Avalon Technologies (AVALON IN) – Q3FY26 Result Update – Tariff overhang eases; growth visibility strong – BUY
Published on 06 Feb 2026
Avalon Technologies (AVALON IN) has reported robust revenue growth of 48.7% YoY mainly driven from Mobility/Industrial segments (grew by ~72%/59% YoY). EBITDA margin contracted by healthy ~80bps YoY to 11.5%, (Mobility/industrials contributes 27%/37% to the revenue). AVALON has upward its guidance from 28-30% to 40% growth in topline for FY26 and maintained its gross margin to 33-35%. AVALON is well-positioned for long-term growth, with its recent semiconductor equipment wins aligning with the government’s ISM 2.0 initiative. Additionally, the reduction of US tariffs from 50% to 18% enhances India’s competitiveness and strengthens the company’s US export business. We estimate Revenue/EBITDA/PAT CAGR of 27.7%/34.8%/36.5% over FY26-28E, with EBITDA margin expansion of ~120bps. We maintain our ‘BUY’ rating with a TP of Rs 1,175 valuing at 40x Mar’28 earnings, healthy performance in 9MFY26. We have revised our FY27/FY28 EPS estimates upward by 7.2%/5.8%. Maintain ‘BUY’.
