Avantel Limited

Aerospace & Defense

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Cumulative Returns and Drawdowns

Fundamentals

Ownership

Margined

AI Summary

asof: 2026-09-17

Avantel: Recent Corporate Announcements and Business Developments

Headwinds and Challenges

The company’s consolidated results for the quarter ended June 30, 2026 show that the Health Care segment continues to be a drag on overall performance. While the Communications and signal processing products segment reported a segment profit of Rs. 1,092.19 Lakhs for the quarter, the Health Care segment reported a segment loss of Rs. (222.30) Lakhs. This pattern is consistent across recent periods: the Health Care segment recorded a loss of Rs. (230.62) Lakhs in the quarter ended March 31, 2026, Rs. (139.70) Lakhs in the quarter ended June 30, 2025, and Rs. (753.44) Lakhs for the year ended March 31, 2026. The consolidated net profit for the quarter ended June 30, 2026 (Rs. 539.46 Lakhs) is materially lower than the standalone net profit (Rs. 761.77 Lakhs), reflecting the subsidiary’s losses.

The consolidated financial results include the financial results of iMeds Global Private Limited, a wholly owned subsidiary, which have not been reviewed by their auditors. These unreviewed results reflect total revenue of Rs. 30.35 Lakhs, a net loss after tax of Rs. (222.31) Lakhs, and total comprehensive loss of Rs. (222.31) Lakhs for the quarter ended June 30, 2026.

The company’s consolidated segment liabilities for Communications and signal processing products rose sharply to Rs. 15,655.31 Lakhs as of June 30, 2026, from Rs. 7,046.64 Lakhs as of March 31, 2026, and Rs. 4,435.16 Lakhs as of June 30, 2025. Total consolidated assets also increased to Rs. 49,753.17 Lakhs from Rs. 40,993.02 Lakhs over the same period.

Finance costs have risen year-on-year, from Rs. 80.12 Lakhs in the quarter ended June 30, 2025 to Rs. 174.23 Lakhs in the quarter ended June 30, 2026 on a standalone basis, and from Rs. 80.15 Lakhs to Rs. 175.50 Lakhs on a consolidated basis. Depreciation and amortization expense also increased, from Rs. 390.19 Lakhs to Rs. 660.00 Lakhs standalone, and from Rs. 439.66 Lakhs to Rs. 709.71 Lakhs consolidated.

The company notes that its principal customer is an organisation controlled by the Government of India, and that it has been assured of its receivables and has not made any provision for loss allowance in the past or as on date. The company states it will reassess the model periodically and make necessary adjustments for loss allowance, if any, on a case-to-case basis if required.

Tailwinds and Growth Prospects

Avantel has received a contract dated August 29, 2026, from the Defence Research and Development Organisation (DRDO), Ministry of Defence, Government of India, valued at Rs. 117.88 Crores (inclusive of applicable taxes). The contract covers the Development, Installation & Commission of a Ground Segment Hub for voice & data Communication, with a warranty period of 36 months and an execution timeline up to February 2029.

The company’s core Communications and signal processing products segment continues to grow. Standalone revenue from operations rose to Rs. 7,012.34 Lakhs in the quarter ended June 30, 2026, compared with Rs. 6,314.66 Lakhs in the quarter ended March 31, 2026, and Rs. 5,183.65 Lakhs in the quarter ended June 30, 2025. For the full year ended March 31, 2026, standalone revenue from operations was Rs. 22,135.23 Lakhs. Standalone profit before tax for the quarter ended June 30, 2026 was Rs. 1,092.20 Lakhs, up from Rs. 962.25 Lakhs in the prior quarter and Rs. 669.93 Lakhs in the same quarter of the previous year.

The company’s business description highlights its focus on manufacturing Wireless Front End, Satellite communication, Embedded Systems, Signal Processing, Network Management and Software development, with in-house R&D facilities. The company states that its corporate strategy aims at creating multiple drivers of growth anchored on its core competence, and that it is currently focused on two segments.

The company has undertaken board and leadership changes that may support continuity and execution. On July 11, 2026, the Board approved the re-appointment of Mr. Abburi Siddhartha Sagar as Executive Director (Strategy & Business Development) for a further five-year term from March 8, 2027 to March 7, 2032, and approved the appointment of Mr. Peddi Bala Bhaskar Rao as Additional Director designated as Director (Operations) for a three-year term from July 11, 2026 to July 10, 2029. The Board also approved the re-appointment of Mr. Vyasabhattu Ramchander as an Independent Director for a second five-year term from May 6, 2027 to May 5, 2032. All three resolutions were approved by members through postal ballot on August 16, 2026.

Mr. Peddi Bala Bhaskar Rao brings over 30 years of experience in RF System Design, Electronic Warfare, Satellite Communication Systems, Programme Management, Strategic Bid & Contract Management, and Key Account Management. He has played a key role in the development and execution of several strategic defence programmes for the Indian Navy, Indian Coast Guard, DRDO, ISRO and Defence Public Sector Undertakings. Mr. Abburi Siddhartha Sagar has over 15 years of experience as a Solution Architect for several S&P 500 companies, with expertise in technology, innovation and strategic business solutions, and plays a key role in driving the company’s strategic initiatives, business development, production, manufacturing operations and IT infrastructure.

The Board also approved a revision in remuneration of Mr. Abburi Siddhartha Sagar from Rs. 48.00 Lakhs per annum to Rs. 55 Lakhs per annum, with effect from July 11, 2026.

Key Risks

The company’s dependence on a single principal customer that is controlled by the Government of India represents a concentration risk. The company has not made any provision for loss allowance based on its conclusion that it has been assured of its receivables, and will reassess this model periodically.

The Health Care segment, conducted through wholly owned subsidiary iMeds Global Private Limited, continues to incur losses and is not material to the Group according to the management representation cited in the auditor’s review report. The subsidiary’s financial results have not been reviewed by their auditors.

The company’s consolidated segment liabilities for the Communications and signal processing products segment increased substantially between March 31, 2026 and June 30, 2026, from Rs. 7,046.64 Lakhs to Rs. 15,655.31 Lakhs.

The company operates in a single segment for standalone reporting purposes, but reports two segments on a consolidated basis: Communications and signal processing products, and Health Care Services.

Management Guidance Versus Observed Business Performance

The DRDO contract valued at Rs. 117.88 Crores is to be executed by February 2029, providing a multi-year revenue visibility window. The contract includes a warranty period of 36 months.

The company’s standalone performance for the quarter ended June 30, 2026 shows revenue from operations of Rs. 7,012.34 Lakhs, profit before tax of Rs. 1,092.20 Lakhs, and net profit of Rs. 761.77 Lakhs. On a consolidated basis, revenue from operations was Rs. 7,042.16 Lakhs, profit before tax was Rs. 869.89 Lakhs, and net profit was Rs. 539.46 Lakhs. The difference between standalone and consolidated profitability reflects the losses in the Health Care subsidiary.

Employee benefit expenses include Rs. 135.59 Lakhs in terms of the Avantel Employee Stock Option Plan, 2023 for the quarter ending June 30, 2026, on both standalone and consolidated bases.

The company’s standalone earnings per share (basic and diluted) was Rs. 0.29 for the quarter ended June 30, 2026, compared with Rs. 0.29 for the quarter ended March 31, 2026, and Rs. 0.19 for the quarter ended June 30, 2025. For the year ended March 31, 2026, standalone earnings per share was Rs. 0.92. Consolidated earnings per share (basic and diluted) was Rs. 0.20 for the quarter ended June 30, 2026, compared with Rs. 0.26 for the quarter ended March 31, 2026, and Rs. 0.32 for the quarter ended June 30, 2025. For the year ended March 31, 2026, consolidated earnings per share was Rs. 2.43 basic and Rs. 2.42 diluted.

The Board meeting held on July 11, 2026 commenced at 12:00 P.M. and concluded at 1:30 P.M. The postal ballot resolutions were passed with the requisite majority on August 16, 2026, with the remote e-voting process concluding at 5:00 p.m. IST on that date. The Scrutinizer’s report is dated August 17, 2026. The record date for the postal ballot was July 14, 2026, with 198,544 shareholders on record.

AVANTEL

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September 24, 2026