Avalon Technologies (AVALON) Q1 25/26 earnings summary

Executive summary

• Achieved 62.1% year-over-year revenue growth in Q1 FY26, with strong contributions from both India and US markets.

• Entered the semiconductor equipment manufacturing space through a partnership with a leading global OEM, marking a strategic move into advanced segments.

• Order book grew 22.5% year-over-year to INR 1,790 crore as of June 30, 2025, with long-term contracts at INR 1,157 crore.

• Upwardly revised full-year revenue growth guidance to 23%-25%, reflecting confidence in business momentum.

• Secured key industry certifications and continued investments in capacity, talent, and inventory to support growth and new product introductions.

Financial highlights

• Q1 FY26 consolidated revenue at INR 3,233.08 million, up from INR 1,994.72 million in Q1 FY25; standalone revenue at INR 1,664.94 million, up from INR 1,167.52 million.

• Gross margin at 35.5%, a 230 bps improvement year-over-year, exceeding guided range.

• EBITDA at INR 30 crore (9.2% margin), up from INR 4 crore (2.2%) last year; PAT at INR 14 crore, compared to a loss of INR 2 crore in Q1 FY25.

• Standalone net profit for Q1 FY26 was ₹145.77 million, consolidated net profit was ₹142.14 million.

• Return on capital employed at 17.5%; asset turns at 8x.

Outlook and guidance

• Full-year revenue growth guidance raised to 23%-25% due to strong Q1 and robust order pipeline.

• Operating leverage expected to improve margins in the second half of FY26 and into FY27.

• CapEx guidance for FY26 at INR 45-55 crore, maintaining an asset-light model.

• Commitment to doubling revenues by FY27 remains intact.

• Focus on profitable growth by targeting high-margin, long lifecycle industries and leveraging integrated capabilities.