Avalon Technologies Q2FY26 Concall Decoded: “Doubling Dreams, Conservative Declarations”

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1. Opening Hook

While most tech firms are praying tariffs disappear faster than an intern on Friday, Avalon seems to be billing 99% of them back to clients — genius or just gutsy? The CMD swears it’s “no spreadsheet sorcery,” but when both India and U.S. factories hum together like twins on caffeine, maybe it really is growth magic. With revenue up nearly 50% and guidance raised mid-year, Avalon’s “conservative” tone feels more like a humblebrag.
Stick around — because what they said about semiconductors, railways, and clean energy will make your portfolio do a double take.

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2. At a Glance

• Revenue up 49% YoY: CFO insists it’s real, not inflation in disguise.
• EBITDA up 98.5%: Finally, profit stopped skipping leg day.
• PAT up 158%: Investors asking if this is a typo — it isn’t.
• ROCE at 18.4%: From 8.2% last year — the gym routine worked.
• Gross margin steady at 34.9%: Tariffs may rise, but so do Avalon’s nerves of steel.
• Stock buzzing: Traders heard “semiconductor entry,” ignored “working capital 131 days.”

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3. Management’s Key Commentary

Kunhamed Bicha (CMD): “We’ve maintained 99% tariff recoveries — a sign of customer trust.”
(Or: clients pay the bill, Avalon gets the credit. Smooth 😏)

Bicha: “We’re raising FY26 guidance to 28–30% growth.”
(Translation: even our conservative forecast has an ego now.)

Bicha: “India operations contributed 81% of revenue; US 19%.”
(Because making in India is patriotic and profitable.)

Bicha: “Our order book stands at ₹1,863 crore, up 25% YoY.”
(Translation: enough backlog to stay busy through the next election.)

CFO Suresh: “EBITDA rose to ₹39 crore, with operating leverage kicking in soon.”
(Soon = corporate for “please wait another two quarters.”)

Bicha: “Three growth engines — existing, new, and upcoming — are humming.”
(They’ve got more engines than an ISRO test bench.)

Bicha: “Aerospace up 59%, railways up 58%, industrials up 73%.”
(Basically, every sector except office chairs is booming.)

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4. Numbers Decoded

Metric	Q2FY26	Q2FY25	YoY Change	Punchline
Revenue	₹382 Cr	₹275 Cr	+39%	Growth refuses to take weekends off
EBITDA	₹39 Cr	₹30 Cr	+28%	Margin gains finally visible
PAT	₹25 Cr	₹17 Cr	+43%	Profit finally joined the party
Gross Margin	34.3%	34.8%	Flat	Stability is sexy
ROCE	18.4%	8.2%	+10 pts	Capital’s doing overtime
Order Book	₹1,863 Cr	₹1,486 Cr	+25%	Backlog bigger than some peers’ revenue
Net Debt	₹60.5 Cr	₹—	—	Debt-lite, ambition-heavy

Capex-lite + asset turns of 8.7x = Avalon squeezing every rupee till it sings.

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5. Analyst Questions