Avalon Technologies: Target Price of Rs 1233 Set by Prabhudas Lilladher

Avalon Technologies Sees Robust Revenue Growth, Guides Strong Performance for FY27

Avalon Technologies (AVALON IN) has reported significant revenue growth, driven primarily by its Mobility and Industrial segments. The company's revenue increased by 40.0% year-over-year (YoY), with the Mobility and Industrial segments growing by approximately 35.2% and 59.5% YoY, respectively. The EBITDA margin remained stable at 11.8%, with the Mobility and Industrial segments contributing 30% and 32% to the revenue.

The company has guided a revenue growth of 24-27% for the fiscal year 2027 (FY27), with gross margins expected to remain in the range of 33-35% for the same period. Additionally, Avalon Technologies has narrowed its US manufacturing losses to approximately Rs50mn in Q4FY26, with a breakeven expected in FY27. The company has achieved its earlier target of doubling revenues from FY24 to FY27 nearly one year ahead of schedule and has set a target to further double revenues between FY26 and FY29.

Key Estimates and Projections

Read also: SpaceX Seeks Record $75 Billion IPO, Potentially Positioning Elon Musk as the World's First Trillionaire

The company's research report has led to a revision of our FY27/FY28 earnings per share (EPS) estimates upward by 1.9%/4.8%. However, we have downgraded our rating to 'HOLD' from 'BUY' due to the recent run-up in the stock price. Our revised target price for Avalon Technologies is INR 1,233, valuing the company at 40x FY28 earnings.