Hold Avalon Technologies; target of Rs 1083 Prabhudas Lilladher

Prabhudas Lilladher's research report on Avalon Technologies

Avalon Technologies (AVALON IN) has reported decent revenue growth of 39.1% YoY mainly driven from Mobility/Industrial segments (grew by ~29%/65% YoY). EBITDA margin contracted by healthy ~90bps YoY to 10.1%, (Mobility/industrials contributes 28%/36% to the revenue) with increased domestic manufacturing (reached 81% of revenue). AVALON has upward its guidance from 23-25% to 28-30% growth in topline for FY26 and maintained its gross margin to 33-35%. We tweak our earnings estimates for FY27/FY28.

Outlook

We estimate FY25-28E revenue/EBITDA/PAT CAGR of 30.7%/36.0%/42.5%, with EBITDA margin expansion of ~130bps. We maintain our ‘HOLD’ rating with a TP of Rs 1,083 valuing at 45x Sep’27 earnings, healthy performance in H1FY26.