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Published: July 15, 2026
Updated: July 15, 2026

Avantel

Cutting-edge vendor for space, defence

Based at Hyderabad, Avantel is a fully integrated company in the space, aerospace and defence domains. The company explicitly designs, develops and manufactures mission-critical hardware, communication systems and electronic infrastructure for these three strategic industries.

Avantel’s product portfolio shares a strong engineering- and system-level match with specialised Indian aerospace and electronics players like Data Pattern (India), Apollo Micro Systems, Paras Defence and Space Technologies and Centum Electronics. Whereas with Astra Microwave, its core products do not match perfectly but rather are complementary.

The company has four manufacturing units spread over Hyderabad, Visakhapatnam and Vijaywada. Of these, one is operated through its wholly-owned subsidiary, Imeds Global Pvt Ltd.

With around 55,000 sq ft area, the first unit is located at Visakhapatnam, which also has an R&D centre along with the production facility. It is certified as an IGBC Gold-rated Green Building. Unit No. 2, comprising a 4-acre plot with a built-up area of 86,271 sq ft, is at E-City, Hyderabad. A new facility, Unit No. 3, for the development and manufacturing of SATCOM ground station systems for both LEO and GEO satellites, is coming up over an area of 9 acres with a built-up space of 1,13,660 sq ft near Vijayawada and is expected to be operational by Q3 of the current FY 27.

MEDICAL DEVICES FACILITY

The fourth unit, established under Imeds Global, is located at Visakhapatnam, spread over a 2-acre plot and a built-up area of 36,000 sq ft. This facility is dedicated to the design, development and manufacture of medical products. This division has obtained manufacturing licences for key products, including CPAP, BiPAP, endoscopes and portable oxygen concentrators. Additionally, certifications for ventilators and patient monitoring systems are expected to be completed by July 2026.

Importantly, during FY 26, Imeds has invested significantly in R&D activities to build a robust and diversified product portfolio across the respiratory care, sterilisation and patient monitoring segments. The management is quite optimistic about this capital expenditure as they feel it is essential for establishing a strong foundation in a highly regulated industry.

On the safer side, Imeds has also initiated strategic collaborations for contract manufacturing of medical devices catering to both homecare and kiosk-based healthcare delivery models. The expanded product portfolio and deepening market penetration augurs well for Imeds’ profit-making in the foreseeable future. Again, policy and incentive support by the Centre to fast-track domestic production of high-end, heavily imported medical devices could benefit Imeds.

The capital outlay for the Ministry of Defence for the current financial year has surged by 21.83% to Rs 2.19 lakh crore, with nearly 75% of this outlay, amounting to Rs 1.64 lakh crore, earmarked for the Indian defence industry. Hence, the business outlook for Avantel is promising, because with an expanded product folio, well-equipped capability and capacity enhancement, the company is future-ready to grow seamlessly.

DEFENCE CLIENTS

The company presently has an order book of Rs 720 crore, to be executed across two financial years, 2026-27 and 2027-28. In addition, the company is seeing very good potential for its newly developed products. Hence, it is safe to conclude that Avantel has good revenue visibility and will equally benefit from its own R&D initiatives and innovative technologies of global standards. Its major customers include the Indian Navy, the Indian Coast Guard, the Indian Army, the Indian Air Force, DRDO, ISRO, NewSpace India, L&T and BEL. The government’s ambition to achieve Rs 3 lakh crore in indigenous defence production and Rs 50,000 crore in exports by 2029 is getting reflected in their action as well. Despite the entry of several new players in the field, it appears that Avantel is capable of pursuing its next phase of growth aggressively, successfully, sustainably and hassle-free.

DIP IN PROFITS

During FY 26, the company’s performance was a little disappointing. Revenue was Rs 221.35 crore, PBT Rs 32.17 crore and PAT Rs 22.50 crore, vis-à-vis Rs 248.48 crore, Rs 82.72 crore and Rs 59.92 crore respectively in the previous year. Finance and depreciation costs were higher at Rs 5.63 crore and Rs 18.03 crore against Rs 3.04 crore and Rs 11.39 crore in the previous FY 25. The equity capital of Rs 53.14 crore is higher by Rs 4.19 crore compared to Rs 48.95 crore in the previous year, mainly due to a rights issue of Rs 80 crore wherein the company issued shares @ Rs 40 (including a premium of Rs 38) to finance its new plant.

As at year-end, the book value per Rs 2 face value share is Rs 12.73, with the promoter group’s holding at 37.04%. Out of the balance 62.96% public shareholding, 51.15% is held among 1,92,369 individual resident shareholders. The company has announced a dividend of 10% for the year. The current credit rating is CARE A- stable for long-term bank facilities and CARE A2+ for short-term bank facilities, reaffirmed by CARE Ratings Ltd.

The management has attributed the decrease in profitability for FY 26 to a significant increase in R&D expenditure to accelerate product development in Software Defined Radios (SDR) and Wind Profile Radar (WPR) systems, as well as iDEX projects and capital investment across various facilities, resulting in a rise in depreciation.

LIBERAL BONUS

The company has a liberal bonus issue history. In June 2022, it issued bonus shares in the ratio of 3:1. Again, in November 2023, bonus shares in the ratio of 2:1 were issued. This looks unwarranted and unusual compared to its size of business.

Currently, the Avantel stock is being quoted at Rs 172 with a yearly high-low of Rs 215 and Rs 117 and a market capitalisation of Rs 4,565 crore. On FY 26’s earning per share of just 82 paise on Rs 2 face value, the PE works out to 210, which is on the higher side. However, on a Q-o-Q basis from hereon, earnings should improve gradually and turn much better from Q4FY27 onwards. Further, its 100% subsidiary, Imeds Global (into manufacturing of medical devices), will also start contributing in full swing practically from FY 28 onwards. Though defence and aerospace stocks do get good PE multiples in the market, we would advise entering the stock with small quantities at the current level and accumulating at every dip. The company’s track record of a healthy EBITDA margin from an elite customer base does provide a comfort zone, despite the stock looking expensive.

To sum up, the company has vast domain expertise and experience and is into hi-tech entry-barrier verticals with a brighter sectoral outlook. In addition, we shouldn’t be surprised if Avantel gets an opportunity for tie-ups or collaborations with one of the leading foreign groups in the field.

• Revenue from Operations: Rs 221.25 crore (FY26) vs Rs 248.48 crore (FY25) and Rs 223.92 crore (FY24)
• Profit Before Tax: Rs 32.17 crore (FY26) vs Rs 82.72 crore (FY25) and Rs 74.47 crore (FY24)
• Net Profit: Rs 22.50 crore (FY26) vs Rs 59.92 crore (FY25) and Rs 55.45 crore (FY24)
• EPS: Rs 0.82 (FY26) vs Rs 2.36 (FY25) and Rs 2.28 (FY24)
• Dividend: 10% (FY26), 10% (FY25), 10% (FY24)
• OPM: 25.22% (FY26) vs 39.10% (FY25) and 38.23% (FY24)
• NPM: 10.89% (FY26) vs 24.11% (FY25) and 24.76% (FY24)