Check Before You Invest : Avantel Ltd

Q: Which industry/sub-sector does Avantel Ltd belong to?

Avantel Ltd belongs to the Capital Goods & Industrial Consumables sector, operating specifically within the Defence segment.

Q: Is Avantel Ltd a good quality company?

Avantel Ltd is a good quality company, based on a consistently good multi-year financial track record. This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q: Is Avantel Ltd undervalued or overvalued?

Avantel Ltd appears Overvalued, as its key valuation ratios are higher than their past averages. Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more. Valuation Ratios. Price to Earnings, Current: 194.51, Historic Median: 46.82. Price to Book, Current: 12.28, Historic Median: 11.19. Price to Sales, Current: 19.77, Historic Median: 10.76. EV to EBITDA, Current: 78.82, Historic Median: 29.09

Q: Is Avantel Ltd a good buy now?

Avantel Ltd is a good buy now, based on strong price trend analysis suggesting prices may rise. However, you need to check its quality and valuation before making a decision

Q: Revenue growth of Avantel Ltd?

Avantel Ltd revenue growth is 11% for FY-2025, which is below its 5-year CAGR of 36.77%, indicating slower growth.

Q: Gross Profit margin of Avantel Ltd?

Avantel Ltd Gross profit margin which is the profit after deduction of direct costs, is 34.2% for FY-2025, which is above its 5-year median of 26.2%, indicating increasing margins.

Q: Operating Profit Margin of Avantel Ltd?

Avantel Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 38.38% for FY-2025, which is above its 5-year median of 32.07% indicating increasing margins.

Q: Net Profit Margin of Avantel Ltd?

Avantel Ltd Net Profit Margin is 24.11% for FY-2025, is above its 5-year median of 19.74%, indicating increasing margins. Profitability Metrics. Gross Profit Margin (%), Current: 34.2, Historic Median: 26.2. Operating Profit Margin (%), Current: 38.38, Historic Median: 32.07. Net Profit Margin (%), Current: 24.11, Historic Median: 19.74

Q: Return on Asset of Avantel Ltd?

Avantel Ltd Return on Asset is 23.05%, which is in line with its 5-year historical median of 22.76%, indicating stable asset utilization efficiency.

Q: Return on capital employed (ROCE) of Avantel Ltd?

Avantel Ltd Return on capital employed is 37.94% for FY-2025, which is in line with its 5-year historical median of 37.9%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 14%, indicating value creation.

Check Before You Invest : Avantel Ltd

Snapshot

Q.1 Which industry/sub-sector does Avantel Ltd belong to?

Avantel Ltd belongs to the Capital Goods & Industrial Consumables sector, operating specifically within the Defence segment.

Q.2 Is Avantel Ltd a good quality company?

Avantel Ltd is a good quality company, based on a consistently good multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Avantel Ltd undervalued or overvalued?

Avantel Ltd appears Overvalued, as its key valuation ratios are higher than their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios	Current	5-year Historic Median
Price to Earnings	194.51	46.82
Price to Book	12.28	11.19
Price to Sales	19.77	10.76
EV to EBITDA	78.82	29.09

Q.4 Is Avantel Ltd a good buy now?

Avantel Ltd is a good buy now, based on strong price trend analysis suggesting prices may rise. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

How has it performed on generating Profits?
By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.
How efficiently has it utilized Capital?
By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.
How is it managing its Debt?
By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Avantel Ltd?

Avantel Ltd revenue growth is 11% for FY-2025, which is below its 5-year CAGR of 36.77%, indicating slower growth.

Q.2 Gross Profit margin of Avantel Ltd?

Avantel Ltd Gross profit margin which is the profit after deduction of direct costs, is 34.2% for FY-2025, which is above its 5-year median of 26.2%, indicating increasing margins.

Q.3 Operating Profit Margin of Avantel Ltd?

Avantel Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 38.38% for FY-2025, which is above its 5-year median of 32.07% indicating increasing margins.

Q.4 Net Profit Margin of Avantel Ltd?

Avantel Ltd Net Profit Margin is 24.11% for FY-2025, is above its 5-year median of 19.74%, indicating increasing margins.

	Current Level	5-year Historic Median
Gross Profit Margin (%)	34.2	26.2
Operating Profit Margin (%)	38.38	32.07
Net Profit Margin (%)	24.11	19.74

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Avantel Ltd?

Avantel Ltd Return on Asset is 23.05%, which is in line with its 5-year historical median of 22.76%, indicating stable asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Avantel Ltd?

Avantel Ltd Return on capital employed is 37.94% for FY-2025, which is in line with its 5-year historical median of 37.9%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 14%, indicating value creation.

Q.7 Return on Equity (ROE) of Avantel Ltd?

Avantel Ltd Return on equity is 29.95% for FY-2025, which is in line with its 5-year historical median of 29.95%, indicating the business is making similar use of its shareholders capital.

Q.8 Cash conversion cycle of Avantel Ltd?

Avantel Ltd Cash conversion cycle is 151 days, above its 5-year historical median of 130 days, indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.

	Current Level	5-year Historic Median
Asset Turnover (x)	1.06	1.17
ROE (%)	29.95	29.95
ROCE (%)	37.94	37.9
Cash Conversion Cycle	151 days	130 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of Avantel Ltd?

Avantel Ltd Debt-to-Equity ratio is 0.09, which is lower the industry average of 0.09, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Avantel Ltd?

Avantel Ltd Debt to cash flow from operations is 0.42, which is at a healthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Avantel Ltd?

Q.1 Promoter shareholding and pledge status of Avantel Ltd?

Promoters hold 37.04% of the Avantel Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Avantel Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Avantel Ltd vs industry peers?

Avantel Ltd revenue CAGR is 36.77%, compared to the industry median CAGR of 18.15%, indicating faster growth and gaining its market share.

Profit Metrics

	Current Level	5-year Industry Median
Revenue Growth (%)	11	18.2
Gross Profit Growth (%)	14.6	33
Operating Profit Growth (%)	13.1	27.2
Net Profit Growth (%)	9.1	33.2

Operating Efficiency

	Current Level	5-year Industry Median
Asset Turnover (x)	1.06	0.56
ROE (%)	29.95	12.34
ROCE (%)	37.94	15.01
Cash Conversion Cycle (days)	150.66	155

Valuation & price assessment

Q.1 Stock return of Avantel Ltd over the last decade?

Over the last 9 year(s), the stock has delivered a CAGR of 54% based on the current price.

	9Y	5Y	3Y	1Y
Share Price CAGR	54%	89.9%	77.1%	55.4%

Q.2 Valuation ratios of Avantel Ltd vs historical?

The current P/E ratio of 194.51 is higher than its historical median of 46.82, indicating that the stock is trading above its historical average valuation.

Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?

Valuation Ratios	Current	5-year Historic Median	5-year Industry Median
Price to Earnings	194.51	46.82	64.82
Price to Book	12.28	11.19	7.10
Price to Sales	19.77	10.76	8.19
EV to EBITDA	78.82	29.09	33.96

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Check Before You Invest : Avantel Ltd

Snapshot

Performance Analysis

Ownership & governance

Peer comparison (industry-wise, mcap)

Profit Metrics

Operating Efficiency

Valuation & price assessment

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