Sharescart Research Club logo ×
Screener Research Unlisted Startup Funding New IPO New

KFO    


Nashik, India

KFO do only fundamental based research for Investors. Our belief is in the top down approach and fundamentally strong company and industry .

Read More..
Contributor since: 2022

25

Articles

6

Likes

2

Followers

AVALON

Comments: 0 | Likes: 0 | Current Price: ₹ 515


A Detail Research Report on Avalon Technologies Limited

A Detail Research Report on Avalon Technologies Limited with the tagline Manufacturing your Success


AVALON TECHNOLOGIES  LIMITED

Recommendation:  Buy

CMP:  Rs. 473/-                             TARGET: Rs.663 /-

SENSEX: 71555 /-                                NIFTY:  21743/-

KEY STOCK STATISTICS:

Market Capitalization (crs): 3104 /-

Book Value: Rs.81.20 /-

Face Value: Rs.2 /-

52 week High/Low:  732/347

P/E Ratio: 71.10

Industry P/E: 39.45

P/BV: 4.72

Dividend Yield: 0.00/-

Company Background:

1. Incorporated in 1999, Avalon Technologies Limited is a leading fully integrated Electronic Manufacturing Services ("EMS") company with end-to-end capabilities in delivering box-build solutions, focusing on high-value precision-engineered products.

2. They provide a full stack product and solution suite, from printed circuit board (“PCB”) design and assembly to the manufacture of complete electronic systems (“Box Build”), to global OEMs across the United States, China, Netherlands, and Japan.

3.  Avalon is one of the leaders in high mix, flexible volume product manufacturing segment and specializes in manufacturing and providing design support for critical integrated assemblies, sub-assemblies, components, and enclosures for multiple industry verticals.

4.  Company has 14 manufacturing units located across the United States and India.

Shareholding Pattern(%):

Source: Company, KFO Research

FUTURE OUTLOOK:

We are well-positioned to operate successfully inboth these regions. We operate today by choicein high complex, high margin B2B space. India isespecially at an inflection point, which is set to expand the country’s market share in the global EMS sector from 2.2% to 7% by 2026. In India, we see phenomenal opportunities, both interms of manufacturing and customer base. Several product and design centres are commencing in India, setting the stage for growth in the next three years. We are also seeing global companies exploring India as an alternate supply chain destination to China.Indian companies too are favouring Indian suppliers instead of Chinese suppliers. The favourable policy scenarios in both the US andIndia, work to our advantage. Our manufacturing presence in these locations positions us well to leverage the benefits of both places and provide our customers with significant value in terms of cost arbitrage, quality and supply reliability. We have further embarked on the addition of two manufacturing units in Chennai. This expansion marks a significant milestone in our quest to cater to the evolving customer needs while bolstering our position in the global market.

Source: Company, KFO Research 

INDUSTRY OUTLOOK

Global EMS Industry : The Electronics Manufacturing Services (EMS) market has been growing steadily in recent years due to the increasing use of electronic devices across the world. The EMS market was worth approximately USD 880 Billion in 2021. It is expected to grow at a rate of 5.4% and reach USD 1,145 Billion by 2026.

Indian EMS Industry : The Indian EMS market was estimated at USD 20 Billion in the fiscal year 2021-22. The market is expected to grow rapidly at an annual rate of 32.3% and reach USD 80 Billion by FY 2025-26. The Indian EMS industry is an important part of the country’s larger electronics ecosystem. India stands out in the EMS sector with impressive growth and unique competitive strengths. Over the last ten years, the Indian EMS industry has gained significant prominence. The strong expansion of India’s electronics industry is mainly due to the high demand for electronic products within the country. This demand is driven by factors like increasing incomes, quicker replacement cycles for products, the rise of remote work culture, and favourable tax structures. Government projects such as nationwide broadband connectivity, rural electrification, renewable energy initiatives, and e-governance programmes also contribute to the demand. The growth of renewable energy infrastructure and energy-efficient portable electronic components will further accelerate market expansion.

Source: Company, KFO Research

Growth Drivers:

1. Only India EMS player to have full-fledged manufacturing facilities in the US.

2.  Major wins in US and India across sectors such as Power, Industrial, Clean energy, Automotive and Rail.

3.  Avalon is now a strategic manufacturing partner for C-DAC, playing a pivotal role in advancing India's capabilities in High Performance Computing, through the 'RUDRA' program.

4.  Successfully delivered the first wiper blade assembly sample, marking a key milestone in the Aerospace segment.

5.  One new manufacturing plant at Chennai is set to go live by Q1 FY25.

6. For addressing our increasing domestic business, we are planning to expand our existing facilities.

7. EMS market is poised for a robust growth across industries. India showcases unique competitive strengths.

8. Sunrise sector - Partner with emerging pioneers. Eg: Clean energy technology companies.

9. Established businesses – Collaborate, Grow wallet share via up-selling & cross-selling.

10. Win using integrated capabilities. For eg: Start with design services and reach box build.

11.  India plans to install 450GW of renewable energy capacity by 2030.

BUSINESS HIGHLIGHTS 

PROS

· Company has reduced debt.

· Company has a good return on equity (ROE) track record: 3 Years ROE 27.8%

CONS

· Though the company is reporting repeated profits, it is not paying out dividend

· Company's cost of borrowing seems high.

Source: www.screener.in 

VALUATIONS:

On the basis of EPS Multiple Method, we are recommending ‘Buy’ for the stock. Since the stock offers good opportunity, we initiate a ‘BUY’ signal on the stock with 12-month price target of Rs 663/- share an upside of  39.87 % from current levels.

PEER COMPARISON : 

BALANCE SHEET (RS. IN CRORES):

CASH FLOW STATMENT ( RS. IN CRORES):

PROFIT AND LOSS ACCOUNT (RS.IN CRORES):

Source: www.sharescart.com

Disclosure:

I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Business relationship disclosure:

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Stocx Research Club). I have no business relationship with any company whose stock is mentioned in this article.

Disclosure legality:

I am not a SEBI Registered individual/entity and the above research article is only for educational purpose and is never intended as trading/investment advice.

Articles

Updated : Apr, 2024

The Rise of Digit Insurance and Its Journey

Mr. Kamesh Goyal founded Digit Auto Insurance in 2016. The company, Digit Insurance, focuses on streamlining insurance procedures and providing quick claim settlements. It is India's first digital general insurance provider.

Author : Nikhil Singh

Updated : Apr, 2024

Nifty gained almost 30% in FY24 on positive global c...

Depending on likely poll outcome and various scenarios, Nifty may scale 23500-24500 by FY25, while may also correct to 20300-19500 (if BJP fails to get min 273 seats alone)

Author : Ashish Ghosh

Updated : Apr, 2024

Equity Research: Honasa Consumer Ltd.

Honasa Looks attractive with higher growth potential and increasing CAGR.

Author : Shalom Martin

Updated : Apr, 2024

USDINR may scale 86 soon as RBI may shift stance and...

RBI has to lower borrowing costs of the government/economy to promote double-digit GDP growth for the next 25 years with below 4% core CPI

Author : Ashish Ghosh

Updated : Mar, 2024

Fino Paytech Ltd: Revolutionizing Financial Inclusio...

Financial services provider Fino Ltd. is involved in a number of industries. A division of Fino Ltd, Fino Payments Bank Ltd provides a variety of financial services and products, including internet banking, savings accounts, loans, credit and debit car...

Author : Nikhil Singh

Updated : Mar, 2024

Nifty under stress on electoral bond scam despite Mo...

Although Modi-3.0 is still almost certain, looking ahead Modi-4.0 may be tough if India’s real economic issues can’t be properly resolved

Author : Ashish Ghosh

Updated : Feb, 2024

A Detail Research Report on Avalon Technologies Limi...

A Detail Research Report on Avalon Technologies Limited with the tagline Manufacturing your Success

Author : KFO

Updated : Jan, 2024

Apollo Micro Systems Ltd.: Innovation in Aerospace a...

In the nexus of technology and national security, Apollo Micro Systems Ltd. is a standout, specializing in electronic and electromechanical solutions for aerospace and defense. With a market cap of ₹3,013 Crores, this small-cap company navigates the ...

Author : Nimish Maheshwari

Updated : Sep, 2023

Kaynes Technology India Limited looks strong for fur...

Kaynes is expected to see a strong growth due to Favourable industry tailwinds, development of component/chips ecosystem in India leading to improving supply chains, in turn benefiting Indian EMS companies in terms of margins and working capital improv...

Author : Shalom Martin

Updated : Apr, 2023

Syrma SGS Technology Ltd

A Business Analysis

Author : Meghna Rathod

Updated : Sep, 2022

Equity Research Report - SURANA SOLAR LIMITED

Surana Solar Limited manufactures Solar Energy Systems with the focus on solar Photovolatic PV Modules.

Author : KFO

Updated : Jun, 2022

Equity Research Report: Sakar Healthcare

Sakar Healthcare Ltd is engaged in manufacturing of pharmaceutical formulations in the form of liquid injectables, tablets/ capsules, oral liquid syrups, dry powder injectables and syrups. Presently, its domestic sales accounts for 31% of revenues and ...

Author : Akshita

Updated : Jun, 2022

EQUITY RESEARCH REPORT: NEWGEN SOFTWARE

Newgen Software Technologies is a global software Company and is engaged in the business of software product development including designing and delivering end-to-end software solutions covering the entire spectrum of software services from workflow au...

Author : Akshita

Updated : Jun, 2022

Nifty and Bank Nifty Tumbles Due to Weak Global Cues...

Nifty and Bank Nifty tumbles due to weak global cues lead by higher inflation data, higher crude oil prices and weakening currency.

Author : Shalom Martin

Updated : Jun, 2022

Equity Research Report: Shree Renuka Sugar

Shree Renuka Sugars is a global agribusiness and bio-energy corporation. The Company is one of the largest sugar producers in the world, the leading manufacturer of sugar in India, and one of the largest sugar refineries in the world.

Author : Akshita

Updated : Jul, 2022

Equity Research : Tata Consumer Products Limited

TCPL future ambitions remain aggressive, At 17% EPS CAGR over FY22-25e, TCPL should deliver industry-leading growth within indian FMCG.

Author : Shalom Martin

Updated : Jul, 2022

Equity Research: Birlasoft Ltd

Birlasoft, a small-cap IT company, has an upside potential of 35%. The company’s repeated demonstration of ‘walking the talk’ makes us believe that it is on track to achieve its stated target of USD1bn revenue by FY25E.

Author : Shalom Martin

Comments

IPO

Companies Open Date Close Date Issue Price Cost of 1 Lot GMP Expected Listing Listing Gain(%) Listing Price Current Price Type Exchange

View more.....

Companies Open Date Close Date Issue Price Cost of 1 Lot GMP Expected Listing Listing Gain(%) Listing Price Current Price Type Exchange

View more.....

Companies Open Date Close Date Issue Price Cost of 1 Lot GMP Expected Listing Listing Gain(%) Listing Price Current Price Type Exchange

View more.....

Companies Open Date Close Date Issue Price Cost of 1 Lot GMP Expected Listing Listing Gain(%) Listing Price Current Price Type Exchange

View more.....

Companies Open Date Close Date Issue Price Cost of 1 Lot GMP Expected Listing Listing Gain(%) Listing Price Current Price Type Exchange

View more.....