Avantel Ltd: Fundamental Analysis and Share Price Overview
Company Overview
Avantel Ltd is a small-cap defense electronics company based in India. It specializes in telecom and satellite communication products, including software-defined radios, radar systems, and embedded systems. The company serves a diverse range of clients, including defense and aerospace sectors, offering innovative solutions like real-time information systems and visual databases for aircraft simulators.
Key Financial Metrics: Avental limted
- Market Performance: avantel underperformed sector by -3.2% .stock has been losing for the last 6 days and has fallen -15.47% returns in the period
- Current Share Price: ₹144.94 (as of November 15 -2024).
- 52-Week Range: ₹143.00 – ₹211.40.
- Market Cap: ₹3,531 crore.
- Profitability:
- p/e ratio 60.10 x
- b/e ratio 17.94 x
- Earnings Per Share (EPS): ₹2.42 (TTM).
- Net Profit Margin: 25.52%.
- Gross Margin: 68.51%.
- Growth Metrics:
- Compounded Profit Growth: 54% over three years.
- Strengths
- Avantel’s earnings have grown by 45.4% in the past year, driven by a strong defense sector demand.
- The company has a robust Return on Equity (ROE) of 29.85%, reflecting efficient capital use.
- It is a key player in India’s strategic defense initiatives, which offers significant growth potential.
- Risks and Concerns
- High valuation ratios (P/E and P/B) indicate the stock may be overvalued compared to its peers.
- Recent price volatility, with a 15% drop in investor sentiment, reflects market concerns.
- Dependence on defense contracts can lead to cyclical revenue.
- Share Price Insights
- Avantel has shown strong long-term price appreciation, with a three-year CAGR of 119%.However, the stock has faced short-term pressure, with a 17% drop over the past month.
- Investment Outlook
- Avantel Ltd is a promising small-cap stock with strong fundamentals and strategic importance in the defense sector. However, its high valuation and recent price corrections make it suitable for investors with a high-risk appetite, focusing on long-term growth potential.
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