Avalon Technologies Ltd Q2FY26 – The ₹382 Crore Symphony of Circuits, Chips & Chaos (39% YoY Growth and a P/E That’s Orbiting Mars at 87x)
1. At a Glance
Avalon Technologies Ltd, the fully integrated Electronic Manufacturing Services (EMS) player, just dropped its Q2FY26 mixtape — and it’s got all the beats: revenue up 39.1% YoY to ₹382 crore, profit after tax (PAT) up 42.9% YoY to ₹25 crore, and a P/E ratio that’s currently auditioning for the next Elon Musk mission at 87.7x.
At a market cap of ₹7,674 crore and stock price of ₹1,150, Avalon has been on a caffeine overdose — 95% return in the past year. The company’s ROCE stands at 12.8%, ROE at 10.4%, and debt-to-equity is a healthy 0.25.
But don’t get too comfortable — this is one of those “looks stable till the CFO resigns” stories. With multiple resignations in FY25 (CFO and Company Secretary both exited) and promoter holdings quietly dipping from 50.9% to 44.5%, this tech assembler from Chennai is showing its cards — and a few stress wrinkles too.
Still, a ₹1,244 crore order book and tie-ups in supercomputing (C-DAC’s RUDRA Program) suggest Avalon is not just soldering boards — it’s soldering the future.
2. Introduction – From Chips to Chutzpah
If you’ve ever wondered what happens when Tamil Nadu’s manufacturing muscle meets Silicon Valley’s startup swagger, Avalon Technologies is your answer — a hybrid child assembling PCBs by day and dreaming of NASDAQ by night.
Incorporated in 1999, Avalon has quietly built a presence across India and the US, becoming one of the very few Indian EMS firms with manufacturing bases in Atlanta and Fremont. Think of it as a desi Foxconn — but with more humidity and fewer trade wars.
The company’s Q2FY26 results were basically a flex. Revenue up 39.1% YoY, PAT up 42.9%, and an operating profit of ₹39 crore with margins hovering around 10%. Sure, it’s not TCS margin-level glory, but when your clients include Collins Aerospace, Kyosan, Zonar Systems, and eInfochips, you don’t need to shout — your invoices do the talking.
Still, investors might ask — if everything’s this shiny, why no dividends since birth? And why does Avalon’s EV/EBITDA look like a SpaceX altitude — 46.5x?
Because Avalon is in the “growth phase,” darling. Which is corporate code for: “We’re buying soldering machines, not paying you cash.”
3. Business Model – WTF Do They Even Do?
Alright, grab a cup of filter coffee and let’s decode Avalon’s business in simple words:
They’re not a gadget brand. They’re the invisible hands behind the gadgets — manufacturing printed circuit boards (PCBs), cable assemblies, metal housings, plastic enclosures, transformers, and full-fledged electronic systems.
In short — if your product blinks, beeps, or buzzes, Avalon probably built it.
Their product portfolio covers:
PCB Design & Assembly
Cable Assembly & Wire Harnesses
Sheet Metal Fabrication
Transformers, Chokes, and Inductors
Injection Moulded Plastics
Box Builds (complete electronic systems)
Avalon works across industries that don’t go obsolete every TikTok trend — industrial, clean energy, mobility, communications, and medical devices. In fact, in H1FY24, 35% of revenue came from industrial clients, and another 27% from mobility/transportation.
Their revenue split FY23:
Box Build – 54%
PCB – 28%
Cables – 9.5%
Metals – 4%
Magnetics – 2.5%
Design – 2%
Plastics – 1%
They even supply to C-DAC’s RUDRA Supercomputer program, which means somewhere inside a government lab, a Tamil Nadu-made circuit is busy crunching data faster than Indian bureaucracy can approve a file.
The cherry on top? 14 manufacturing units, 66 production lines, and presence in both India and the US — the only Indian EMS player with that global footprint.
4. Financials Overview
Consolidated Quarterly Performance (₹ crore)
Metric
Latest Qtr (Sep’25)
YoY Qtr (Sep’24)
Prev Qtr (Jun’25)
YoY %
QoQ %
Revenue
382
275
323
39.1%
18.3%
EBITDA
39
30
30
30.0%
30.0%
PAT
25
17
14
42.9%
78.6%
EPS (₹)
3.74
2.65
2.14
41.1%
74.8%
Annualised EPS = ₹3.74 × 4 = ₹14.96 → P/E ≈ 77x on ₹1,150 price (screener shows 87.7x due to TTM basis).
Commentary: Margins are stabilising at 10%, which for a capital-heavy EMS firm is decent. But the valuation? That’s hotter than the soldering iron.
5. Valuation Discussion – Fair Value Range
Let’s bring out the audit calculator.
a) P/E Approach Industry P/E: 37.8x Avalon P/E: 87.7x EPS (TTM): ₹13.2
Fair Value Range = ₹13.2 × (Industry P/E ± 15%) → ₹13.2 × (32 to 43) = ₹422 – ₹568
b) EV/EBITDA Approach EV/EBITDA Industry Avg: ~20x Avalon EV/EBITDA: 46.5x EBITDA (TTM): ₹144 crore EV = ₹7,781 crore
Fair EV Range (18–24x EBITDA) = ₹2,592 – ₹3,456 crore Implying Fair Market Cap ≈ ₹2,500 – ₹3,300 crore → ₹375 – ₹495 per share
c) Simplified DCF (Educational) Assuming FCF = ₹25 crore (latest), growing at 15% for 5 years, terminal growth 4%, cost of capital 12% → Fair Value ≈ ₹480–₹520/share
👉 Educational Fair Value Range: ₹420 – ₹520 per share
Disclaimer: This fair value range is for educational purposes only and is not investment advice.
6. What’s Cooking – News, Triggers, Drama
Oh boy, the corporate kitchen’s been sizzling:
Nov 2025: Q2FY26 results: Revenue ₹382.5 crore (+39% YoY), PAT ₹25 crore (+43%).
Apr 2025: Invested in Zepco Technologies. Because one tech firm buying another always ends with either synergy or therapy.
Jun 2025: Promoter Bhaskar Srinivasan sold 37.96 lakh shares, reducing his stake from 21.2% to 15.5%. “Portfolio diversification,” they said. The market said, “Why though?”
Sep 2024: CFO R.M. Subramanian resigned. Followed by Company Secretary Dr. Rajesh leaving in Nov 2024. Must’ve been tough soldering through management circuits.
Jan 2024: Avalon officially announced partnership with C-DAC’s RUDRA program — helping India build homegrown supercomputers.
So yeah, Avalon’s headlines are a mix of NASA-level tech collabs and HR-level attrition.
