Company Update : Avalon Technologies Ltd by Motilal Oswal Financial Services Ltd
Operating performance in line
Earnings beat estimates due to higher other income
* 2QFY26 consolidated revenue grew 39% YoY to INR3.8b (est. INR3.3b).
* EBITDA margin contracted by 90bp to 10.1% (est. 11.1%) largely due to a reduction in gross margins (down 250bp to 34.3%) and increase in employee expenses (employee cost as % of sales rose to 18.3% from 17.0% in 2QFY25). While other expenses as % of sales stood at 6% vs. 9% in 2QFY25. EBITDA grew 28% YoY to INR386m (est. INR367m).
* Segmental mix for clean energy/Mobility/Transportation/Industrials/ Communication/Medical and Others stood at 18%/27%/34%/10%/11% in 2QFY26 compared to 20%/27%/30%/8%/15% in FY25.
* Adj. PAT grew 43% to INR250m (est. INR232m).
* For 1HFY26, revenue/EBITDA/adj. PAT grew 49%/99%/2.6x to INR7.1b/INR685m/INR392m.
* Gross debt stood at INR1.6b as of Sep’25 vs. INR1.8b as of Mar’25. Further, the company reported a cash outflow of INR101m as of Sep’25 vs. CFO of INR187m as of Sep’24.
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