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INVESTMENT INSIGHTS

Check Before You Invest : Avantel Ltd

BSE: 532406 NSE: AVANTEL ISIN: INE005B01027
  |   Sector:  Capital Goods & Industrial Consumables   |   Industry:  Defence

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 10 year financial track record.
Q.3 Is Avantel Ltd undervalued or overvalued?
Avantel Ltd appears Overvalued, as its key valuation ratios are above with their past averages.
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

Q.1 Revenue growth of Avantel Ltd?
Avantel Ltd revenue growth is 11% for FY-2025 , which is below its 5 year CAGR of 36.8% , 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 with its 5 year median of 19.74%, indicating increasing margins.
Current Level Historic Median
Gross Profit Margin 34.2 26.2
Operating Profit Margin 38.38 32.07
Net Profit Margin 24.11 19.74
Q.5 Return on Asset of Avantel Ltd?
Avantel Ltd Return on Asset is 23.05%, which is above its 5 year historical median of 22.76%, indicating improved asset utilization efficiency.
Q.6 Return on Equity (ROE) of Avantel Ltd?
Avantel Ltd Return on equity is 29.95% for FY-2025 , which is in line with its historical median of 29.95%, indicating the business is making similar use of its shareholders capital.
Q.7 Return on capital employed (ROCE) of Avantel Ltd?
Avantel Ltd Return on capital employed is 37.94% for FY-2025 , which is above its estimated weighted average cost of capital(WACC) 14%, indicating value creation.
Q.8 Cash conversion cycle of Avantel Ltd?
Avantel Ltd Cash conversion cycle is 151 days, above its historical median of 130 days, indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.
Current Level Historic Median
Asset Turnover 1.06 1.17
ROE 29.95 29.95
ROCE 37.94 37.9
Cash Conversion Cycle 151 days 130 days
Q.9 Debt to Equity ratio of Avantel Ltd?
Avantel Ltd Debt-to-Equity ratio is 0.09 , which is lower with the industry average of 0.19 , 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, indicating the business is able to service its debt comfortably.

Ownership & governance

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)

Q.1 Revenue growth of Avantel Ltd vs industry peers?
Avantel Ltd revenue CAGR is 36.77% , compared to the industry median CAGR of 26.82% , indicating faster growth and gaining its market share.
Profit Metrics
Current Level Industry Median
Revenue 248.5 161.4
Gross Profit 84.8 40.3
Operating Profit 95 48
Net Profit 60 19
Operating Efficiency
Current Level Industry Median
Asset Turnover 1.06 0.59
ROE 29.95 12.43
ROCE 37.94 17.53
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 53.2% based on the current price.
Q.2 What return has the stock given over the last decade?
9Y 5Y 3Y 1Y
Share Price 53.2% 88.5% 70.1% 29.9%
Q.3 Valuation ratios of Avantel Ltd vs historical?
The current P/E is higher that its historical median.
Q.4 How do the current valuation ratios measure up against the historic numbers and the current industry numbers?
Valuation Ratios Current Historic Median Industry Median
Price to Earnings 179.52 15.34 41.06
Price to Book 11.91 3.13 7.15
Price to Sales 19.75 3.06 8.05
EV to EBITDA 77.81 9.43 35.11

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