Why Analyst Sees This Ashish Kacholia-Backed Multibagger Small Cap Stock Surging 20%

Shares of Aditya Vision have surged up over 100% in the past six months, and analysts at Nuvama think the stock has more steam left.

The Aditya Vision Analyst: Nikhil Shetty for Nuvama initiated coverage on the stock with a price target of ₹4,002. The target indicates an around 20% upside from the stock’s last closing price of ₹3,362.

The Aditya Vision Thesis: Aditya Vision is a multi-brand consumer electronics retail chain with its headquarters located in Patna, Bihar. Founded and managed by first-generation entrepreneur Yashovardhan Sinha, the company has evolved significantly since its inception in 1999. Aditya Vision has expanded its footprint to encompass 130 outlets as of September, strategically distributed across Bihar, Jharkhand, and Eastern Uttar Pradesh, with 97, 20, and 13 stores, respectively.

The analysts said that the management of Aditya Vision plans to expand its presence across all districts in the Hindi heartland, with a particular focus on densely populated districts. To achieve this, the company plans strategic investments in brand development through various initiatives, including brand-building activities, communication, promotional campaigns (such as print and TV advertisements, and hoardings), and active participation in industry events. As per the firm, this continuous effort will enhance the retailer’s brand image, subsequently driving sales and profitability.

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Talking about the broader market, Shetty adds that the consumer durables market in India is witnessing a surge in demand, fueled by increasing incomes. This upward trend is expected to persist, supported by factors such as growing rural incomes, urbanization, a burgeoning middle class, and evolving lifestyles. The rise in discretionary income, coupled with accessible financing options, has led to shorter product replacement cycles, with consumer durables like air conditioners and LCD TVs becoming essential rather than luxury items.

In the medium term, the brokerage firm anticipates that demand from rural and semi-urban markets will surpass that from urban areas. The firm expects that Aditya Vision will continue to face tough competition from online retailers.

Analyst thinks that the low penetration of consumer durables in rural India presents an opportunity for the company. The electronics retailer’s established position in Bihar and Jharkhand positions it as a major beneficiary of this emerging consumer landscape.

Price Action: Aditya Vision’s share price was up 0.67% to trade at ₹3,384.45 in the early hours of trading on Tuesday. Ashish Kacholia owns a 1.99% stake in the company.

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Posted In: Analyst ColorEquitiesLong IdeasPrice TargetInitiationMarketsAnalyst RatingsTrading IdeasAditya VisionAshish KacholiaNuvama