Avalon Technologies: HOLD Rating Upheld! Brokerage Boosts FY26 Guidance – Will It Soar?

Avalon Technologies has announced impressive revenue growth of 39.1% year-over-year (YoY), primarily fueled by its Mobility (up ~29% YoY) and Industrial (up ~65% YoY) segments. The company's EBITDA margin saw a slight contraction of approximately 90 basis points YoY, settling at 10.1%, as domestic manufacturing increased to 81% of revenue. Despite this, Avalon Technologies has positively revised its revenue growth guidance for FY26 upwards to 28-30% (from 23-25%) and maintained its gross margin outlook at 33-35%.

Prabhudas Lilladher expects revenue, EBITDA, and PAT to grow at a Compound Annual Growth Rate (CAGR) of 30.7%, 36.0%, and 42.5% respectively between FY25 and FY28, forecasting an EBITDA margin expansion of about 130 basis points during this period. The brokerage firm maintains its 'HOLD' rating on the stock with a price target (TP) of Rs 1,083, valuing Avalon Technologies at 45 times its projected earnings for September 2027, reflecting confidence in its performance.

**Impact** This research report provides crucial insights for investors holding or considering Avalon Technologies. The upgraded guidance and maintained 'HOLD' rating suggest stability and potential for moderate growth, influencing investment decisions within the industrial manufacturing sector. **Impact Rating:** 6/10

**Difficult Terms Explained**: * **YoY**: Year-over-Year. Compares a period's data to the same period in the previous year. * **EBITDA**: Earnings Before Interest, Taxes, Depreciation, and Amortization. A measure of operational profitability. * **EBITDA Margin**: EBITDA divided by revenue, showing operational efficiency. * **Basis Points (bps)**: A unit equal to one-hundredth of a percent (0.01%). 90 bps = 0.90%. * **CAGR**: Compound Annual Growth Rate. The average annual growth rate over multiple years. * **PAT**: Profit After Tax. The net profit remaining after all expenses and taxes. * **Price Target (TP)**: A forecast by analysts of a stock's future price.