Avalon Technologies had a flat debut on the bourses on April 18, 2023 at ₹431 per share against the IPO price of ₹436, which is at a marginal discount of 1.14 per cent.

The stock corrected further post listing and at the time of publishing, this was trading at around ₹397, which is 8.9 per cent lower than the issue price.

At the issue price of ₹436, the IPO was priced at 47.65 times FY23 PE (8 months earnings annualised), while not expensive when compared to peers, was not cheap either at an absolute level, given the economic uncertainties in its export markets. In our IPO research note dated April 2, 2023, we recommended our readers wait and watch and not rush to subscribe.

The stock at the current levels still trades at 43.4 times FY23 PE (8 months earnings annualised). The fundamentals of the company look decent but its current valuation does not offer much margin of safety, and hence investors must continue to wait and watch.


The company is an EMS player involved in providing end-to-end solutions in delivering box-build solutions to original equipment manufacturers (OEMs).

The core competency of the company includes PCB (printed circuit board) assembly design and assembly, cable assembly and wire harnesses, sheet metal fabrication and machining, magnetics, injection moulded plastics, and end-to-end box build of electronic systems.

The company is involved in manufacturing components for Industrial use and not consumer capital goods. This gives the company an edge and places it in a niche segment. Avalon Technologies is a high-mix and flexible volume player which means it produces a high variety of products in defined quantities i.e., it follows make-to-order operations.

The company serves a variety of segments, including power, clean energy, railways, aerospace, and medical industries. The company has a total of 12 manufacturing facilities in India and the US. The facilities in India are in Chennai and Bengaluru. Some of its eminent clients are Kyosan, Collins Aerospace, Atos, Cummins, and Faiveley Transport.


Avalon Technologies has reported a decent set of numbers over the past few years. Revenue grew at a CAGR of 14.45 per cent during FY20-FY22 whereas EBITDA for the same period grew 23 per cent.

Revenue for eight months ending November 2022 is ₹584.7 crore which is 8 per cent higher y-o-y, and EBITDA for the same period is ₹ 68.05 crore, which is 16.2 per cent higher y-o-y.

EBITDA margin has stayed in the range of 9.5-12 per cent during FY20-FY22 and for eight months ending November 2022, it was 11.64 per cent, which is marginally higher than the same period the previous year.

The company has close to 52 per cent of its revenue coming from the US and therefore the impending global slowdown may pose some risk. For now, investors must look for clarity on how revenue and margins trend over the next few quarters and wait for more attractive entry points.