Avalon Technologies (AVALON) Q2 24/25 earnings summary

Executive summary

• Achieved highest-ever quarterly revenue of INR 275 crore in Q2 FY25, up 37% year-over-year and 38% sequentially, driven by recovery in U.S. and momentum in India.

• Order book increased by 19.4% year-over-year to INR 1,485 crore as of September 30, 2024.

• Gross margin improved to 37% in Q2 from 33% in Q1, with full-year guidance of 33%-35%.

• Manufacturing shift to India continues, with 89% of Q2 revenue from India plants, supporting higher profitability.

• Appointed new CFO, Suresh Veerappan, and completed new Chennai export plant and brownfield expansion phase one.

Financial highlights

• Q2 FY25 revenue: INR 275 crore (up 37% YoY, 38% QoQ); India: INR 113 crore, U.S.: INR 163 crore.

• Gross profit: INR 101.3 crore (36% YoY growth), gross margin at 36.8%.

• EBITDA: INR 30.1 crore (140% YoY growth), EBITDA margin at 11%.

• PAT: INR 17.5 crore (140% YoY growth), PAT margin at 6.3%.

• H1 FY25 revenue: INR 474.5 crore; gross profit: INR 167.6 crore (35.3% margin); EBITDA: INR 34.5 crore (20.3% margin); PAT: INR 15.2 crore (3.1% margin).

Outlook and guidance

• Revenue growth guidance for FY25 maintained at 16%-20%.

• Full-year gross margin expected between 33%-35%.

• Industry tailwinds from clean energy, EV, and digital infrastructure expected to drive growth.

• Operating leverage and new customer wins expected to drive sustained growth.

• CapEx guidance of INR 40-45 crore per year for the next two years, maintaining asset-light model.