Avantel

Stock Opportunities
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Avantel Limited is technology driven Company engaged

in the design, development and manufacturing of

electronic, communication, satellite communication

products/ services, software products & services

development and research & development activities. The

Company has developed Mobile Satellite Services based

products and UHF Systems and continue to offer

solutions for various applications and is looking for

growth in this segment by offering integrated solutions

for Airborne, Underwater platforms and special

operations. The Company is also developing Hybrid

Automatic Identification Systems for Coastal Surveillance

and also progressing on the development of satellite

based Real Time Train Tracking Information System for

the Indian Railways using MSS & GPRS

The company is delivering good results and the AR sounds quite optimistic.

The biggest reason I’m interested in this is that the share price is somewhere close to 80 and the board has already approved buyback at Rs 90. Last year, they had approved a buyback at Rs 75. The promoters are also upping their stake in the company. This is an extremely strong indicator that the company sees ‘acche din’ ahead.

This is a micro cap (mcap 33Cr) so it’s quite under-researched and it’s hard to find more info about this. Any insights would be appreciated.

http://www.screener.in/company/?q=532406

Disc: I have a long position in this stock.

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Exited at just below 90 today. Like I said in the earlier post, it was pure arbitrage play based on the fact that the company itself was buying at 90 but the price (when I bought) was at 80. Cool 10% made with almost no risk and great peace of mind.

Of course time will tell whether I sold too early, but this doesn’t fit into my investing style anyway, so I don’t care if I missed a huge opportunity.

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I was curious about this company after watching the amazing video they had on their homepage avantel.in since this company lies close to my work domain (ECE). Like Shan said, looks to be speculative play at this market cap but has tons of potential.

Things to note-

1). Stock buyback held at Rs 90 recently (open offer). CMP is ~87.

2). Investing 60% PAT in R&D, although it is still quite small.

3). As of beginning of this year, had 5 patents applications due.

4). Modernisation of military and railways seems to be focus of present government.

5). The chairman is a retired MajGen, has excellent track record in military institutes (lead a missile program), but is not a shareholder.

6). Dr. Vidyasagar (MD) and his family seems to be primary shareholders.

7). Not enough data for this year, but last year the EPS was ~Rs 14, so had a PE of under 5.

Honestly, I am excited for this company but not sure if I should invest. Has a lot of room to grow, and management seems competent. But still a very risky proposition.

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Also on a macro level, this company won’t be much impacted if some calamity hits the stock market, because of the sectors it is focussing.

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Isnt this thread active… What happened to All investors of Avantel… did you guys see anything Alarming?

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Why Avantel it hit lower circuit. Can someone pls share if something fundamentally changed

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Avantel reported loss of Rs 1.29 crores in Q4, 2017.

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As this thread is not active, I wanted to post few insights I noticed.

CMP: 330

At this level Avantel looks to be a very good bet. I have received their annual report, company looks promising.

Products they developed in current FY
(i) MSS Mark II System with Beam Former Technology
(ii) MSS Hub Systems – Upgrade version
(iii) 1 KW Power Amplifiers for LIC Systems
(iv) MSS Real Time Information system (RTIS) project of Indian Railways
(v) Universal Mobile Terminal
(vi) Shipborn 1 KW HF system

They are expecting few orders from Indian Navy and Boeing.

Avantel has been working on Real Time Information system (RTIS) project for indian railways from 4-5 years. RTIS has been tested on Rajdhani and Shatabdi trains successfully.

Management is keen on getting order for RTIS from Indian Railways this year. This order could be around 100 crores. For a company with MCap of ~140 crores, this order would be a huge one.

If they could bag few orders from Indian Navy and Boeing, there would be significant shift in scrip.

Balance sheet looks clean and management seems to be passionate and trustworthy.

DISC: Invested

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Agree with your observations!
RTIS seems to be on track :wink: for first phase of large scale deployment by end of 2018.

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http://cris.org.in/CRIS/PDF/RTIS.pdf

Discl: Holding about 3% in PF.

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Board Meetings Summary

The next board meeting of Avantel is to be held on August 2, 2018 for Quarterly Results

https://www.moneycontrol.com/company-facts/avantel/board-meetings/A19#A19

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20% YoY Topline increase.
PAT looks 80% down YoY, due to Other income
Operating margins look much better.

https://www.bseindia.com/xml-data/corpfiling/AttachLive/e61dcc65-308f-4e71-bd4d-9908831f5e2a.pdf

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image718×766 164 KB

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https://beta.bseindia.com/xml-data/corpfiling/AttachLive/9370d008-3cd0-4c36-a399-3ffa72d51fb2.pdf

11%20PM
11%20PM1520×1812 541 KB

QoQ Revenue from operation down from 11.67 Cr to 10.07 for quarter ended September 2018.
PBT down from 4.13 cr to 1.17cr for the same period.

Anyone know about their project/sales pipeline ?

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Avantel bagged an order of $1,161,710 (USD) from “The BOEING Company”.

Tooo good for a below 100 cr mcap company from India.

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Good set of numbers posted by Avantel;-

Q4 FY18-19 Q4 FY17-18 %
Total Income ₹ 15.02 crs ₹ 14.45 crs Up 3.94%
Net Profit ₹ 3.15 crs ₹ (1.29) crs Up 344.19%
EPS ₹ 7.78 ₹ (3.18) Up 344.65%

Full year EPS is 23.45.

The Board of Directors has recommended a final dividend of Rs. 2/- per equity share.
Stock looks cheap at current price, and with many new projects including the new Boeing order in hand, looking forward to much better fy20

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They have been working with Boeing for a long time.Its in one of their annual reports.Whats changed is that they are getting better at PR with time
Disc: Not invested but tracking

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Last few weeks , the promoter has keep on buying the shares from open market. FYI

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True, good observation!
2.4 % increase in past year.
Bought at average price of Rs 230.
So, promoter has ‘invested’ Rs 2 Cr.
Good sign, hopefully defense/hi-tech flow of projects continues, with China-Pak tensions as ever.
Though ETCS will be implemented by Railways and hopefully they will not need the stupid satellite based information system project of Avantel.

src = Latest Shareholding Pattern - Avantel Ltd.

image

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Good margin% improvement by Avantel in last quarter, stock looks reasonably valued.

https://www.bseindia.com/stock-share-price/avantel-ltd/avantel/532406/financials-results/

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Yes, good observation!
OPM is up consistently and substantially, further the Tax rate has fallen significantly!
On the other hand sales value has declined

https://www.screener.in/company/532406/

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Yes, the deal with Boeing is not even worth a quarter of sales of Avantel.

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