An electronics manufacturer has grown revenue almost 50% in a year, more than doubled quarterly profit and is days from its next results. This guide explains what the business does, what the numbers really say, what the share price already assumes, and what to check before you act.

At a glance

Reference price (recent NSE close) ₹1,855

Market capitalisation ≈ ₹12,400 crore

52-week low  /  high ₹777  /  ₹2,618

Trailing P/E (on consolidated profit) ≈ 93×

Next event Q2 FY27 results · 12 November 2026

Published 11 November 2026   ◆   About 20 minutes   ◆   A guide for readers of Brokerage Free Investments

Contents

Every line is a link. Click to jump to a section; each section has a link back here.

01 Why Avalon, and why this week Go →

02 The business in plain language Go →

03 Reading the numbers Go →

04 The order book, stress-tested Go →

05 Two engines: India and the US Go →

06 Valuation: what the price already assumes Go →

07 The 12 November checklist Go →

08 Risks, ranked honestly Go →

09 Three futures: bull, base and bear Go →

10 Putting it into practice Go →

11 Your next step with Brokerage Free Investments Go →

Ready to act on what you read?  Visit Brokerage Free Investments →

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01 Why Avalon, and why this week

Why a quiet electronics maker is suddenly the stock everyone is asking about.

Some stocks earn attention slowly. Avalon Technologies has earned it in a rush. The electronics manufacturing services company is listed on the NSE and BSE, and its shares have more than doubled from a 52-week low near ₹777 to roughly ₹1,855–₹1,929 in recent sessions. Yet it still trades between 26% and 29% below its 52-week high of ₹2,618. That gap, between what the business is delivering and how the market keeps changing its mind about the price, is exactly why the stock deserves a careful read.

The timing matters too. The board meets on 12 November 2026 to approve results for the quarter ended 30 September. Everything in this guide is built on data available up to the morning of 11 November, so treat it as the pre-results picture and re-check the numbers once the results land.

The short version

The business. Avalon builds electronic products for other companies, from circuit boards to complete, tested, ready-to-ship systems. Sixty percent of recent revenue came from these full “box-build” systems, which carry more value and stickier customer relationships than simple assembly.

The momentum. In the June 2026 quarter, revenue rose 49.8% to ₹484 crore, operating profit (EBITDA) rose 93.9% to ₹58 crore, and profit after tax rose 145.3% to ₹35 crore. It was the eighth straight quarter of sequential improvement.

The visibility. The order book stood at ₹2,208 crore at 30 June 2026, executable over roughly 14 months, with a further ₹1,256 crore of longer-dated contracts behind it.

The price. At about 93 times trailing earnings, the market has already paid for a lot of this growth. Section 06 shows the arithmetic, so you can judge how much.

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02 The business in plain language

From circuit boards to finished products: what Avalon builds, for whom, and where.

Electronics manufacturing services, or EMS, is the industry of building other companies’ electronic products. A brand designs a device and sells it; an EMS company is the factory, the supply chain and the test lab behind it. You rarely see the name on the box, but the box was probably built by someone like Avalon.

From a circuit board to a finished product

EMS work comes in layers. At the simplest level a company assembles components onto printed circuit boards. One step up, it integrates boards, wiring, enclosures and software into a working unit. At the top, the “box-build” level, it delivers a finished, tested product the customer can ship straight to its own buyer. Avalon’s emphasis is on that top layer, and in Q1 FY27 box-build contributed 60% of revenue.

Worked example · why box-build matters

Imagine a company that designs an energy-storage controller. It could buy boards from one vendor, cables from another, an enclosure from a third and then assemble and test everything itself. Or it could hand the whole job to a manufacturer that does all of it under one roof. The second route costs the manufacturer more effort but earns it more revenue per unit and, importantly, makes it hard to replace, because the customer’s design, tooling and quality approvals now live inside that factory.

The dual-shore model

Avalon manufactures in both India and the United States. In Q1 FY27, India plants produced 72% of revenue and US plants 28%. Customers, however, are weighted the other way: 59% of revenue came from customers in the US market and 41% from India. Keep both pairs in mind. The first tells you where the products are made; the second tells you where the demand sits.

This matters because it shapes both opportunity and risk. Serving US customers from a US plant helps with delivery speed and trade friction. Making products in India, where margins are higher, helps profitability. The company is deliberately growing the Indian side, including a new Chennai facility aimed at domestic demand that was due to begin commercial production from Q2 FY27.

Where the demand comes from

Avalon sells into industrial equipment, clean energy, mobility and transportation, medical devices and communication. Newer pools include semiconductor manufacturing equipment, power infrastructure, railways, aerospace and data-centre-linked applications. The industrial vertical alone makes up roughly 30–32% of the order mix. A spread like this is the company’s defence against any single industry having a bad year, though Section 05 shows that diversification has limits.

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03 Reading the numbers

Revenue up 50%, profit up 145%: what really sits behind the headline.

Numbers are only useful when you know what to compare them with. Here is the June 2026 quarter next to the same quarter a year earlier, then the full-year picture.

The quarter that moved the stock: Q1 FY27 vs Q1 FY26

Revenue ₹484 cr vs ₹323 cr

EBITDA ₹58 cr vs ₹30 cr

EBITDA margin 12.0% vs 9.2%

Profit after tax ₹35 cr vs ₹14 cr

Gross margin 34.7% vs 35.5%

The full year behind it

FY26 revenue (growth) ₹1,603 cr (+46%)

FY26 PAT (growth) ₹113 cr (+78%)

Q4 FY26 revenue / PAT ₹480 cr / ₹41 cr

Worked example · operating leverage in one calculation

Revenue rose by about ₹161 crore between the two quarters (₹484 crore minus ₹323 crore). EBITDA rose by about ₹28 crore (₹58 crore minus ₹30 crore). Divide the second by the first and you get an incremental margin near 17%, well above the 9.2% margin the business earned a year ago.

In plain terms, each extra rupee of sales brought in about 17 paise of operating profit, against only about 9 paise on the old base. That is operating leverage: fixed costs such as plants and management are spread across more revenue, so profit grows faster than sales. It is the reason EBITDA grew 94% on revenue growth of 50%.

Quality checks beyond the headline

Cash. Operations generated positive cash flow of ₹32 crore in the quarter. Profit that never turns into cash is a warning sign, so this is worth noting.

Returns. Return on capital employed (ROCE) improved to 23.4% from about 10% two years ago. Management also said working capital improved by about 25 days.

Leverage. Net debt to EBITDA was about 0.1, so debt is not a constraint. To be balanced, gross debt did rise from ₹134 crore to ₹196 crore over the year, which is consistent with funding growth but is worth monitoring.

Margin gap. EBITDA margin was 12.0% but PAT margin only 7.2%. The difference is depreciation, interest, tax and the US plant losses. The last of these is shrinking, which is the subject of Section 05.

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Profit grows faster than sales when fixed costs are spread over more revenue.

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04 The order book, stress-tested

How much work is already booked, and does it support the guidance?

For a manufacturer, the order book is the closest thing to a preview of future revenue. It does not guarantee anything, since orders can be delayed, resized or cancelled, but it tells you how much work is already in the pipeline.

Test one: how many years of revenue does it cover?

Trailing twelve-month revenue is roughly ₹1,764 crore (FY26’s ₹1,603 crore plus Q1 FY27’s ₹484 crore, minus Q1 FY26’s ₹323 crore). The ₹2,208 crore book is therefore about 1.25 times that figure. Put another way, the order book alone covers around fifteen months of recent sales.

Test two: what does the guidance require?

Management guides for FY27 revenue growth of 26–30%. Applied to FY26’s ₹1,603 crore, that is a range of about ₹2,020 crore to ₹2,084 crore.

Worked example · the run-rate needed

FY27 guide, low end (+26%) ≈ ₹2,020 cr

FY27 guide, high end (+30%) ≈ ₹2,084 cr

Already booked in Q1 ₹484 cr

Needed over Q2–Q4 ₹1,536–1,600 cr

Average per quarter ₹512–533 cr

In other words, the company needs to average roughly ₹512–₹533 crore a quarter for the rest of the year, about 6–10% above the Q1 level. With a ₹2,208 crore book and a recent sequential trend of improvement, that looks achievable, though not trivial.

Test three: the lag that deserves a question

Revenue grew 49.8% while the order book grew 23.4%. That gap is the sort of detail sceptical investors raise. Management’s explanation is that long-term contracts only record the current rolling purchase orders, not their full lifetime value, so the book understates what is committed. It is a reasonable answer, but it means the book is less informative than usual, and you should watch whether it keeps growing in the coming quarters.

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05 Two engines: India and the US

A profitable Indian engine, and a US engine that is still catching up.

Think of Avalon as two engines bolted to one chassis. The Indian engine is mature and profitable. The US engine is newer and has been a drag. The story of the next few quarters is largely about whether the second engine catches up.

The Indian engine

Share of revenue 72%

EBITDA margin 16.7%

PAT margin 11.1%

The US engine

Share of revenue 28%

Revenue growth 2.1× to ≈ ₹138 cr

Operating loss, then → now ₹4.5 → ₹0.3 cr

PAT loss, 2 yrs ago → now ₹14 → ₹9 → ₹4 cr

Worked example · what the US losses cost you

India’s 72% share of revenue is about ₹349 crore. At an 11.1% PAT margin, that is roughly ₹38.7 crore of profit. Subtract the US loss of about ₹4 crore and you arrive at about ₹34.7 crore, very close to the ₹34.9 crore the company reported. The reconstruction is approximate, but it shows how neatly the pieces fit.

Now the useful part. If the US business reaches break-even, as management targets at EBITDA level by the end of FY27 and at PAT level after that, roughly ₹4 crore a quarter stops leaking away. Against a ₹34.9 crore quarterly profit, that is an increase of about 11–12% before any growth at all. This is the single most concrete profit lever the company has.

What is growing and what is not

In Q1 FY27, clean energy revenue grew 141% year-on-year, industrials roughly 50%, mobility and transportation 44% and medical about 7%. Communication fell about 40%. Management describes clean energy as volatile and points to energy storage, rather than solar panels, as the focus, with US incentives for it running through 2032. Those incentives are a policy matter, so they can change.

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06 Valuation: what the price already assumes

A good business and a good investment differ by the price you pay.

A good business and a good investment are two different things. The difference is the price. This section puts numbers on what the market is currently assuming.

Where the stock stands

Recent NSE close ₹1,855.50

Market capitalisation ≈ ₹12,400 cr

52-week low / high ₹777 / ₹2,618

From the 52-week high about −29%

Promoters  /  FIIs 40.4%  /  11.1%

DIIs  /  public 21.9%  /  26.7%

Worked example · the price-to-earnings maths

Trailing twelve-month profit after tax is roughly ₹134 crore (FY26’s ₹113 crore, plus Q1 FY27’s ₹34.9 crore, minus Q1 FY26’s ₹14.2 crore). A market value of ₹12,413 crore divided by ₹134 crore gives a price-to-earnings multiple of about 93. Some stock screens show a higher figure because they use a different earnings base, so always check what a quoted multiple is built on.

Now look forward. One brokerage research house, which rates the stock “Reduce” mainly on valuation, uses a target of ₹1,470 at 45 times FY28 earnings. Working backwards, that implies FY28 earnings per share of about ₹32.7. At ₹1,855, you would be paying roughly 57 times that figure. A different research house is positive on the stock, so professional opinion is genuinely split.

Worked example · what different multiples would mean

Using that same ₹32.7 estimate purely as an illustration, here is where different multiples would take the price compared with ₹1,855.

At 40× FY28 earnings ₹1,307 (−29%)

At 45× FY28 earnings ₹1,470 (−21%)

At 57× (about today) ₹1,855 (0%)

At 65× FY28 earnings ₹2,124 (+14%)

Now suppose earnings come in 20% above that estimate, at about ₹39.2. At 45 times, the price would be about ₹1,764, around 5% below today. At 57 times, it would be about ₹2,234, around 20% above. The lesson is that the investment case needs two things to go right at once: earnings must deliver, and the market must keep paying a high multiple for them. Missing either one can hurt.

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A great company can still be a poor investment at the wrong price.

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07 The 12 November checklist

Eight reference points to tick off when results arrive on 12 November.

Results are due on 12 November. Rather than react to the headline, compare the new figures with a few fixed reference points. Tick each box as you check it. The boxes are interactive in Word.

The comparison base is Q2 FY26: revenue of ₹382 crore, EBITDA of ₹39 crore and profit after tax of ₹25 crore.

☐ Revenue. If revenue merely matches Q1’s ₹484 crore, that is already about 27% growth over the ₹382 crore base. At 30% it would be about ₹497 crore; at 40%, about ₹535 crore.

☐ EBITDA margin. Q1 delivered 12.0%. At that margin, ₹484 crore of revenue gives about ₹58 crore of EBITDA, roughly 49% above last year’s ₹39 crore.

☐ Profit after tax. At a 7.2% margin on ₹484 crore, profit would be about ₹35 crore, around 40% above last year’s ₹25 crore.

☐ Gross margin. Guidance is 33–35%. Q1 was 34.7%, near the top, so watch for any slippage.

☐ US losses. The loss was about ₹4 crore in Q1. A further narrowing supports the break-even target for the end of FY27.

☐ Order book. Q1 stood at ₹2,208 crore. A rise confirms demand; a drop deserves a question on the call.

☐ Guidance. The FY27 revenue range is 26–30%. Was it kept, raised or trimmed?

☐ Cash and working capital. Did operating cash flow stay positive, and did the improving working-capital trend continue?

Markets often react to what was expected as much as to what was reported. The stock fell about 5.3% in a single session earlier this week, so even good numbers can meet a cautious reception.

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08 Risks, ranked honestly

The eight things that could genuinely hurt, in order of importance.

Every investment has risks. The useful question is which ones could actually hurt this particular stock. Here they are, from most to least important in our view.

1. Valuation. At about 93 times trailing earnings, the stock leaves little room for disappointment. A modest miss can cause a large price fall, as the scenarios in Section 06 show.

2. Concentration and trade policy. About 59% of revenue comes from US customers, and US manufacturing is a growing part of the business. Changes in tariffs or trade rules affecting Indian-sourced electronics are a live concern for the sector.

3. Margin pressure. Gross margin slipped from 35.5% to 34.7% year-on-year. If input costs or customer mix turn unfavourable, the 12% EBITDA margin could come under strain.

4. Lumpy segments. Clean energy grew 141% but management calls it volatile, and communication fell about 40% in the same quarter. A segment that grows fast can also shrink fast.

5. The order book lag. Order book growth of 23.4% is well below revenue growth of 49.8%. If the gap persists, revenue growth may eventually slow toward the order book’s pace.

6. Funding growth. Gross debt rose from ₹134 crore to ₹196 crore. This is modest for now, but a business growing this fast needs capital, and that has a cost.

7. Execution on the US turnaround. The loss has narrowed sharply, but break-even is a target, not a result. A delay would weigh on profit growth.

8. Price volatility. The stock has ranged from ₹777 to ₹2,618 in a year. If a 5% move in one day would upset you, position size accordingly.

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Risk is not what you expect to happen. It is what you have not planned for.

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09 Three futures: bull, base and bear

Illustrative ranges built on guidance and stated assumptions, not predictions.

Rather than forecast a single outcome, it is more honest to sketch a range. The figures below are illustrations built on guidance and stated assumptions, not predictions.

Bull case

Growth lands at the top of guidance, 30%, taking FY27 revenue to about ₹2,084 crore. The US business reaches EBITDA break-even and margins edge up to around 12.5%. EBITDA would be about ₹260 crore. In this world the order book keeps growing and the market keeps its premium.

Base case

Growth comes in near 27%, giving revenue of about ₹2,036 crore, with margins holding near 12%. EBITDA would be about ₹244 crore. The company delivers what it says; the share price then depends mostly on whether the multiple stays where it is.

Bear case

Growth slows to about 15%, for revenue of about ₹1,844 crore, as clean-energy orders pause and trade friction bites. Margins slip to about 10.5%, giving EBITDA of about ₹194 crore, nearly 20% below the base case. A company in this situation often sees its multiple fall at the same time, which compounds the damage.

Read-across

The gap between bull and bear EBITDA is about ₹66 crore, which is large for a company of this size. That gap is why position size and patience matter more here than any single prediction.

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10 Putting it into practice

Position size, patience and costs matter more than any single prediction.

Who this stock may suit

A stock like this tends to suit investors who can hold through volatility for several years, who understand that high growth comes with a high price, and who are comfortable with a smaller position in a small-cap name. It tends to suit people less who need steady returns, who cannot tolerate a 20–30% drawdown, or who are looking for a quick result around the earnings date.

Worked example · building a position in steps

Suppose you decide to invest ₹60,000 in two equal tranches of ₹30,000. At ₹1,855, the first tranche buys 16 shares for ₹29,680. If the price later dips to ₹1,650, the second buys 18 shares for ₹29,700. You now own 34 shares at an average cost of about ₹1,746, lower than the first price you paid.

The method does not predict the market. It simply reduces the risk of committing everything at a poor moment. The same idea also works in the other direction: had the price risen, your average would have been higher, and you would still have the position.

Worked example · what trading costs really are

Suppose you invest ₹1,00,000 and later sell. If your broker charged 0.3% on each side, brokerage alone would be ₹300 on the buy and ₹300 on the sell, or ₹600 in total. With ₹0 brokerage on equity delivery, that ₹600 stays with you. Statutory charges, such as securities transaction tax, exchange fees, GST and stamp duty, still apply with every broker, so “zero brokerage” never means “zero charges”.

A short pre-investment checklist

☐ I have read the company’s own results and presentation, not only this guide.

☐ I know what share of my portfolio this position will be, and I am comfortable losing a quarter of its value.

☐ I have decided whether I am investing for years or trading around an event.

☐ I understand what the quoted P/E is built on and what it implies.

☐ I have a plan for what would make me sell, written down before I buy.

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11 Your next step with Brokerage Free Investments

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Whether or not Avalon ends up in your portfolio, the habit this guide tries to teach is the one that lasts: check the numbers, understand the price, size the position and keep costs low.