2025. The Indian video surveillance and security market is expected to grow at 16-17% CAGR.

The introduction of stricter certification and testing requirements under Standardisation Testing and Quality Certification (STQC) Directorate, along with the exclusion of certain non-compliant players, has led to a fundamental reset of the competitive landscape, with increased emphasis on trusted, secure, and compliant solutions.

Recent regulatory measures governing the supply of critical components for CCTV systems, particularly those with potential cybersecurity vulnerabilities, represent a significant policy intervention by the Government of India and a structural positive for the domestic surveillance industry.

From an industry standpoint, Chinese brands earlier accounted for a meaningful share of the Indian CCTV market and their gradual exit has led to a shift in demand towards compliant domestic brands. As per recent estimates, Indian manufacturers now command majority of the share of the market with some unorganised players also entering the industry as there has been a structural vacuum created in the market due to lack of STQC certified products, reflecting a sharp change in market dynamics. The unorganised players will eventually consolidate once more Indian players come up with additional capacities in the market thus absorbing off the structural vacuum.

Key Growth Drivers

The industry is driven by several factors, including the Smart Cities Mission of the government is increasing the demand for surveillance in cities. The initiative supports

Urban Mobility Solutions

• This segment includes intelligent traffic management systems, adaptive signalling and electric vehicle (EV) infrastructure.

• Initiatives such as FASTag implementation are improving traffic flow, reducing congestion and supporting long-term sustainability.

Digital India

• The initiative focuses on expanding digital infrastructure and strengthening e-governance across urban centres.

• Enhanced connectivity is enabling more efficient governance and improved delivery of public services.

Smart Policing and Security

• Public safety and crime prevention are being strengthened through integrated command centres and extensive CCTV networks.

• Increasing adoption of data-driven policing is enabling proactive security management and faster incident response.

In addition, regulatory requirements mandating the installation of CCTV cameras in banks, ATM centres and educational institutions are further supporting sectoral growth. Declining costs of IP cameras are also accelerating the transition from traditional analogue systems to advanced digital surveillance solutions.

India CCTV Installations

City	Population (2025)	Number of CCTV Cameras	Number of cameras per 1,000 people
Delhi	34.7M	313,332	9.04
Mumbai	22.1M	82,390	3.73
Kolkata	15.8M	13,335	0.84
Bangalore	14.4M	585,284	40.66
Chennai	12.3M	106,576	8.64
Hyderabad	11.3M	900,000	79.38
Ahmedabad	9.1M	21,036	2.32
Surat	8.6M	7,833	0.91
Pune	7.5M	52,065	6.92
Jaipur	4.4M	2,589	0.59
Kozhikode	4.4M	1,416	0.32
Lucknow	4.1M	27,245	6.59
Thrissur	3.7M	325	0.09
Kochi	3.6M	23,966	6.65
Indore	3.5M	251,500	72.21
Kanpur	3.3M	5,815	1.74

Source: Comparitech

Hardware continues to dominate the video surveillance market, accounting for over 62% market share in 2025. In contrast, Video-Surveillance-as-a-Service (VSaaS) is the fastest-growing segment, registering a CAGR of 11.19%. IP-based solutions lead the technology landscape, comprising nearly 55% of all deployments.

While on-premises data storage remains prevalent due to data sovereignty legislation, cloud-based storage solutions are steadily gaining momentum. The Indian video surveillance market is projected to expand to $ 7.77 billion by 2031, reflecting a CAGR of 9.94%.

Government Initiatives Make in India

The Government of India continues to prioritise the development of the domestic electronics sector through the Make in India initiative. The programme focuses on attracting investment, strengthening infrastructure and fostering innovation to position India as a global manufacturing hub. Complementary state-level initiatives further promote this goal by promoting self-reliance and indigenous capabilities within the industry.

New PLI Scheme for Electronic Components

In March 2025, the Union Cabinet approved a dedicated ^22,919 crore PLI scheme focused specifically on electronic components, sub-assemblies and capital equipment. This initiative complements existing programmes by strengthening the domestic manufacturing ecosystem for both active and passive components critical to the electronics value chain.

Modified Electronics Manufacturing Clusters (EMC 2.0)

The EMC 2.0 scheme provides financial incentives of ^3,762 Crore to develop world-class infrastructure and common facilities for manufacturers. These clusters are expected to attract approximately ^209.10 billion in investment and create over 50,000 jobs once operational. By funding essential services such as power plants and internal roads, the scheme creates a conducive environment for modern surveillance and CCTV manufacturing units.

India Semiconductor Mission

Launched in 2021 under the Ministry of Electronics and Information Technology, this initiative has an outlay of

^76,000 crore to establish a sustainable semiconductor and display ecosystem in India. It supports startups with design tools promotes indigenous intellectual property and emphasises collaborative research and skill development to strengthen Indias position in semiconductor design and manufacturing.

Mandatory STQC Certification for CCTV Cameras in India

The Standardisation Testing and Quality Certification (STQC) Directorate mandates that all CCTV cameras sold in India after 9 April 2025 must comply with certification standards. This ensures adherence to international quality and security benchmarks enhancing product reliability and safeguarding user privacy.

At the state and institutional level, several initiatives are accelerating the adoption of advanced surveillance technologies. Punjab is integrating AI-enabled CCTV surveillance biometric identification, Radio Frequency Identification (RFID) tracking and video conferencing capabilities for court production, thereby enhancing transparency, accountability, and security.

AI-powered traffic surveillance systems in cities such as Chandigarh and Pimpri Chinchwad are transforming road safety using Automatic Number Plate Recognition and real-time analytics. Similarly, Delhi Police have undertaken modernisation initiatives by integrating CCTV surveillance systems and body-worn camera systems into their operations. Indian Railways is also planning to install CCTV Cameras across all 74,000 coaches and 15,000 locomotives to improve passenger safety.

In addition, the Ministry of Electronics and IT issued the Digital Personal Data Protection Rules Act in 2025, establishing a citizen-centric and innovation-friendly

framework for safeguarding digital personal data. The One Nation, One Challan initiative is further transforming traffic management by integrating CCTV-based monitoring with centralised databases such as VAHAN and SARATHI, enabling efficient enforcement and streamlined verification processes.

Company Overview

Aditya Infotech Ltd., through its flagship brand CP PLUS, is the leading Indian-owned player in the security and surveillance industry. Established in 1995, the company has built a strong presence in the Indian video surveillance market through its extensive distribution network, integrated operations and broad product portfolio.

The Company operates 50 branch offices and 54 returns merchandise authorisation (RMA) centres across India. It has one of the largest security solutions workforces in the country comprising 1,399 employees, with presence across 500+ cities.

Aditya Infotech has established a strong distribution and channel ecosystem, supported by over 800 distributors across Tier I, Tier II and Tier III cities, along with over 1800+ system integrators. This extensive network strengthens the Companys pan-India reach and market presence within the video surveillance ecosystem.

In alignment with the Government of Indias Make in India initiative, CP PLUS operates advanced manufacturing facilities in Kadapa Andhra Pradesh. During FY26, the Company produced 24 million units. Major segments of its product portfolio have also received STQC certification, reflecting adherence to stringent standards of quality, reliability, and security.

Product and Solution Portfolio

CP PLUS offers a comprehensive suite of security technologies designed for diverse operational requirements, including

c Professional Range	y Consumer Range	- r Surveillance Aligned Products -A. J
AI Network Cameras	Smart Wi-Fi Cameras	PoE Network Switches
NVRs	Dash Cam	DVR/NVR Racks
ANPR Cameras	Wi-Fi Doorbell	Cables
Mobile NVR	Micro SD Cards	SMPS Power Supplies
Thermal Solution	Video Door Phones
Body Worn Cameras	4G/5G Routers
Interactive Display

The Company provides tailored surveillance and integrated security solutions across a wide array of sectors, including Government: Smart cities, law enforcement, traffic management and transportation.

Commercial and Retail: Banking, hospitality, retail and building management.

Industrial: Specialised monitoring for industrial facilities and complex environments.

Home: Residential, end home consumer & gated communities

Business Overview

For the purpose of market sizing, the video surveillance market comprises surveillance cameras, including both analogue and IP cameras, video recorders such as Digital Video Recorders (DVRs) and Network Video Recorders (NVRs), and associated surveillance software.

The market definition excludes adjacent solution categories such as video storage infrastructure, video analytics platforms, and Video Management Systems (VMS) when these are supplied independently by third- party providers. Such solutions may be integrated through partnerships with camera manufacturers or procured separately by end customers and, therefore, are not included within the defined video surveillance market size.

The Company reported strong growth momentum in FY26, with overall revenues growing in the higher double digits, while the market share growing from 20.2% in FY25 to 43.3% in FY26.

The CCTV cameras business in India

Camera Types: CCTV cameras are broadly divided into two major categories which are IP & Analog cameras.

IP cameras

IP (Internet Protocol) cameras are network-based devices that capture and transmit video in digital form via Ethernet or wireless connections. They support higher resolutions, often HD or 4K, and allow remote access and centralised management through video management software. Many models incorporate intelligent features such as motion detection, facial recognition, or people counting, making them more scalable and versatile than analog systems. IP cameras are now the dominant choice in modern surveillance deployments.

Analog Cameras

Analog cameras are traditional CCTV devices that capture video and transmit it as continuous electrical signals over coaxial cables to a digital video recorder (DVR). They are relatively low cost and straightforward to install but offer limited resolution and fewer advanced features. Their main drawbacks are restricted image clarity compared to modern systems and a lack of native remote accessibility, making them more suitable for small or budget-conscious surveillance setups.

STQC mandate in Indian CCTV Industry

The implementation of the STQC certification mandate by the Government of India, effective April 2025, has been a significant inflection point for the security and surveillance industry. Under the Ministry of Electronics and Information Technology (MeitY) regulations, all network CCTV cameras sold in India from April 9, 2025, are required to be STQC certified. This policy is aimed at ensuring that surveillance

devices meet stringent standards of quality, cybersecurity, and data privacy, while addressing the risks associated with low-cost, uncertified imports that often lack essential security safeguards.

The regulation restricted the participation of companies from land border-sharing countries in the supply of critical components for CCTV camera particularly those with potential cybersecurity vulnerabilities, which was a significant policy intervention by the Government of India and a structural positive for the domestic surveillance industry.

Shifting Market Dynamics

From an industry perspective, Chinese brands previously accounted for a significant share of the Indian CCTV market, estimated at one-third. Their gradual withdrawal has resulted in a shift in demand towards compliant domestic brands. As per recent estimates, Indian manufacturers now command the majority of the market share, reflecting a substantial change in market dynamics.

The Company was significantly better prepared for the STQC regime with its deep investments in R&D with both India and offshore R&D centres and large-scale integrated manufacturing setup, also almost 2 decades old deep- rooted supplier and customer relationships. This enabled it to capitalise on the market transition, strengthen market share, and drive deeper penetration through its extensive dealer and distribution network.

The companys growth was not solely driven by market share gains but also by a significant shift in its brand mix towards CP Plus and a transition from analogue to IP. This resulted in an increase in Average Selling Price (ASP) and greater margin accretion.

The market is broadly balanced in terms of both volume and value. The analogue segment has largely stabilised while the primary growth driver is now the IP camera category. The overall Indian surveillance market is growing at approximately 15-17% but the IP camera segment is expanding at nearly 25%+ that rate reflecting the ongoing transition from analogue to IP-based solutions.

The market is rapidly shifting towards intelligent connected surveillance solutions. With one of the industrys largest certified product portfolios and a strong position as a leading Indian brand, the company is growing significantly faster than the market, particularly in the IP segment.

Business Performance

From a segment perspective, CCTV and video surveillance continued to be the primary driver of revenues with the demand shifting from analogue cameras towards IP cameras, contributing a significant majority of the Companys overall turnover during the year under review.

The CP PLUS brand continued its strong trajectory, contributing 86% of overall AIL revenue. IP products made

up 73% of CP PLUS portfolio, underscoring the sustained shift towards higher value IP solutions.

This regulatory shift has fundamentally reshaped the competitive landscape. It has accelerated the transition towards trusted high-quality and compliant products while creating a meaningful advantage for companies with strong local manufacturing, product development and certification capabilities.

The companys recent growth momentum has been driven by its ability to anticipate industry shifts and align its strategy accordingly. It has consistently focused on building capabilities that position it advantageously in a rapidly evolving market.

A key driver has been the sustained expansion of the security and surveillance market, supported by rising demand across enterprise, government, infrastructure and residential segments. As security becomes an increasingly strategic priority, the company is well positioned to capture this growing opportunity.

Recorders

B

The Indian video surveillance recorder market (NVRs and DVRs) recorded robust volume growth in FY2026, supported by sustained demand across government, enterprise, commercial and residential sectors. The ongoing transition towards IP-based surveillance systems is accelerating NVR adoption driven by requirements for higher-resolution imaging remote accessibility scalability and integration with advanced analytics. DVRs continue to serve cost-sensitive deployment requirements.

Digital Video Recorders (DVRs) are used with analogue CCTV cameras to capture, convert and store video footage in digital format. DVR-based systems provide a cost-effective surveillance solution and remain widely deployed in small and mid-sized installations. While they offer reliable recording and monitoring capabilities their dependence on analogue infrastructure limits image resolution scalability and integration with advanced analytics. Consequently, DVRs are best suited for applications where affordability and basic surveillance functionality are the primary requirements.

Network Video Recorders (NVRs) are designed for use with IP cameras, capturing and managing digitally transmitted video over a network. As video processing occurs at the camera level, NVRs primarily facilitate storage, playback and system management. They support higher-resolution imaging, seamless remote access and integration with advanced video management and analytics platforms. Their scalability, flexibility and enhanced functionality make NVR-based systems the preferred choice for modern surveillance deployments across enterprise and large-scale applications.

Business Performance

NVRs and DVRs are typically sold as part of an integrated video surveillance solution and are therefore reported within the overall surveillance product portfolio rather than as a standalone category. Given their complementary nature to CCTV cameras revenue from recorders is generally bundled with camera sales for accounting and reporting purposes.

The recorder business delivered a healthy performance supported by sustained demand for video surveillance solutions across enterprise, government, commercial and residential segments. The continued transition towards IP- based surveillance systems also contributed to increased adoption of NVRs reinforcing the companys position across the broader surveillance ecosystem.

Software & AI Solutions

The Indian video surveillance software market, comprising video management software (VMS), analytics platforms, and related monitoring applications. These solutions enable centralized monitoring, video recording management, intelligent search, event detection, and integration with broader security and building management systems.

Market growth is being driven by the increasing adoption of IP-based surveillance infrastructure, rising demand for remote monitoring and the growing use of AI-powered analytics for applications such as perimeter protection, crowd management, traffic monitoring and operational intelligence. As organisations increasingly seek to derive actionable insights from surveillance data, software is emerging as a key value-added component of the video surveillance ecosystem.

The Company continues to expand its digital ecosystem transitioning from hardware-centric security to intelligent cloud-integrated software solutions. Its digital offerings are categorised into three core pillars.

1. CP PLUS AI Solution (CP PLUS.AI)

This segment delivers powerful AI-driven analytics that convert raw video footage into detailed actionable business and security insights. It is powered by our in-house R&D and collaboration with Qualcomm.

• Key Capabilities: AI-powered video monitoring, advanced video analytics and security and process automation.

• Value Proposition: Optimised hardware

integration with intelligent automation to enhance operational efficiency and threat detection.

2. CP PLUS Cloud Storage (ezy Kam+)

The Companys proprietary cloud infrastructure provides a seamless secure and scalable environment for remote video data management.

• Key Features: Continuous 24/7 playback

availability, highly secured data storage architectures, and cost-effective

subscription models.

• Enhanced Security: Includes specialized "Cloud Playback of Stolen Device" capabilities, ensuring data integrity and retrieval even if physical hardware is compromised or stolen.

3. CP PLUS Services

A comprehensive suite of enterprise-grade, AI-IoT based software applications designed to streamline infrastructure and workforce management.

• ONVIGIL: The flagship AI-IoT based integrated surveillance service platform.

• Health Monitoring System (HMS): A proactive software solution built to track and ensure the uptime, operational health, and connectivity of deployed security assets.

• Attendance Management System (AMS):

A cloud-enabled utility leveraging intelligent tracking to automate workforce attendance and access control.

Further expanding on this portfolio, the company collaborated with Qualcomm Technologies to develop AI- enabled video intelligence solutions for the Indian market. By combining Qualcomms edge AI capabilities with CP PLUS surveillance ecosystem, the partnership aims to enhance real-time analytics intelligent video management and actionable insights across public safety and enterprise applications. This initiative supports the companys strategy of increasing its presence in the rapidly growing AI-driven video surveillance segment.

Business Performance:

During the fiscal year, the Software & AI Solutions category remained a key focus area as the company continued to invest in enhancing its solutions. This will enable it to grow as a key pillar in its transition from a hardware-led security manufacturer to a comprehensive AIoT-and-Cloud- driven solutions ecosystem. By embedding proprietary software architectures across its customer touchpoints, the company aims to unlock recurring revenue streams increase hardware stickiness and expand its overall margin profile in the future as software and AI are the future of this industry.

Other Ancillary Areas & Strategic Distribution

Alongside its core offerings, the Company manages a highly curated portfolio of ancillary products and

strategic distribution partnerships that strengthen its market position and provide comprehensive solutions to its customers.

Ancillary Storage Offerings (Seagate)

To ensure robust end-to-end reliability for its surveillance and AIoT ecosystems, the Company continues to serve as an authorized distributor for Seagate Storage solutions.

The Company maintains a strategic distribution partnership with Seagate to complement its comprehensive security and surveillance ecosystem. As data storage remains critical components of high-performance video surveillance, Seagates industry-leading technology serves as a vital ancillary portfolio element. This partnership ensures that the Companys hardware and software solutions are supported by reliable high-capacity storage, enabling it to offer customers a turnkey end-to-end security infrastructure.

Backward Integration

To secure supply chain resilience, ensure stringent quality control and expand operating margins, the Company has aggressively pursued its backward integration strategy during the fiscal year. By transitioning key component dependencies from third-party and import channels to internal manufacturing ecosystems, the Company is structurally enhancing its cost efficiencies.

• In-House Housing & Enclosures: Phase-1 of state- of-the-art housing plant is scheduled to become operational by Q3 FY2027, with Phase-2 following in Q4 FY2027. This facility targets a peak production capacity of 30 million housings and enclosures per annum, drastically reducing reliance on external vendor ecosystems.

• Component Localization (Cables & Lenses): The

Company has entered into a JV with Orient Cables, for the production of CCTV Cables, Networking cables and camera, and recorder cables, this is also expected to start production. Additionally, it is introducing a new lens assembly line at the Kadapa facility with an initial capacity of 5 lakh lenses per month, seamlessly scalable to 1 million lenses monthly.

• Synergistic Joint Venture: The Company has entered into a strategic Joint Venture with Orient Cables to manufacture high-grade LAN and CCTV cables. A dedicated 1 lakh sq. ft. facility is currently being set up in Rajasthan, with commercial production slated to commence between Q2 and Q3 of FY2027. ^•

• Financial Impact: Moving critical components like cables, housing, and lenses in-house directly enhances product quality consistency and guarantees supply continuity. Management anticipates that the full operational efficiency and EBITDA margin expansion from these initiatives will materialize sequentially through FY2028.

Research & Development (R&D)

Innovation and product development continue to be key pillars of the Companys growth strategy. The Company operates a DSIR-approved in-house R&D lab and has established a growing research footprint across Noida, Ahmedabad, and Taiwan. Backed by a team of over 200 engineers and specialists, the R&D function is focused on developing advanced surveillance technologies, AI- enabled solutions, and next-generation security products that address evolving market needs.

The Companys strong in-house design capabilities are supported by leading semiconductor platforms, including Ambarella, Novatek, Qualcomm and LTSCs, enabling the development of differentiated, high-performance products across multiple technology architectures. A world-class hardware and software testing infrastructure further enhances product reliability, quality assurance, and speed-to-market.

The Companys technology roadmap is centred on strengthening indigenous innovation, expanding its portfolio into specialized categories such as the Pro Series and explosion-proof solutions, and broadening platform compatibility across diverse chipset ecosystems. Simultaneously, the Company is accelerating its transition from hardware-centric offerings to intelligent, software- defined AIoT ecosystems, integrating advanced analytics, automation, and connected security capabilities to deliver greater value to customers.

• Expanding the Innovation Ecosystem: Building upon core DSIR-certified in-house laboratories, the Company is significantly scaling its engineering footprint. Alongside reinforced R&D centres in Noida and Ahmedabad, the Company is establishing a new specialised tech centre in Bangalore.

• Global Footprint & Expertise: To maintain global technological parity, the Company established a strategic R&D division and office in Taiwan. It continues to aggressively recruit premier global engineering talent, injecting over 20 years of domain expertise into its product architecture teams.

• Core Technology Focus: R&D investments are prioritised in the development of advanced AI- powered video analytics, highly unified software platforms, robust mobile application frameworks and the expansion of multi-brand product lines under the CP PLUS portfolio.

Manufacturing Capabilities

The Company achieved a key milestone of 2.5 million units in current production, with a clear blueprint to double this capacity by FY2028.

• Infrastructure Footprint Expansion

• Kadapa Facility: Upgraded with an additional 50,000 sq. ft. manufacturing shed, with further land acquisition proposals underway to accommodate scalable production lines.

• Future Land Bank: Active evaluations are ongoing for land acquisitions in Northern India to future-proof long-term scaling requirements.

• Operational Flexibility via EMS: To maintain 90% to 100% capacity utilization of high-value internal assets, the Company has planned to move its mature HD analog job work to external Electronic Manufacturing Services (EMS) partners. This outsourced layout adds a flexible capacity of 0.5 million units per month, allowing internal facilities to focus sharply on high- margin, complex AIoT integrations.

Tailwinds and Headwinds Tailwinds

Regulatory Transformation & Consolidation

The implementation of stringent STQC compliance protocols acted as a powerful market-clearing event. It drove rapid market consolidation within Indias organized surveillance industry, allowing the Company to capture a commanding market share of approximately 42.4% by leveraging its certified, trusted ecosystem.

Monetizing the Edge-to-Cloud & AIoT Software Ecosystem

The transition from isolated security hardware to intelligent, recurring-revenue digital platforms represents highest-margin future catalyst.

• SaaS and Cloud Scaling: The Company is aggressively scaling subscription renewals for ezy Kam+ cloud storage and expanding the active enterprise endpoints for its specialized platforms (NVIGIL, HMS, and AMS).

• Advanced AI Commercialization: Through R&D partnerships with global intelligence platforms like Avathon, the Company is deploying edge-based Vision AI analytics directly into mass-market systems. This high-value integration enhances product stickiness, lowers customer churn, and drives incremental average selling prices (ASP).

Deepening Strategic Tech Partnerships (Indigenous SoC Development)

The Company is focusing on co-developing its core hardware intellect to establish true technological sovereignty and structural cost leadership.

• L&T Semiconductor (LTSCT) Alliance: The Company has entered into a definitive agreement with L&T Semiconductor Technologies to co-develop Indias first indigenous IP Systems-on-Chips (SoCs) equipped with advanced Vision AI. This indigenous chipset framework is planned to power 9 million CP PLUS cameras over the next three years, ensuring absolute data security compliance while drastically decoupling production from global semiconductor volatility.

• Qualcomm Partnership: Collaborative development with Qualcomm continues to act as a powerful technological differentiator, allowing us to deploy premium, next-generation processor capabilities into commercial enterprise endpoints ahead of the competition.

Multi-Brand Expansion Strategy

The targeted multi-brand retail architecture enables the Company to effectively capture displaced market volume without diluting the premium brand equity of the its flagship CP PLUS portfolio.

Mass Market Penetration via New Brands

The commercialisation of newer sub-brands, such as EYRA and NEXIVUE, serves as a powerful tactical tool to address the bottom-of-the-pyramid mass market. These brands act as a direct alternative to phased-out Chinese players, capturing high-volume retail demand while maintaining margins parallel to the Companys core lines. NEXIVUE commenced commercial shipments in April 2026 following certification approvals and has witnessed encouraging market acceptance, with additional products being rolled out to expand the portfolio and drive growth.

Deep Geographic Penetration & Retail Footprint Expansion

While maintaining market dominance in its historical strongholds, the Company is systematically unlocking fresh geographic domains.

South and West India Expansions

Distribution networks, system integrator pipelines, and field-force teams are being heavily deployed to accelerate market penetration in Southern and Western India, where its historical footprint holds significant untapped headroom. Consumer engagement strengthened significantly with the launch of new brand campaigns featuring South superstars Vijay Sethupathi and Prithviraj Sukumaran, deepening our audience across South India.

CP PLUS Galaxy Stores: The Company continue to aggressively invest in its direct-to-consumer and enterprise experience networks by expanding its exclusive CP PLUS Galaxy Stores and CP PLUS World Centres across Tier-2 and Tier-3 cities, cementing top-of-mind brand equity.

Massive Infrastructure and Asset Doubling by FY2028

Our physical capacity roadmap is structured to match the expanding order pipelines from large-scale smart cities, infrastructure projects, National Highway Authority of India (NHAI), and Indian Railways.

2X Capacity Roadmap

Supported by the upcoming 3 lakh sq. ft. facility in Sector 68, Noida (operational by Q4 FY27) and land bank additions at Kadapa, the Company is positioned to expand our current manufacturing milestone of 2.5 million units per month to double existing capacity levels by FY2028.

Targeted BOM Localization

With its internalized cable joint ventures and housing plants going live sequentially through FY2027, the Company aims to localise over 50% of its Bill of Materials (BOM) cost, transforming production scale into permanent operational leverage.

Market Headwinds

While domestic and operational momentum remains exceptional, the global macroeconomic environment presented notable challenges that required agile strategic management.

Global Semiconductor & Component Pressures

The global memory and semiconductor industries experienced significant disruptions driven by manufacturing constraints and supply-demand imbalances. Critical components—including SoCs, DDR, Flash memory, and advanced sensors—remained under persistent supply pressure, causing extended manufacturing lead times.

Mitigation Strategy: To de-risk supply chain, The Company successfully instituted a multi-SoC product architecture alongside a highly diversified multi-supply chain procurement framework. This approach eliminated single-source dependency and ensured uninterrupted manufacturing continuity.

Geopolitical Volatility & Escalating Supply Chain Costs

Sustained geopolitical instabilities in the Middle East introduced acute operational pressures, causing a sharp inflation in global insurance premiums and ocean freight costs.

Mitigation Strategy: The Company aggressively fast- tracked its infrastructure roadmap to buffer against global freight shocks. This includes the localized deployment of its upcoming 30-million-capacity housing and enclosure plant (Phase-1 live by Q2 FY27) and a scalable lens assembly line in Kadapa. Moving these operations in-house systematically insulates the Companys cost structures from international freight volatility moving forward.

Financial Performance

Particulars	FY 2025	FY 2026
Total Revenue	31,229.26	42,336.52
EBITDA	2,58.88	5,789.74
EBITDA%	8.27	13.68
PAT	3,513.69	3,679.61
PAT%	4.43	8.69

Key Financial Ratios

Particulars	FY 2025	FY 2026	Deviation	Reason for Deviation
Current ratio (times)	1.13	1.53	35.4%	Variance in ratio is attributable to increase in current assets during the financial year vis-avis current liabilities.
Debt-Equity Ratio (times)	0.41	0.06	-85.4%	Variance in ratio is attributable to repayment of outstanding working capital demand loans during the year out of IPO proceeds
Debt Service Coverage ratio (times)	0.62	8.90	1335.5%	Variance in ratio is attributable to a significant reduction in interest expense, driven by lower outstanding borrowings during the current year
Return on Equity ratio (%)	19.18	25.42	32.5%	Variance in ratio is attributable to the increase in revenue particularly from high margin products during the current year resulting in increase in average shareholder equity
Inventory Turnover ratio (times)	0.28	0.26	-7.1%	NA
Trade Receivable Turnover Ratio (times)	0.33	0.33	0.0%	NA
Trade Payable Turnover Ratio (times)	0.43	0.38	-11.6%	NA
Net Capital Turnover Ratio (times)	11.85	4.00	-66.2%	Variance in ratio is attributable to proportionate increase in revenue being lower than proportionate increase in working capital during the year
Net Profit ratio (%)	4.43	8.69	96.2%	Variance in ratio is attributable to the increase in revenue particularly from high margin products, reduction in interest expense due to repayment of the borrowings
Return on Capital Employed (%)	20.11	30.58	52.1%	Variance in ratio is attributable to the increase in revenue particularly from high margin products, reduction in interest expense due to repayment of the borrowings

Key Highlights During FY26

In August 2025, the Company successfully raised Rs. 1,300 crores through its initial public offering (IPO), comprising a combination of fresh issue and offer-for-sale. The proceeds supported deleveraging initiatives, strengthening the balance sheet and creating a stable foundation for longterm value creation for stakeholders.

During the year, the Company commenced construction of an enclosure and housing manufacturing plant in Kadapa, Andhra Pradesh, which is expected to become operational by mid-2026. The facility is aimed at enhancing backward integration, improving cost competitiveness and strengthening supply-chain resilience.

The Company further commissioned the CCTV camera lens assembly line, with commercial production targeted to begin from FY27. Upon operationalisation, the facility is expected to add production capacity of 3 lakh lenses per month, with plans to scale capacity to 10 lakh lenses per month by the end of the following year.

To strengthen its innovation capabilities, the Company established a new R&D centre in Ahmedabad, Gujarat, while further expanding its global research footprint through the incorporation of its wholly owned subsidiary, Aditya Infotech Taiwan Company Limited. The Taiwan centre provides access to advanced engineering expertise in imaging technologies, semiconductors and embedded systems, leveraging one of the worlds leading technology ecosystems. Together, these investments enhance the Companys product development capabilities, accelerate innovation cycles and strengthen its technology roadmap, supporting the launch of differentiated, next-generation security and surveillance solutions for domestic and global markets.

The Company entered into a strategic partnership to develop AI-enabled insight-driven video security solutions for industrial, enterprise and public safety applications. In line with its backward integration strategy, it also entered into a joint venture for the manufacturing of coaxial and network cables.

Further strengthening its positioning as a technology- led global brand, the Company is co-designing Indias first IP Camera SoC with Vision AI technology, aimed at enhancing energy efficiency, data security and AI-driven surveillance capabilities.

As part of its multi-brand strategy, the Company launched two new brands, EYRA and NEXIVUE, primarily targeting the mass-market and unorganised segments.

Human Resource

The Companys human resource strategy focuses on attracting skilled talent, fostering continuous learning, and addressing employee concerns proactively. Regular training programmes and workshops are conducted to enhance technical capabilities, strengthen teamwork, and support professional development across the organisation.

To strengthen its leadership capabilities and support future growth, the Company has strengthened its management team through the appointment of experienced professionals in key leadership roles, including Head of Production, Head of Legal, and Head of Credit. In parallel, the Company has established a structured succession planning framework to ensure leadership continuity, build organizational resilience, and develop a strong pipeline of future leaders.

Technical training programmes for manufacturing employees include machine operations, production processes, quality control, and occupational safety practices.

Training Programmes Mission Tech

Established in 2021 in association with the Electronics Sector Skill Council of India, Mission Tech is a four-day training programme aimed at strengthening technical competencies within the surveillance ecosystem.

Training for Technicians

Under Mission Tech, installers and technicians are trained in the installation, operation and maintaining CP PLUS products.

Online Training

The Company conducts weekly online training programmes in multiple languages, enabling partners and system integrators to design and implement effective surveillance solution.

Hands-On Workshops

Hands-on workshops are conducted across branches in India, and free practical training is provided to technicians and installers.

Risks and Concerns

Business risks primarily arise from external factors that may negatively impact operations and profitability. While several of these factors remain beyond the Companys direct control, a robust risk management framework supports business resilience and sustainable growth trajectory.

Key External Threats Macroeconomic Uncertainty

Unpredictable market conditions, inflation, political instability and shifting government policies may impact business sentiment and consumer spending, thereby affecting revenue growth.

Supply Chain Disruptions

Geopolitical instability, supply shocks, natural disasters, pandemics and other logistical constraints may disrupt the flow of goods, leading to delays in production, shipping, and distribution.

Competitive Pressure

Intense competition can may lead to pricing pressures, reduced market share, and margin compression. This environment necessitates continuous innovation to maintain customer relevance and counter emerging market entrants.

Risk Management

The Company has set up a Risk Management Committee to oversee the development and implementation of the Companys risk management framework. The Committee meets at least twice a year to implement, review and monitor the risk management plan for the Company and any other such functions, including cyber security, as may be delegated by the Board.

The Committee is also responsible for periodically evaluating the effectiveness of the risk management framework and ensuring its continued relevance. In the opinion of the Board, there are currently no material risks that may adversely impact the long-term viability of the Company.

Internal Control System and their Adequacy

The Companys internal financial control systems are commensurate with its size and the nature of its operations. The Company deploys a robust system of internal financial controls with reference to financial statements that is complete, reliable and understandable. These controls have been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information, adherence to the Companys policies, safeguarding of assets from unauthorised use and prevention and detection of frauds and errors.

During the year, such controls were tested and no reportable material weakness was observed. The report on the Internal Financial Control was reviewed by the Audit Committee and the Board of Directors and no major weaknesses were observed.

Cautionary Statement

This Management Discussion and Analysis report contains certain statements which are not statements of historical fact and may be described as "forwardlooking statements". These forward looking

statements include statements which can generally be identified by words or phrases such as "aim", "anticipate", "are likely", "believe", "continue", "can", "shall", "could",

"expect; "estimate; "intend", "may; "likely", "objective", "plan", "project", "propose", "seek to", "will", "will achieve", "will continue", "will likely", "will pursue" or other words or phrases of similar import. Similarly, statements that describe the strategies, objectives, plans or goals of our Company are also forward-looking statements. However, these are not the exclusive means of identifying forwardlooking statements.

By their nature, certain market risk disclosures are only estimates and could be materially different from what actually occurs in the future. These forward-looking statements are based on our managements belief and assumptions, current plans, estimates and expectations, which in turn are based on currently available information. As a result, actual results could be materially different from those that have been estimated. Forward-looking statements reflect our current views as of the date of this document and are not a guarantee of future performance. Although the Company believes that the assumptions on which such statements are based are reasonable, any such assumptions as well as statements based on them could prove to be inaccurate. Actual results may differ materially from those suggested by such forward-looking statements. All forward-looking statements are subject to risks, uncertainties, expectations, and assumptions about us that could cause actual results to differ materially from those contemplated by the relevant forward-looking statement. This may be due to risks or uncertainties associated with our expectations with respect to, but not limited to, regulatory changes pertaining to the industries we cater to, and our ability to respond to them, our ability to successfully implement our strategies, our growth and expansion, technological changes, our exposure to market risks, general economic and political conditions in India which have an impact on our business activities or investments, the monetary and fiscal policies of India, inflation, deflation, unanticipated turbulence in interest rates, foreign exchange rates, equity prices or other rates or prices, the performance of the financial markets in India and globally, changes in domestic laws, regulations and taxes, changes in competition in our industry and incidence of any natural calamities and/or acts of violence. There can be no assurance to investors that the expectations reflected in these forward-looking statements will prove to be correct. Given these uncertainties, investors are cautioned not to place undue reliance on such forward-looking statements and not to regard such statements to be a guarantee of our future performance.