💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue grew 27.2% YoY to INR 1,659.7 Cr in H1 FY26. The CP PLUS brand segment saw its revenue contribution rise to 86% of total sales compared to 70% in the previous year. IP camera products within the portfolio grew to represent nearly 70% of the mix, driving higher value growth.

Geographic Revenue Split

Sales are almost entirely domestic within India, though the company is benefiting from a global backlash against Chinese brands in critical sectors which is allowing CP PLUS to capture domestic market share from global giants.

Profitability Margins

Gross margins showed sustained improvement, reaching 29.8% in Q2 FY26 compared to 20.4% in Q2 FY25. This 9.4% expansion was driven by a favorable product mix (higher CP PLUS and IP camera share) and localization benefits. Adjusted PAT margins improved to 6.2% in H1 FY26 from 3.3% YoY.

EBITDA Margin

EBITDA margin for H1 FY26 stood at 10.6%, a 390 bps expansion from 6.6% in H1 FY25. Q2 FY26 EBITDA margin reached 12.0% (up 560 bps YoY) due to operating leverage and higher-margin product sales. FY26 guidance targets a sustainable 10-11% EBITDA margin.

Capital Expenditure

Planned capex includes INR 60 Cr for the parent entity with a FY26 completion date. The manufacturing subsidiary has planned capex of INR 60 Cr in FY26 and INR 45 Cr in FY27 to install additional SMT lines and expand capacity.

Credit Rating & Borrowing

The company significantly improved its capital structure by reducing net debt from ~INR 466 Cr in June 2025 to ~INR 68 Cr in September 2025 using IPO proceeds. This deleveraging is expected to result in substantial interest cost savings; credit ratings monitor a PBILDT margin of 8% and gearing of 0.75x as positive triggers.

⚙️ Operational Drivers

Raw Materials

Key components include chipsets (SoCs), sensors, storage (DDR and Flash memory), and passive components such as capacitors, transistors, and diodes. Memory and sensors represent a significant portion of the Bill of Materials (BOM) value.

Import Sources

Approximately 85% of raw materials and unassembled CCTV components are imported from China. Other components are sourced from Taiwan and global semiconductor brands.

Key Suppliers

Dahua is a primary strategic supplier and partner. The company also recently partnered with L&T Semiconductor Technologies for Vision AI SoC-powered cameras and sources components from various global semiconductor and memory manufacturers.

Capacity Expansion

Current manufacturing capacity reached 1.8 million units per month in Q2 FY26. The company is expanding this to 2 million units per month by Q3 FY26 to meet growing demand.

Raw Material Costs

Raw material costs are impacted by global shortages in chipsets and sensors, with rising prices for DDR and Flash memory. The company aims to localize 50% of the BOM value within the next 12-24 months to mitigate import costs.

Manufacturing Efficiency

Efficiency is being driven through the implementation of Kaizen, 5S, New MES (Manufacturing Execution Systems), and factory automation to support the ramp-up to 2 million units per month.

Logistics & Distribution

CP PLUS utilizes an extensive country-wide distribution network. Distribution costs are managed through a 'feet-on-street' approach to strengthen engagement with system integrators and architects.

📈 Strategic Growth

Expected Growth Rate

25-30%

Growth Strategy

Growth will be achieved through market share consolidation following the implementation of STQC norms, which disadvantaged smaller players. The company is also launching a 'Pro Series' to target global brands, expanding manufacturing capacity to 2 million units/month, and fully consolidating the AIL Dixon subsidiary to capture 100% of operating earnings.

Products & Services

Video surveillance equipment including IP cameras, CCTV cameras, Vision AI SoC-powered cameras, Lens modules, and PTZ (Pan-Tilt-Zoom) modules.

Brand Portfolio

CP PLUS, EYRA, NEXIVIEW.

New Products/Services

Launch of Vision AI cameras and backward integration into Lens and PTZ module manufacturing starting Q4 FY26, which is expected to further enhance margins in FY27.

Market Expansion

Focusing on the SMB market with new series and targeting the government and private enterprise sectors through an expanded STQC-certified portfolio.

Market Share & Ranking

CP PLUS holds a 31.4% market share in the Indian video surveillance market as of Q1 FY26, maintaining a leadership position.

Strategic Alliances

Strategic partnership with L&T Semiconductor Technologies for indigenous SoC development and a long-standing exclusive distribution relationship with Dahua.

🌍 External Factors

Industry Trends

The industry is shifting toward IP-based systems (growing at 25%+) and higher regulatory compliance (STQC norms). CP PLUS is positioned as a leader in STQC-certified products, creating a barrier for unorganized players.

Competitive Landscape

Key competitors include global brands and domestic players like Zicom, Panasonic, and Bosch, which collectively hold about 25% of the market.

Competitive Moat

Moat is built on strong brand recall (CP PLUS), an extensive distribution reach, and early compliance with STQC norms. This is sustainable because certification backlogs and supply chain scale create high entry barriers for smaller competitors.

Macro Economic Sensitivity

The security industry is expected to grow at 16-17% annually, providing a strong macro backdrop for demand.

Consumer Behavior

There is a clear shift in consumer preference toward Indian-branded security products and high-definition IP cameras for both residential and enterprise use.

Geopolitical Risks

Benefiting from 'China Plus One' sentiments and regulatory backlash against Chinese CCTV brands in Western markets and India, which facilitates domestic brand preference.

⚖️ Regulatory & Governance

Industry Regulations

The implementation of STQC (Standardisation Testing and Quality Certification) norms in April 2025 is the primary regulatory driver, requiring rigorous certification for surveillance products sold in India.

Environmental Compliance

Not specifically disclosed in INR values.

Taxation Policy Impact

The company reported tax expenses of INR 34.7 Cr for H1 FY26 on a profit before exceptional items of INR 137.6 Cr.

Legal Contingencies

The company is pursuing legal action for criminal negligence against a warehouse keeper to recover the remaining balance of a INR 177 Cr fire loss (after an expected INR 30 Cr insurance recovery).

⚠️ Risk Analysis

Key Uncertainties

Supply chain disruptions for critical semiconductors and sensors could impact production by 20-30% if global shortages persist.

Geographic Concentration Risk

High concentration in the Indian market; while this is a growth area, it lacks international geographic diversification.

Third Party Dependencies

High dependency on Dahua for components and technology, representing a significant supplier concentration risk.

Technology Obsolescence Risk

Rapid shifts in AI and SoC technology require continuous R&D; the company is mitigating this through its L&T Semiconductor partnership.

Credit & Counterparty Risk

The company maintains a 2.5-3 month credit cycle; any deterioration in the financial health of its distribution partners could impact receivables quality.