Avalon Technologies (AVALON) Q3 25/26 earnings summary

Executive summary

• Achieved sixth consecutive quarter of growth and performance improvement, with highest-ever revenue and profit after tax in Q3 FY 2026, driven by strong India and US operations.

• India manufacturing delivered 16.7% EBITDA and 11.9% PAT in Q3 FY26, reflecting operational efficiency.

• Revenue from Industrial, Clean Energy, Rail & Aero verticals in 9M FY26 exceeded FY25, indicating diversified growth.

• Benefited from reduced US tariffs and supportive government policies in India, particularly ISM 2.0.

• Unaudited standalone and consolidated financial results for Q3 and nine months ended December 31, 2025, were reviewed and approved by the Board and Audit Committee.

Financial highlights

• Q3 FY26 consolidated revenue was INR 418 crores (₹4,175.42 million), up 48.7% year-on-year; nine months FY26 revenue reached INR 1,123 crores (₹11,233.14 million), up 48.7% year-on-year.

• Q3 FY26 gross margin at 34.2%, EBITDA margin at 11.5%, and PAT margin at 7.7%; nine months FY26 gross margin at 34.6%.

• Q3 FY26 consolidated net profit was ₹326.02 million, up from ₹239.89 million in Q3 FY25; Q3 PAT was INR 33 crores.

• Order book as of Dec 31, 2025, stood at INR 2,016 crores, up 26.5% year-on-year, with long-term contracts at INR 1,183 crores.

• Net working capital days improved to 118 from 150 year-on-year, and by 13 days sequentially.

Outlook and guidance

• FY 2026 revenue growth guidance revised upward to around 40%.

• Management remains conservative in guidance due to program timing and external uncertainties.

• ISM 2.0 aligns with recent wins in semiconductor equipment manufacturing for Industry 4.0 systems.

• FY 2027 outlook to be shared after budgeting exercise next quarter.

• The impact of new Labour Codes effective November 21, 2025, has been recognized, though not material; further evaluation will occur as rules are notified.