Avalon Technologies Ltd.
ISIN: INE0LCL01028 • Market Cap: ₹14,972 Cr
The 5-Pillar Quality Audit for Avalon Technologies Ltd.
Evaluated across Profitability, Financial Health, Historical Compounding, Valuation Safety, and Ownership Governance:
1. Profitability & Capital Efficiency
Weight: 25%Measures operating margins (11.4%), Return on Capital Employed (15.8%), and equity compounding (10.4%).
2. Financial Health & Solvency
Weight: 25%Debt-to-Equity is 0.23 with comfortable interest coverage and clean working capital.
3. Growth & Compounding Track Record
Weight: 20%Historical 3Y Sales CAGR (23.1%) and 3Y PAT CAGR (36.5%).
4. Valuation Multiple & Margin of Safety
Weight: 15%Trades at P/E of 112.06 vs PEG of 5.16 and Dividend Yield of —.
5. Ownership Quality & Governance
Weight: 15%Promoter holding stands at 44.4%, backed by 32.5% institutional ownership.
Key Fundamental Strengths
Strong Topline Expansion (3Y Sales CAGR: 23.1%)
Revenue has expanded at 23.1% CAGR over 3 years, signaling industry market-share gains.
High-Velocity Profit Compounding (3Y PAT CAGR: 36.5%)
Net earnings have compounded at 36.5% annualized, demonstrating operating leverage.
Deep Institutional Sponsorship (32.5%)
Mutual funds, domestic DIIs, and foreign FIIs hold 32.5%, providing strong governance scrutiny.
Areas to Watch & Potential Risks
Priced for Perfection (P/E: 112.06)
A steep valuation multiple of 112.06 leaves little margin for safety against quarterly earnings misses.
Sectoral & Macro Headwinds (Capital Goods)
Subject to broader cyclical demand, raw material price shifts, and regulatory frameworks governing the Capital Goods space.
Quantitative Strategy Eligibility
Checking AVALON against established Indian wealth creation frameworks:
Coffee Can Investing Framework
Passes Saurabh Mukherjea's Coffee Can rule: 10%+ sustained revenue growth and 15%+ ROCE/ROE.
Quality Factor Screener (High RoIC + Low Debt)
Scorecard of 66/100 or leverage profile sits below strict quality index hurdles.
GARP / Value-Growth Blend
Valuation multiple or return metrics require further cyclical pullback.
Capital Goods Sector Peer Comparison
Compare AVALON directly against top industry peers by market capitalization:
| Company | 5-Pillar Score | Market Cap | P/E | ROCE | D/E | Scorecard |
|---|---|---|---|---|---|---|
| Avalon Technologies Ltd. (AVALON)Current | 66/100 | ₹14,972 Cr | 112.06 | 15.8% | 0.23 | — |
| Hindustan Aeronautics Ltd. (HAL) | 70/100 | ₹3.35 Lakh Cr | 35.94 | 13.9% | 0.00 | View |
| Bharat Electronics Ltd. (BEL) | 80/100 | ₹2.99 Lakh Cr | 48.61 | 32.7% | 0.00 | View |
| Tata Motors Ltd. (TMCV) | 71/100 | ₹1.76 Lakh Cr | 42.02 | 31.3% | 0.38 | View |
| ABB India Ltd. (ABB) | 72/100 | ₹1.57 Lakh Cr | 52.48 | 28.7% | 0.00 | View |
| Hitachi Energy India Ltd. (POWERINDIA) | 76/100 | ₹1.50 Lakh Cr | 129.99 | 26.7% | 0.00 | View |
Frequently Asked Questions: Avalon Technologies Ltd.
Q:What is the 5-Pillar Fundamental Score for Avalon Technologies Ltd. (AVALON)?
Avalon Technologies Ltd. has a RupeeTools Fundamental Score of 66/100, placing it in the 'Solid & Healthy' category. Its pillar scores are: Profitability (57/100), Financial Health (75/100), Growth (92/100), Valuation (18/100), and Ownership Quality (78/100).
Q:Is AVALON fundamentally strong for long-term investment?
AVALON currently holds a moderate quality rating of 66/100. While it operates in the Capital Goods sector, investors should monitor its profit margins before initiating long-term positions.
Q:Does AVALON pass the Coffee Can Investing filter?
Yes! AVALON satisfies both core pillars of Coffee Can Investing: achieving consistently high capital returns (ROCE/ROE >= 15%) alongside double-digit multi-year revenue growth.
Q:How does AVALON compare against other Capital Goods peers?
Within India's Capital Goods sector, AVALON trades at a P/E of 112.06 and generates an ROCE of 15.8%. Compare its 5-Pillar score of 66/100 against top sector peers like Hindustan Aeronautics Ltd. (70/100), Bharat Electronics Ltd. (80/100).
Regulatory & SEBI Research Analyst Compliance Disclaimer:
This 5-pillar fundamental score is an automated quantitative health check generated purely from historical public financial statements, corporate filings, and exchange disclosures for educational and informational purposes only. It does NOT constitute investment advice, a stock recommendation, or a solicitation to buy or sell securities. RupeeTools is not a SEBI-registered Research Analyst. Please consult a SEBI-registered financial advisor before making investment decisions.