Avantel Limited

Avantel reported a strong performance in the last financial year with increased top-line and profits, though specific Q4 FY24 figures were not provided in the transcript. The company currently holds an order book of approximately ₹287 crores, including a recent order worth ₹107 crores. Management also highlighted successful collection of receivables, with ₹39 crores received from a total of ₹68 crores in the last quarter, and an additional ₹11 crores expected by June or July.

Avantel is strategically diversifying into Software Defined Radios (SDRs), targeting the Indian defence market, which is estimated at $300 million per annum. The company aims to be among the top five players in this segment in India within the next three to five years. Avantel is developing SDR products compliant with global standards for various frequency bands and platforms, including portable, handheld, vehicle-borne, and shipborne versions, with potential for global market expansion.

The company is expanding its presence in the burgeoning space sector, which the Indian government projects as a $50 billion opportunity over the next eight to nine years. To leverage this, Avantel is establishing a facility in Hyderabad's Electronic City for ground station as a service, encompassing satellite operation and mission control, and for the assembly, integration, and testing of satellites up to 1000 kg. This facility is expected to be fully completed by the end of the current year.

Avantel is developing medical equipment under its I-Max initiative, focusing on respiratory devices, endoscopy, and surgical staplers, having secured a contract for 25,000 surgical staplers per month. Management projects I-Max revenue to reach approximately ₹2.5 crores next year, growing to ₹10-15 crores the following year, and targeting ₹100 crores by 2030. The I-Max segment is expected to break even and achieve cash profit by next year (FY25), with profitability anticipated in FY25-26.

Avantel has secured five IDEX projects from the Ministry of Defence, with two contracts already signed and another in the final stages for June/July. These projects are supported by government grants totaling ₹24.5 crores and position Avantel as a potential single vendor for specific Indian Army requirements. Development for these projects is expected to be completed within 1.5 to 2 years, with trials anticipated by December of the third year.

The company is significantly increasing its R&D investment, particularly in software-defined radios and satellite subsystems, anticipating manpower expenses in R&D to grow substantially over the next three to four years. Additionally, Avantel confirmed its plans for NSE listing, which is expected to commence next month after the AGM and be completed within three to five months this year, aiming for completion within the current year.

While Avantel anticipates stability and profitability for the next two years, it refrained from providing specific growth rate guidance due to dependence on Indian market orders. However, the company expects an additional ₹60 crores order from Indian Railways within one to two months, with a potential tender for 12,000 terminals. The NSIL order, valued at approximately ₹27.6-30 crores, is expected to be completed by November this year.