Avantel (AVANTEL)
CyclicalFairStock Score: 30/100 — RISKY
Score breakdown: P/E: 0/3 · ROCE: 2/2 · Growth: 0/2 · Dividend: 0/1
Key Financials
| Current Price | ₹158.5 |
| Market Cap | ₹4,211.52 Cr |
| P/E Ratio | 368.6 |
| ROCE | 37.06% |
| ROE | 11.1% |
| Dividend Yield | 0.13% |
| Profit Growth | 66.7% |
| Debt/Equity | 0.1 |
| Sales Growth | 35.7% |
| Promoter Holding | 37.08% |
| 52-Week Range | ₹117.05 — ₹215 |
| Sector | Aerospace & Defense |
| Book Value | ₹12.73 |
Strengths
- ROCE of 37.06% shows strong capital efficiency
- Low debt-to-equity of 0.09 provides financial cushion
- Aerospace & defense exposure suggests high entry barriers
- Still profitable at the operating level despite the downturn
- Promoter holding of 37.08% offers some alignment
Concerns
- Sales growth of -26.83% and profit growth of -86.35% point to serious deterioration
- P/E of 233.40 and P/B of 21.13 are extreme versus ROE of 11.10%
- Piotroski F-score of 3/9 indicates poor fundamental health
- Latest quarter net profit of ₹3 Cr is too thin to support the ₹3,809 Cr market cap
AI Analysis
As a value investor, I start with business quality, not price. Avantel earns a return on capital employed of 37.06%, and its debt-to-equity ratio is just 0.09. That combination tells me this is not a leveraged operation and, at its core, the business has been efficient in deploying capital. Aerospace and defense also tend to offer high barriers to entry, which can create a moat. But the price I pay determines my return. At ₹158.90, Avantel carries a market cap of ₹3,809 Cr, a P/E of 233.40, and a P/B of 21.13 against a book value of just ₹7.52. For this valuation to make sense, growth must resume in a powerful way. Instead, the figures show sales fell by 26.83% and profits collapsed by 86.35%. The latest quarter shows only ₹3 Cr of profit on ₹52 Cr of revenue. The Piotroski F-score of 3/9 is a red flag; it suggests the balance sheet and profitability are deteriorating. The dividend yield is barely 0.14%, so I am not being compensated to wait. Promoter holding of 37.08% is moderate, but it does not justify paying 21 times book for an 11.10% ROE. Graham would say this lacks margin of safety. Mr. Market may be anticipating a strong defense-cycle recovery, and perhaps he is right. But my job is not to predict the next quarter; it is to avoid paying for perfection. I would put Avantel on a watchlist, not a buysheet. I need to see profits stabilise, sales grow, and the valuation come back to a level where I am paid for risk. Until then, patience is my only position.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer