Avalon Technologies profit rises 59% as revenue gains 37%

Avalon Technologies Limited reported consolidated revenue from operations of Rs 525.434 crore for the quarter ended September 30, 2026, up 37% year on year, while profit after tax rose 59% to Rs 39.836 crore. Profit before tax increased 63% to Rs 54.644 crore, exceeding the increase in total expenses.

How did Avalon Technologies perform in the September quarter?

Avalon Technologies increased revenue, profit before tax and profit after tax in the September 2026 quarter from both the year-earlier quarter and the June 2026 quarter. Revenue from operations was Rs 525.434 crore, compared with Rs 382.464 crore in the quarter ended September 30, 2025 and Rs 484.414 crore in the quarter ended June 30, 2026. That represented a 37% year-on-year increase and an 8% sequential increase.

Total income reached Rs 528.169 crore in the September quarter, including Rs 2.735 crore of other income, compared with Rs 390.375 crore a year earlier, including Rs 7.911 crore of other income. Revenue from operations therefore accounted for the increase in total income, while other income declined from the comparable quarter. Avalon Technologies operates in one reportable segment, electronics manufacturing services, or EMS, covering printed circuit board assembly, custom cable and wire harnesses.

Avalon Technologies reported profit before tax of Rs 54.644 crore, up from Rs 33.584 crore a year earlier and Rs 48.739 crore in June 2026. Tax expense was Rs 14.808 crore, comprising Rs 11.678 crore of current tax and Rs 3.130 crore of deferred tax. Basic earnings per share, not annualised according to the filing, rose to Rs 5.96 from Rs 3.75 in the September 2025 quarter.

What changed in Avalon Technologies’ costs and profitability?

Avalon Technologies’ profit growth exceeded revenue growth because total expenses increased 33% year on year, compared with a 35% increase in total income. Total expenses were Rs 473.525 crore in the September 2026 quarter, versus Rs 356.791 crore a year earlier, while total income increased by Rs 137.794 crore to Rs 528.169 crore. The result was a Rs 21.060 crore year-on-year increase in profit before tax.

Raw-material consumption rose to Rs 362.412 crore from Rs 283.199 crore, and employee benefit expense increased to Rs 84.693 crore from Rs 69.891 crore. Other expenses rose to Rs 28.585 crore from Rs 22.764 crore, while depreciation and amortisation increased to Rs 9.969 crore from Rs 8.870 crore. Finance costs were Rs 4.151 crore, compared with Rs 4.072 crore in the September 2025 quarter.

The inventory-change line was a negative Rs 16.285 crore, compared with a negative Rs 32.005 crore a year earlier. This means the cost offset reported under changes in inventories of finished goods, work in progress and stock in trade was smaller than in the previous September quarter. Despite that movement, profit before tax rose 63% year on year to Rs 54.644 crore.

For the half year ended September 30, 2026, revenue from operations rose 43% to Rs 1,009.848 crore from Rs 705.772 crore in the prior-year half year. Profit after tax increased 91% to Rs 74.705 crore from Rs 39.193 crore, while profit before tax rose to Rs 103.383 crore from Rs 52.891 crore.

What do Avalon Technologies’ balance sheet and cash flows show?

Avalon Technologies had higher inventories, receivables, cash and current borrowings at September 30, 2026 than at March 31, 2026. Inventories increased by Rs 133.036 crore to Rs 596.325 crore, while trade receivables increased by Rs 40.846 crore to Rs 422.119 crore. Cash and cash equivalents rose to Rs 134.797 crore from Rs 71.222 crore.

Current borrowings increased by Rs 131.123 crore over the six months to Rs 303.385 crore, while non-current borrowings declined to Rs 7.893 crore from Rs 11.165 crore. Total current liabilities rose to Rs 715.650 crore from Rs 495.916 crore, including trade payables other than those due to micro and small enterprises of Rs 328.976 crore, up from Rs 248.431 crore.

Avalon Technologies generated Rs 9.511 crore of net operating cash flow in the half year ended September 30, 2026, compared with an outflow of Rs 10.174 crore in the prior-year half year. Profit before tax was Rs 103.383 crore, but inventory growth used Rs 131.190 crore of cash and receivables used Rs 35.635 crore. A Rs 78.158 crore increase in trade payables partly offset those working-capital movements.

Investing cash flow was an outflow of Rs 59.375 crore in the latest half year, including Rs 55.480 crore for acquisition of right-of-use assets and Rs 24.277 crore for property, plant, equipment and intangible assets. Financing cash flow was an inflow of Rs 113.135 crore, led by Rs 129.522 crore of net proceeds from current borrowings. Net cash and cash equivalents increased by Rs 63.271 crore during the half year.

What expansion and capital plans has Avalon Technologies disclosed?

Avalon Technologies has disclosed a joint venture with Zollner Elektronik AG for electronics manufacturing and services in India. The board approved the agreement on September 3, 2026, covering printed circuit board assembly, box-build, system integration and related services. The joint venture, Zollner Avalon Private Limited, was incorporated after the quarter end on October 19, 2026.

Zollner Elektronik AG is to hold 51% of Zollner Avalon Private Limited, while Avalon Technologies is to hold 49%. The filing does not provide an investment amount, revenue target or operating timetable for the venture. Its stated activities overlap with Avalon Technologies’ existing EMS segment capabilities.

Separately, Avalon Technologies’ board approved on October 27, 2026 a proposed preferential issue of up to 19,37,808 warrants to Zollner Elektronik AG at Rs 2,193.20 each. The proposed issue aggregates to approximately Rs 425 crore, with each warrant convertible into one fully paid-up equity share under the issue terms. The proposal requires shareholder and applicable regulatory or statutory approvals.

Avalon Technologies allotted 70,545 equity shares through employee stock-option exercises during the September 2026 quarter. It had granted 20,93,321 options and had 3,48,257 options outstanding as of September 30, 2026. Paid-up equity share capital was Rs 13.376 crore at quarter end, compared with Rs 13.353 crore at March 31, 2026.

Conclusion

Avalon Technologies delivered faster profit growth than revenue growth in the September 2026 quarter, with revenue from operations rising 37% to Rs 525.434 crore and profit after tax increasing 59% to Rs 39.836 crore. The half-year figures showed the same direction, but the balance sheet also recorded a Rs 133.036 crore inventory increase and a Rs 131.123 crore increase in current borrowings from March 2026.

The next disclosed developments are shareholder and regulatory approvals for the proposed Rs 425 crore warrant issue and the progress of Zollner Avalon Private Limited, incorporated on October 19, 2026. Subsequent results will also show whether inventory of Rs 596.325 crore and receivables of Rs 422.119 crore continue to shape Avalon Technologies’ operating cash flow.