2 weeks Ago By Moneycontrol
Motilal Oswal's research report on Avalon Technologies Avalon is uniquely placed in the Indian electronics manufacturing services (EMS) sector with its well-established manufacturing presence in the US. Moreover, the company serves various emerging and fast-growing end-user industries such as clean energy, mobility and medical technology across the globe, which cumulatively accounted for ~62% of Avalon’s total revenue as of 9MFY25 (vs. ~59% as of FY24).
Amid the current uncertain global environment where many countries are facing a major threat to their trading prospects due to US tariffs, India is believed to be in a favorable situation. After the Trump administration’s decision to pause tariffs on all countries, except China, which is facing an exorbitant tariff of 245% on its exports to the US, the EMS sector may see a gradual shift of some business from China to India in the mid to long term. China exported ~20% of total electrical machinery to the US as of CY24 vs.
India’s 1.7%. Even if India is imposed with a proposed tariff of 26%, it will be lower than the proposed tariffs on India’s key competitors, like China (245%), Vietnam (46%) and Taiwan (32%), in the EMS sector.
This will present an opportunity for Indian EMS companies, especially for Avalon due to its well-established US plant. Outlook We estimate Avalon to post a CAGR of 30%/57%/80% in revenue/EBITDA/adj. PAT over FY24-27, driven by strong growth and healthy order inflows.
Reiterate BUY with a TP of INR970. For all recommendations report, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management.
Moneycontrol.com advises users to check with certified experts before taking any investment decisions. Avalon Technologies - 17042025 - moti.
