Avalon Technologies (AVALON) Q2 25/26 earnings summary

Executive summary

• Achieved robust sequential and year-over-year growth, with H1 FY26 revenue up 48.7% and EBITDA up 98.5%.

• India and U.S. businesses grew 54% and 52% respectively in H1 FY26, with India manufacturing contributing 81% of Q2 FY26 revenue and U.S. 19%.

• Order book as of September 2025 stood at INR 1,863 crore (14-month execution), up 25.4% year-over-year, with long-term contracts at INR 1,168 crore.

• Progressed in semiconductor equipment manufacturing, secured a major industry partnership, and commenced production at export-focused Chennai plant.

• Received supplier of the year award from a leading railway OEM and achieved AS9100D aerospace certification.

Financial highlights

• H1 FY26 revenue: INR 706 crore, up 48.7% year-over-year; Q2 FY26 revenue: INR 382 crore, up 39.1% year-over-year and 18% sequentially.

• H1 FY26 EBITDA: INR 68 crore, up 98.5% year-over-year; Q2 FY26 EBITDA: INR 39 crore, up 28% year-over-year.

• H1 FY26 PAT: INR 39 crore, up 158.3% year-over-year; Q2 FY26 PAT: INR 25 crore, up 42.9% year-over-year.

• Gross margin for H1 FY26: 34.9%; Q2 FY26: 34.3%, at the upper end of the guided range.

• ROCE improved to 18.4% from 8.2% a year ago; asset turns at 8.7x.

Outlook and guidance

• FY26 revenue growth guidance raised to 28%-30% on strong demand visibility and order pipeline.

• EMS industry in India expected to grow at a 27% CAGR, with India’s share of global ESDM market projected to rise from 4% in 2024 to 10% by 2030.

• Focus remains on operational efficiency, working capital management, and scaling new programs.

• Targeting a balanced 50/50 revenue mix between India and exports in the medium term.

• Committed to doubling revenue every three years, with internal targets set higher.