Loco Sat based info system is rolled out by BEL. Avantel just did the tech demonstration. Good job!
ETCS is expensive and will likely only be rolled out in a few trunk routes only.
Better results again, helped by lower taxes.
More promoter buying. 1% increase for 1 Cr. Highest level, at least since 2015.
source: https://trendlyne.com/equity/share-holding/3840/AVANTEL/latest/avantel-ltd/
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Hi Vikas, Thanks for the detailā¦does China equipment ban/non preference by govt help company like Avantel? value looks attractive for the ROE and growth projection
Hi Harsha,
There are other alternatives than China, Avantel is mainly into radio-systems and sat-com, these mainly have applications in PSU and defence related areas. There preference is already present for make-in-india since long before. I do not see any additional push Avantel can get in this situation. This is a good company, but gaining scale can be very difficult.
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Hi Vikas,
Thanks for the inform. How do you see the ban(or not preferred) on few object by the govt. on textile, electrical and telecom sector.
Below is the list I have started tracking(not invested yet)
- Avantel
- KEI Industries
- Netco ltd
- Elgi Equipment
- TCNS Clothing
disclaimer -> New to investing. Learning the craft. Not an recommendation.
Thanks for the insight
I tried to find out about this company. It looked promising as it has no debt,good niche sales and high knowledge moat point. After one day search, these are the following points observed -
- This company is baby of retired defence professionals. They have their monthly pension checks coming. So, this is just side gig for them. No burning desire to grow.
- No succession plan in place. As promoters are already ageing and most of the business is through promoterās personal contact with defence, this advantage shall vaporise.
- The company is a technology developer with major computer centric tech but its own website is dud.
- Major competitor are japanese furuno, JRC and garmin. In india bharat electronics ltd is also competitor.They are much bigger and have very good service in all international airports and ports.
Overall this company is a family firm which shall fade away in 10 yrs. Though morally upright and doing well in niche business, this is not good for investors.
9 Likes
Company signed a contract worth of Rs. 96.76 Cr (Rs. Ninety Six Crores and Seventy Six Lakhs only) with IHQ, MoD (Indian Navy), for supply of Communication Equipment for Indian Naval Ships.
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| Total Income | ā¹ 25.12 crs | ā¹ 13.56 crs | Up Tick 85.25% |
|---|---|---|---|
| Net Profit | ā¹ 4.97 crs | ā¹ 2.90 crs | Up Tick 71.38% |
| EPS | ā¹ 12.26 | ā¹ 7.16 | Up Tick 71.23% |
The annual report was out two days back here are some of the highlights and my opinion.
| FY2021 | FY2020 | |
|---|---|---|
| CFO | 446,518,961 | 30,384,885 |
| CFI | -416,762,593 | 228,440 |
| CFF | -25,455,988 | -29,795,651 |
| Net increase in cash | 4,300,380 | 817,674 |
The company had a very good year in FY2021. CFO has a significant increase due to a reduction in trade receivable and Inventory.
The company has moved most of the cash from CFO into Term Deposit. Now the Cash in a term deposit is more than 42 cr. That is 1/4 of the market cap.
Couldnāt find any update on future capital expenditure, so it not clear what the management is planning to do with the 42 crs in deposit.
Also, as per management, there seems to be assured business for the next three years with the tenders already in place.
The management remuneration is quite high at 1.8 cr which is more than 10% of PAT.
The company has zero borrowings but it pays 1.1 cr in Bank charges, it is not clear why. (AR, Page 99)
The company has a lot of cash but not distributing it to the shareholders through dividends or doing buyback.
Disc: Not invested
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whats the relevance of this information? We call can see this ā¦
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Avantel has collaborated with L & T who has bid as Lead system integrator for implementing the RTIS (Realtime TrainInformation System) project of CRIS, Indian Railways. L& T has been declared as the successful bidder. Avantel therefore shall be supplying the IRN (Indian Rail Navigator) and RMT-L (Rail Mount Terminal-Loco) to be installed on 6300 Locos, if L&T is awarded the contract by CRIS, Indian Railways as they are declared as successful bidder.
Big Opportunity?
2 Likes
Avantel has received an order of $19,80,000 from āLockheed Martin Corporationā for Satcom Equipment supply.
Is it the first time they have received order from Lockheed Martin, or an existing customer? It is the largest listed defense company in US and the U.S. government is its biggest customer. So very good news!
**
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The company has announced yesterday that it is considering formation of a WOS for entering into Healthcare Software and Solutions.
The company is having good cash in its books and so finally it is nice to see them deploying the same. The recipe of a good stock is the one having high Returns on Investments and which can do prudent capital allocation. Avantel has met the first condition consistently & now it will be interesting to see the capital allocation they do.
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Announcement of incorporation of wholly owned subsidiary for manufacturing of medical devices. Looks good bet since very soon Govt. is planning for reforms in the regulatory rules and regulations.
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Quant Tax Plan/ELSS fund bought Avantel last month. Is this the first DII/Mutual Fund took position in it? Company is getting noticed by institutions, and has a long way to go.
I think, Avantel deserves much higher valuation in this market.
ā It is the only company to provide satcom equipment/software/maintenance to Indian defense sector. These products developed by Avantel are to meet unique & customized requirements of Indian defense services (Indian Navy, coast guard, ISRO and others). Developing these products requires lots of effort/investment and R&D, and more importantly exhaustive time consuming trials conducted by Indian defense services.
ā These products are not available from any other company in India. So company has virtually no competition. Avantel goes through the 4/5 years of development process, and then exhaustive trials, so even if the customer gives opportunity to other companies, it will take lot of time to develop these products to meet their special customized requirements.
ā Also company has orders from Boeing and Lockheed Martin. āLockheed Martinā is the biggest US defense contractor(number one), Rank 49 in Fortune 500. They work in US Aeronautics, Missiles/Fire Control, Rotary/Mission Systems and Space; They manufacture and support advanced combat, missile, rocket, sensors, radar systems, command/control combat simulation/training, advanced cybersecurity and undersea systems for customers that include the U.S. Army, Navy, Air Force, Marine Corps, NASA and dozens of foreign allies. I think this is huge breakthrough for Avantel.
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Company has received new order from Bharat Electronics.
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The companyās recent result shows healthcare as a segment which relates to the recent incorporation of Inmeds global Pvt limited. Is there any information as to what sort of medical devices or equipments they are venturing in?
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As per MCA records IMEDS GLOBAL PRIVATE LIMITED is involved in activities such as (Manufacture of medical, precision and optical instruments, watches and clocks) Manufacture of other watches and clocks n.e.c. : time of day recording apparatus and apparatus for measuring recording etc. of intervals of time with a watch or clock movement or with synchronous motor, time switched with clock or watch movement or with synchronous motor.
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imedsglobal.com website is operational giving a list of all the products which they are manufacturing and selling. Ventilators, Oxygen concentrators, Surgical Staplers, and Home Monitoring devices. Website claims that they have 450 customers with 650000 products sold.Looks interesting
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The recent quarter financial results show that there is no revenue in Health Care segment. So it is surprising that iMeds already has 450 customers with 650K products sold. I suspect that it is just some random data used for website testing.
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