The shares of this small-cap aerospace stock engaged in leading fully integrated Electronic Manufacturing Services company with end-to-end capabilities which delivers box-build solutions after the company reported a 142 percent YoY increase in net profits and revenue growth in its recently released quarterly results.
Share Price Movement
The share price of Avalon Technologies Ltd opened at Rs. 669.95 and touched a high of Rs.707 per share on Thursday’s intraday trade, rising 19.84 percent from its previous close of Rs.589.95 per share. However, the shares have adjusted since then and are now trading at Rs.687 each.
What Happened
Such a bullish movement in the scrip price was a result of an earnings update released by the company. The company posted a significant increase in net profits and a jump in revenue in Q2FY25.
According to its recent filing, In Q2FY25, Avalon Technologies Ltd reported a 36.81 percent increase in revenue to Rs.275 crore in Q2FY25, compared to Rs.201 crore in Q2FY24. Furthermore, quarterly, the company saw an increase of 38.19 percent in revenue from Rs.199 crore in Q1FY25.
In the same period, the company reported a significant increase in net profit of 142.8 percent to Rs.17 crore in Q2FY25, up from Rs.7 crore in Q2FY24 and 950 percent from a loss of Rs.2 crore in Q1FY25.
In terms of return ratios, return on capital employed (ROCE) is currently at 6.56 percent, while return on equity (ROE) is at 5.16 percent. The company has a strong current ratio of 4.44 and a debt-to-equity ratio of 0.39. In FY24, the company earned its revenue 46 percent from India and 54 percent from the US.
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Shareholding Pattern
As of September 2024, the shareholding pattern includes promoters holding a major share of 50.69 percent stake in Avalon Technologies, Foreign Institutional Investors (FII) holding around 2.97 percent, Domestic Institutional investors (DII) standing at 23.75 percent, and public holdings standing at 22.59 percent.
About the company
Avalon Technologies Limited is an Electronic Manufacturing Services (EMS) provider that specializes in end-to-end solutions for electronic systems. The company offers a suite of services, including printed circuit board (PCB) design, assembly, and complete box-build manufacturing. Avalon serves global original equipment manufacturers (OEMs) across various sectors, such as mobility, clean energy, and communications.
Their business model concentrated on high-quality, precision-engineered products and strong customer relationships, supported by a network of manufacturing facilities in India and the United States. The company has an order book of Rs. 1,485 crore, a 19.4 percent increase year on year.
Written by – Santhosh S
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