Synopsis :- A defence stock jumped nearly 8% after securing a ₹122 crore domestic order for supply and commissioning of systems, boosting investor sentiment despite recent declines in quarterly revenue and profit.
A small-cap company that is engaged in the business of designing, developing and maintaining wireless and satellite communication products, defence electronics, radar systems and development of network management software applications has come into focus after securing a significant new order.
With the market capitalization of Rs. 4,164.91 crore, the shares of Avantel Limited were trading at Rs. 156.89, up by 4.36 percent from its previous day’s close price of Rs. 150.34 per equity share. The stock has touched an intraday high of Rs. 161.80, implying an increase of 7.62 percent from previous day’s close price.
Avantel Ltd has received a domestic order from M/s. NewSpace India Limited for the supply, installation, and commissioning of systems, valued at Rs 122.58 crore (excluding taxes). The contract includes a security deposit of 2.50 percent and a performance bank guarantee of 0.50 percent, and is scheduled to be executed by August 2027.
Avantel Limited designs, develops, manufactures, and sells wireless communication and satellite-based products in India. Its portfolio includes software-defined radios, satellite communication systems, radar systems, network management solutions, embedded systems, and RF test equipment, catering to defense, aerospace, railways, and maritime sectors. The company also provides engineering and testing facilities and manufactures certain healthcare products. Incorporated in 1990, it is headquartered in Hyderabad, India.
A return on equity (ROE) of about 28.1 percent, a return on capital employed (ROCE) of about 37.1 percent and debt to equity ratio at 0.09 demonstrate the company’s financial position. At the moment, the company’s P/E ratio is 257x higher as compared to its industry P/E 63x.
The company reported revenue of Rs. 51.72 crore in Q3FY26, reflecting a 26.8 percent YoY decline compared to Rs. 70.68 crore in Q3FY25. On a sequential basis, revenue decreased by 6.7 percent QoQ from Rs. 55.42 crore in Q2FY26, indicating continued pressure on the topline during the quarter.
EBITDA stood at Rs. 12.54 crore in Q3FY26, down sharply by 60.9 percent YoY from Rs. 32.05 crore in Q3FY25. However, on a QoQ basis, EBITDA improved by 10.8 percent compared to Rs. 11.32 crore in Q2FY26, suggesting some recovery in operating performance sequentially.
Net profit came in at Rs. 2.74 crore in Q3FY26, registering a steep 86.4 percent YoY decline from Rs. 20.08 crore in Q3FY25. On a sequential basis, profit fell by 35.8 percent QoQ from Rs. 4.27 crore in Q2FY26, reflecting significant compression in bottom-line performance both annually and quarterly.
Over the past three years, the company has demonstrated strong growth, achieving a revenue CAGR of 33 percent, a profit CAGR of 46 percent, and a price CAGR of 82 percent reflecting its operational performance and market confidence.
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