Subscribe- Long term to Avalon Technologies: Anand Rathi

Anand Rathi IPO report on Avalon Technologies

Avalon Technologies is one of the leading fully integrated Electronic Manufacturing Services (EMS) companies with end-to-end capabilities in delivering box build solutions in India, with a focus on high value precision engineered products. They provide a full stack product and solution suite, right from printed circuit board design and assembly to the manufacture of complete electronic systems to certain global original equipment manufacturers (OEMs), including OEMs located in the United States, China, Netherlands, and Japan. The company commenced its operations in 1999 as a pure play PCB assembler with a niche focus on their capabilities and has become vertically integrated to include multiple offerings. They have a significant level of vertical integration in the EMS industry that includes PCB assembly, cable assembly and wire harnesses, sheet metal fabrications and machining, injection molded plastics, magnetics and end-to-end box build.

Valuation and Outlook

At the upper price band company is valuing at P/E of 41x with a market cap of ₹ 28,467 million post issue of equity shares and return on net worth of 85%. We believe that company is fully priced and recommend a “Subscribe- Long term” rating to the IPO.