1. At a Glance
Avantel is that small-cap defence stock everyone flexes about at parties… until it drops 7% in a day. From radar systems to SATCOM to medical tech—this company is juggling more industries than an engineering fresher. But is this rocket launching or crash-landing?
2. Introduction with Hook
Imagine if DRDO, ISRO, and your college robotics club had a baby—that’s Avantel.
This Andhra-based techie:
- Pulled ₹3.2 Cr net profit in Q1 FY26 (down 56% YoY)
- Has orders from DRDO, BEL, DAE, Mazagon, Goa Shipyard
- Just did a rights issue at ₹40 when the stock was at ₹130+
Great tech, mad contracts, but market’s asking—“Bro, kahan margin gaya?”
3. Business Model (WTF Do They Even Do?)
Avantel builds:
- SATCOMs for Indian military + Indian Railways
- Radar subsystems in 30–53 MHz range
- Defence radios, RF front-ends, synthesizers
- Embedded + GIS software, and now… medical devices too? (yeah)
It’s like HAL, DRDO, and Apollo Hospitals had a weekend hackathon.
4. Financials Overview
| Metric | Q1 FY26 | YoY Growth |
|---|---|---|
| Sales | ₹51.91 Cr | -25% |
| EBITDA | ₹10.45 Cr | -34% |
| Net Profit | ₹3.23 Cr | -56% |
| EPS | ₹0.12 | 🤕 |
- OPM dropped to 20.1%, worst in 8 quarters
- Profit nosedived like a MiG-21 on autopilot
- Management says execution cycle + cost pressures—markets say “hmm”
5. Valuation
Fair Value Range: ₹90 – ₹145
Method 1: PE-Based
- EPS TTM: ₹1.98
- At 45x = ₹89
- At 65x = ₹128
Method 2: DCF & Orderbook Hype
- Based on ₹80 Cr rights issue fuelling growth
- Bullish FV = ₹145 (if execution improves)
Verdict:
Trading at 15x book value, this isn’t cheap—it’s defence designer wear. Risk lovers only.
6. What’s Cooking – News, Triggers, Drama
Oh, the kitchen’s on fire.
- Jun 2025: Rights issue of ₹80.9 Cr at ₹40/share. Fully subscribed.
- Jun 2025: DRDO order worth ₹13.67 Cr
- Apr–Jun 2025: Orders from Mazagon, Goa Shipyard, DAE, BEL
- Jun 2025: Subsidiary Imeds Global opens 25,000 sq. ft med device plant
- Dilution alert: Promoter stake drops again
Plot twist: defence + healthcare in one plate. Too spicy?
7. Balance Sheet
| Item | FY25 |
|---|---|
| Equity Capital | ₹49 Cr |
| Reserves | ₹188 Cr |
| Borrowings | ₹26 Cr |
| Total Assets | ₹290 Cr |
| Net Worth | ₹237 Cr |
- Leverage is low, but dilution is higher than cafeteria coffee.
- Book value = ₹8.95, CMP = ₹136. That’s 15x book, not a typo.
8. Cash Flow – Sab Number Game Hai
| Year | CFO | CFI | CFF | Net CF |
|---|---|---|---|---|
| FY23 | ₹2 Cr | -₹10 Cr | ₹8 Cr | ₹0 Cr |
| FY24 | ₹65 Cr | -₹42 Cr | -₹23 Cr | ₹1 Cr |
| FY25 | ₹50 Cr | -₹57 Cr | ₹8 Cr | ₹1 Cr |
- Operating Cash solid. But investing more than cash earned = classic “scale-up” behaviour.
- No FCF = No chai, only PPTs.
9. Ratios – Sexy or Stressy?
| Metric | FY25 |
|---|---|
| ROE | 28% |
| ROCE | 37% |
| OPM | 36% |
| P/E | 69x |
| D/E | 0.11x |
Commentary:
Returns? Sexy.
Valuation? Stressed.
Promoter dilution? Mildly alarming.
10. P&L Breakdown – Show Me the Money
| Year | Revenue | EBITDA | PAT |
|---|---|---|---|
| FY23 | ₹154 Cr | ₹47 Cr | ₹27 Cr |
| FY24 | ₹224 Cr | ₹82 Cr | ₹53 Cr |
| FY25 | ₹249 Cr | ₹92 Cr | ₹56 Cr |
Topline growing but Q1 FY26 broke the streak. Let’s hope it’s a quarterly flu, not long Covid.
11. Peer Comparison
| Company | Revenue (Cr) | PAT (Cr) | P/E | ROE |
|---|---|---|---|---|
| HAL | 30,981 | 8,360 | 36x | 26% |
| BEL | 23,769 | 5,321 | 54x | 29% |
| Data Patterns | 708 | 215 | 70x | 15% |
| Zen Tech | 974 | 280 | 58x | 26% |
| Avantel | 249 | 56 | 69x | 28% |
Punchline:
Tiny revenue, big returns. Avantel is like the toddler at a wedding who knows the choreography better than the adults.
12. Miscellaneous – Shareholding, Promoters
| Category | Jun 2025 |
|---|---|
| Promoters | 37.15% (down from 40.1%) |
| FIIs | 0.47% |
| DIIs | 0.18% |
| Public | 62.2% |
| Shareholders | 2.21 lakh |
- Rights issue diluted promoter stake.
- Public holding rising = more eyeballs, more expectations.
13. EduInvesting Verdict™
Avantel is the SATCOM-crazy, rights-issuing, defence-obsessed multitasker that’s building more than just gadgets—it’s building narrative.
If Q1 was a bump, the ₹80 Cr raise better convert to contracts fast.
Not a plane crash yet. But check the weather radar before boarding.
Metadata:
Written by EduInvesting Team | 25 July 2025
Tags: Avantel, Defence Stocks, Rights Issue, SATCOM, EduInvesting Premium
