Avalon Q3 Results Review - Challenges Within The U.S. Business Drag Overall Performance: Motilal Oswal

Motilal Oswal Report

Avalon Technologies Ltd. reported a weak quarter with a revenue decline of 8%/3% YoY in Q3 FY24/nine months FY24, led by a continued slowdown in the U.S. business (reported a loss of ~Rs 200 million in nine months FY24). However, the India business registered a growth of 12% in nine months FY24.

The order book showed some resilience with order inflows of ~Rs 2.45 billion across sectors (such as power, industrial, clean energy, automotive and railways). The inflows led to an increase in the closing order book to Rs 12.75 billion as of December-23 (versus ~Rs 12.4 billion/Rs 11 billion in September- 23/June-23).

Factoring in the weak Q3 FY24 performance and a slowdown in the U.S. business that led to an operating deleverage, we reduce our earning per share estimates for FY24/FY25/FY26 by 44%/25%/19%.

Reiterate 'Buy' with a target price of Rs 610 (premised on 35 times FY26E EPS).

Click on the attachment to read the full report:

DISCLAIMER

This 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.