Avantel Ltd.
EPS up by 300% in 3 years!
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1. Key Highlights:
2. Company Chart Analysis:
*Comparison charts are Indexed*
Avantel limited Performance
Avantel limited Vs. NSE Nifty
Avantel limited Vs. NSE Nifty Smallcap
3. About the Company:
Avantel Limited, founded in 1990, is an Indian defense and telecom technology firm with nearly three decades of expertise in designing, manufacturing, and integrating high-end communication systems. The company holds ISO 9001, AS9100, and ISO 27001 certifications, reflecting its strong focus on quality, aerospace standards, and information security.
With in-house R&D centers in Visakhapatnam and Hyderabad, they develop RF and microwave subsystems, embedded and signal-processing platforms, network-management software, and satellite communication (SatCom) products. Avantel serves both military and commercial sectors, working with clients like ISRO, DRDO, the Indian Navy and Air Force, and even Lockheed Martin.
3.1 Business Segments:
1. Satellite Communication Systems (SatCom): Avantel is a leading provider of Mobile Satellite Services (MSS) solutions in India.
2. Wireless Communication & Signal Processing Solutions: This segment focuses on the development of high-performance RF and microwave subsystems for military-grade communication.
3. Embedded Systems & Network Management Software: Avantel designs embedded hardware and software platforms tailored for defense and aerospace applications.
4. Aerospace and Defense Equipment Integration: Avantel integrates communication systems into broader defense platforms such as aircraft, ships, and ground vehicles.
5. Healthcare Services (Minor Segment): It offers telemedicine systems and related communication infrastructure that can connect patients in remote areas with healthcare professionals.
3.2 Product and Services Offerings:
4. Management Overview:
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5. Revenue Breakdown:
6. Company’s Financial Analysis:
6.1 REVENUE:
The Revenue has grown at a CAGR of ~31.42% in the past 7 years.
The Company’s revenue and margins appear inconsistent due to the project-based nature of its business, where order inflows, execution timelines, and product mix vary significantly from quarter to quarter and year to year. Here's a concise explanation:
Project-Based Revenue Cycles: Revenue depends on large defence and government contracts (like Indian Railways, Indian Navy, ISRO, NSIL), which are lumpy, often delayed, and subject to tender-based execution—causing uneven revenue recognition.
Varying Product Mix: Different projects have widely varying margin profiles. For example, satcom terminals and railway RTIS units have higher hardware and material costs, lowering margins, while software-defined radios (SDRs) and IP-driven products have higher margins but longer development cycles.
Working Capital Volatility: Defence projects often require advance inventory buildup and longer payment cycles, leading to temporary spikes in working capital and finance costs, which compress margins in certain quarters.
Capex and Scaling Phases: The company is in an expansion phase—investing in new facilities, medical tech (IMAX), and R&D-heavy products like SDRs and satellite subsystems. These costs precede revenue realization, causing margin fluctuations.
6.2 GROSS PROFIT:
The Gross Profit has grown at a CAGR of ~34.34% in the past 7 years. In the past, the margin has improved on account of lower Material costs.
We expect the margin to stay stable in the range of 73.5-75.5%.
6.3 EBITDA:
EBITDA has grown at a CAGR of 37.2% in the past 7 years. Even though the margin has improved on account of growth in Gross Margin, increasing, employee costs have gone from 17% in FY19 to 21% in FY25.
The positive side is that S&A has reduced from 16% in FY19 to 5% in FY25. The management expects the EBITDA Margin to stay in the current range.
6.4 Net Profit:
Net Profit has grown at a CAGR 39.2% in past 7 years.
6.5 Balance Sheet:
6.6 Common-Size Balance Sheet:
6.7 Cash Flow Analysis:
6.8 Cash Conversion Cycle:
7. KEY RATIOS:
8. Shareholding Pattern:
No holdings with FIIs or DIIs.
9. Concall Analysis—Q4FY25:
Not Available!
10. SWOT ANALYSIS:
11. Growth Drivers:
12. Competitors in the Market:
1. Bharat Electronics Limited (BEL) – Public Sector Undertaking (PSU)
Core Focus: Defence electronics, radar systems, sonar, communication systems, avionics, EW systems.
Key Clients: Indian Army, Navy, Air Force, ISRO, DRDO.
Highlights: Flagship DPSU with manufacturing across India; also expanding into smart cities, solar, and cybersecurity.
2. Data Patterns (India) Ltd – Private
Core Focus: High-end defence electronics for mission-critical systems like radars, missiles, and satellites.
Key Strengths: Indigenous development with 100% in-house design and manufacturing.
Clients: DRDO, ISRO, HAL, BrahMos, armed forces.
3. Astra Microwave Products Ltd – Public
Core Focus: RF and microwave systems for space, radar, and communication-based defence systems.
Specialties: Subsystems for satellite communication, antenna systems, radar subsystems.
Clients: DRDO, ISRO, BEL, foreign defence OEMs.
4. Paras Defence and Space Technologies Ltd – Private
Core Focus: Defence optics, EW testing systems, UAVs, military electronics, and rugged embedded systems.
Strengths: Diversified into drone tech, AI-based surveillance, and components for industrial automation.
Clients: DRDO, BEL, Indian armed forces, and private players.
5. HFCL Limited (Himachal Futuristic Communications Ltd) – Public
Core Focus: Telecom and defence communication systems, optical fibre cables, radio systems, IoT-based industrial solutions.
Defence Relevance: Developing secure communication networks, defence-grade routers, and optical transmission systems.
Industrial Expansion: Moving into IoT solutions for railways, smart cities, and smart manufacturing.
Thank You So Much For Reading!!
Researched By- Naresh, Mayank and Vaibhav
All information is sourced from the company's annual reports, Press Release, News Articles, GoIndiastocks.in, Screener.in, industry reports and Economy Outlook reports.
Disclaimer: We do not recommend buying or selling any stock. You should consult your financial advisor before buying or selling any financial instrument.
We are Proud to Announce Our New Launch of the Premium services where we Deep-dive into the Business and back you up with Robust Research.
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