Avalon Technologies Q3 Results Review: Systematix Upgrades Both Rating And Target Price — Here's Why

After a 16% YoY rise in revenue in 9M, Avalon has upped growth guidance for FY25 to 22-24% from 16-18% earlier. Guidance of doubling revenue in the next three years is also intact..NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Systematix Research Report.Avalon Technologies Ltd.’s healthy uptick in Q3 FY25 Ebitda margin (12.3%, up 462 bps YoY and 137 bps QoQ) for the second quarter in a row provides better confidence in the management guidance given earlier. In Q3, revenue/Ebitda/PAT surged 31%/110% /265% YoY, albeit on a low base. Overall performance was driven mainly by healthy recovery in the U.S. business (India/US revenue grew 17%/43% YoY and 5%/0% QoQ), as guided by the management. India manufacturing representing 88% of revenue, delivered healthy margins of 15% Ebitda and 10.8% PAT. Operating leverage benefits and cost optimization programs (mainly in USA as loss reduced to Rs 34 million after a Rs 180 million loss in H1) has led to expansion in margins. Net working capital improved by 11 days to 150 days in Dec-24 from 161 days in March 2024. After a 16% YoY rise in revenue in 9M, management has upped growth guidance for FY25 to 22-24% from 16-18% earlier. Guidance of doubling revenue in the next three years is also intact. Gross margin guidance has also risen to 34-36% for FY25 (from 33-35% earlier). It aims India revenue mix (42% in Q3) to rise to 50% in coming years and targets return on capital employed to get back to 20%+ in coming years. After a healthy margin uptick in Q3, we increase our earnings estimates by 31% in FY25 and ~14% in subsequent years on better revenue and margins estimates. We now expect 32%/58%/74% CAGR in revenue/Ebitda/PAT over FY24-27E, with ~22%/24% RoCE/RoIC in FY27E. After the recent correction in stock price, we upgrade rating to Hold (from Sell earlier) with a revised target price of Rs 786 (35x FY27E P/E, earlier Rs 693)..Click on the attachment to read the full report:.Trent Q3 Results Review: Systematix Maintains 'Hold' On The Stock, Lowers Target Price — Here's Why.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Avalon Technologies Q3 Results Review: Systematix Upgrades Both Rating And Target Price — Here's Why

After the recent correction in stock price, Systematix upgrades rating to Hold (from Sell earlier) with a revised target price of Rs 786 (35x FY27E P/E, earlier Rs 693).

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