Avalon Technologies Limited reported a consolidated net profit of ₹348.69 million for the quarter ended June 30, 2026, a 145% increase from ₹142.14 million in Q1FY25. The Chennai-based Electronics Manufacturing Services (EMS) provider saw consolidated revenue from operations surge 50% to ₹4,844.14 million, compared to ₹3,233.08 million in the prior-year period, reflecting robust order execution across its global footprint. EBITDA for the quarter stood at ₹580 million, up from ₹299 million in Q1FY25, with EBITDA margin expanding to 11.96% from 9.24% year-on-year.

The results were reviewed and recommended by the Audit Committee and approved by the Board of Directors at meetings held on August 4, 2026. The unaudited standalone and consolidated financial statements were prepared in accordance with Indian Accounting Standards (Ind AS) and Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Varma & Varma, the statutory auditors, issued a limited review report stating that nothing came to their attention to suggest material misstatement.

Financial Performance

Standalone net profit stood at ₹201.49 million, up 38% year-on-year from ₹145.77 million. Standalone revenue from operations grew 27% to ₹2,106.40 million. The company's basic earnings per share (EPS) rose to ₹5.22 on a consolidated basis, compared to ₹2.14 in Q1FY25. Diluted EPS was ₹5.20, versus ₹2.12 in the corresponding quarter of the previous fiscal year.

Total comprehensive income for the group reached ₹336.15 million, compared to ₹141.72 million in Q1FY25. Other income contributed ₹28.17 million to total income, down significantly from ₹119.20 million in the preceding quarter but higher than the ₹16.57 million recorded in Q1FY25.

Operational Highlights

The Group operates in a single reportable business segment providing EMS capabilities, including printed circuit board assembly and custom cable and wire harnesses. The consolidated entity includes Avalon Technology and Services Private Limited, Sienna Ecad Technologies Private Limited, and ABV Electronics, Inc. (d/b/a Sienna Corporation) in the United States. During the quarter, the company allotted 45,592 equity shares upon exercise of employee stock options. As of June 30, 2026, 3,29,083 employee stock options remained outstanding from a total grant of 20,03,321.

What the Numbers Show

The disproportionate rise in consolidated net profit relative to revenue growth highlights improved operating leverage. While consolidated revenue grew 50%, profit before tax surged 152%, and EBITDA margin expanded by approximately 272 basis points year-on-year to 11.96%. This divergence suggests that fixed costs were absorbed more efficiently against higher sales volumes, or that mix shifts favored higher-margin products. Employee benefit expenses rose 32% to ₹834.13 million, lagging revenue growth, which further supports margin expansion. Other income declined sharply quarter-on-quarter, indicating that the current period's profitability is driven primarily by core operational performance rather than non-operating gains.

Avalon Technologies reported a consolidated net profit of ₹348.69 million for the quarter ended June 30, 2026, marking a 145% year-on-year increase from ₹142.14 million in Q1FY26. The electronics manufacturing services (EMS) provider saw consolidated revenue from operations rise 50% to ₹4,844.14 million, driven by strong demand across its global operations and effective execution of its expansion strategy. This performance underscores the company’s ability to leverage operating scale, as evidenced by an EBITDA margin expansion of 272 basis points to 12.0%, signaling robust profitability amidst rising sales volumes.

The Board of Directors approved the unaudited standalone and consolidated financial results at a meeting held on August 04, 2026, in compliance with Regulation 30 and Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Statutory Auditors Varma & Varma issued a limited review report on the financial statements, confirming they present a true and fair view in accordance with Ind AS 34. The company also released an investor presentation detailing its business highlights, strategy, and financial metrics for the quarter.

Consolidated Financial Performance

Consolidated total income reached ₹4,872.31 million, up from ₹3,249.65 million in Q1FY26. Total expenses stood at ₹4,384.92 million, an increase from ₹3,056.58 million in the corresponding quarter of the previous year. Profit before tax improved to ₹487.39 million from ₹193.07 million, while total tax expense was ₹138.70 million. EBITDA rose sharply by 94% to ₹580 million. On a standalone basis, the company reported a net profit of ₹201.49 million, up from ₹145.77 million in Q1FY26. Standalone revenue from operations was ₹2,106.40 million, compared to ₹1,664.94 million in the prior-year quarter.

What the Numbers Show

The significant divergence between the 50% revenue growth and the 145% net profit growth indicates operating leverage is benefiting the bottom line as fixed costs remain relatively stable against rising sales volumes. Employee benefit expenses rose to ₹834.13 million consolidated, up from ₹633.71 million, reflecting increased headcount or compensation adjustments aligned with production scaling. Finance costs decreased slightly to ₹34.59 million from ₹37.68 million, suggesting efficient debt management despite expansion activities. Gross margin stood at 34.7%, supporting the expanded operating margins. The company’s capex-light model allows for higher returns on invested capital, as evidenced by the improvement in Net Working Capital days from 142 days in June 2025 to 117 days in June 2026.

Operational Highlights and Subsidiary Contributions

The consolidated results include the performance of key subsidiaries: Avalon Technology and Services Private Limited, Sienna Ecad Technologies Private Limited, and ABV Electronics, Inc. (doing business as Sienna Corporation) in the United States. The US subsidiary reported total income of ₹2,392.03 million and net profit after tax of ₹64.02 million for the quarter, contributing significantly to the group’s overall profitability. Its financial statements were prepared under US GAAP and restated to comply with Ind AS for consolidation purposes. Operationally, India manufacturing delivered a 16.7% EBITDA margin and 11.1% PAT margin in Q1FY27. The company highlighted that its order book increased by 23.4% year-on-year. Additionally, the brownfield expansion for domestic demand in Chennai is now operational, and the company secured EN 15085-2 certification, strengthening its capabilities in railway welding applications.

Share Capital and ESOPs

Paid-up equity share capital remained at ₹133.62 million. During the quarter, the company allotted 45,592 equity shares upon exercise of employee stock options by eligible employees. As of June 30, 2026, 3,29,083 employee stock options remained outstanding out of 20,03,321 granted historically.