Hello Sir,
Hope you are doing well.
Often I have across a stock by the name of Avantel Ltd. While I have always liked the numbers, I couldn't pull the trigger because of a lack of understanding about the business and the potential.
Unfortunately for me, the stock has done quite well.
The company works in a niche space and primarily supplies to Aerospace and Defense sectors. Below, we have shared notes from the Brickwork credit rating report on the company.
Hope you find the details useful in your search of investment opportunities.
Before that, a few days back we released our New Stock Recommendation for Alpha and Alpha + Members
It's a minerals processing company, largest in its segment, has captive raw material sources, grown PAT by ~300% in the last few years, de-leveraging balance sheet, 2nd generation promoters and available at only ~6 times post-tax earnings.
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Avantel - Notes from Sep'22 Brickwork Credit Rating report
- The company has been listed on BSE since January 2001
- The company has its registered office, manufacturing and R&D facilities at Visakhapatnam, Andhra Pradesh
- Dr. A. Vidyasagar is the Chairman & Managing Director of the company
- The founder and present Chairman & MD, Dr. A Vidyasagar is technically qualified and has an extensive industry experience of over three decades
- The company provides customized wireless and satellite communication (SATCOM) solutions and products. The company manufactures wireless front-end, satellite communication, embedded systems, signal processing devices and provides network management, software development and related customer support services
- The company's SATCOM products are proprietary in nature
- The company mainly operates in Aerospace & Defense sector and holds Defense Industrial Licenses issued by government and its customers mainly come from the strategic sector such as space, defense, transport and telecommunications
- The company primarily supplies to defense and defense research organizations coming under Ministry of Defense which has over 80% of revenue share
- Furthermore, the company's primary revenue stream continues to be SATCOMs which contributes to almost 100% of the revenue and the revenue concentration is expected to continue over the short term
- However, the orders from the railways are expected to diversify the revenue stream going forward
- The company maintains healthy and long term relationships of over two decades with a reputed clientele that includes Indian Army, Indian Railways, Indian Airforce, Indian Navy, ISRO, DRDO, Goa Shipyard Limited, The Boeing Company, Larsen & Toubro Limited (L&T), etc.
- Avantel's business is tender based and hence the company remains susceptible to the inherent risk associated with such business. However, the established track record of the company and being the preferred supplier to the reputed clientele for the last many years, help to get repeat orders
- The company has an unexecuted order book of ~Rs 230 Cr to be executed over the next two years inclusive of a major order worth ~ Rs 125 Cr
- Company's growth plan includes the set-up of a new corporate office and a new manufacturing unit by FY 24
(End)
Disclaimer: This is not a recommendation to buy/sell Avantel. These notes are as announced by the companies on exchanges and only for the purpose of information and education.
Best Regards,
Ekansh Mittal
Research Analyst
Web: https://www.katalystwealth.
SEBI Research Analyst Registration No. INH100001690
Research Analyst Details
Name: Ekansh Mittal Email Id: [email protected] Ph: +91 727 5050062
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