Avalon Q2 FY27: Consolidated PAT Up 59% YoY, Revenue +37%, NPM Expands to 7.6%

Avalon Technologies' consolidated Q2 FY27 revenue came in at ₹525.4 Cr, up 37.4% YoY and 8.5% QoQ, with consolidated PAT of ₹39.84 Cr, up 59.5% YoY and 14.2% QoQ — EPS of ₹5.96 against ₹3.73 a year ago. Net profit margin expanded to 7.58% from 6.40% YoY-ago and 7.16% last quarter, continuing a three-quarter expansion trend; EBITDA margin (OPM) also moved up to roughly 13.1% from about 10.1% YoY-ago. Both revenue and the margin trajectory land at or above the top of the on-plan range we flagged pre-result (₹430-480 Cr revenue, 6.5-7.5% PAT margin), and the 37.4% YoY revenue print clears even the FY27 growth guidance that management raised to 26-30% after Q1 (from the 24-27% guided at the Q4 FY26 call) — a clear beat on both guidance and the pre-result street read, which had been cautious on valuation (median target ₹1,350 against a Nov 6 close of ₹1,893.6) even as FY27/FY28 EPS estimates were being raised. The margin bridge is not evenly split across the group, though: standalone PBT and PAT both fell year-on-year (PAT ₹21.02 Cr vs ₹24.76 Cr, -15.1%) even as standalone revenue grew 23.9% to ₹255.6 Cr — cost of raw materials and other expenses outpaced revenue at the India entity. That means essentially all of the consolidated profit outperformance this quarter came from subsidiaries, consistent with management's prior commentary that the capex-light EMS model and the U.S. operations (ABV Electronics/Sienna Corporation) were progressing toward breakeven; this is a >3% divergence between standalone and consolidated growth stories, worth flagging since readers comparing the two tables will otherwise see what looks like a contradiction. Several board actions this quarter tie directly into the subsidiary-driven story: a ₹55 Cr corporate guarantee for wholly-owned Avalon Technology and Services, a ₹50.5 Cr guarantee for U.S. unit ABV Electronics, and an ₹11 Cr convertible-note investment for a 2.26% stake in Singapore's Revos Auto Tech (EV charging infrastructure) were all approved at the same meeting. Two watch items we flagged pre-result were also confirmed in the filing's notes: the Zollner Avalon JV (51:49 with Zollner Elektronik AG, for PCBA/box-build/system integration) was incorporated on October 19, 2026, and the ₹425 Cr preferential warrant issue (19.37 lakh warrants at ₹2,193.20 each) to Zollner Elektronik AG was approved October 27 and now awaits shareholder sign-off. Separately, promoter Bhaskar Srinivasan and family trusts (9.42% combined holding) had their request to reclassify from Promoter to Public category approved, subject to regulatory approvals. Management's own release framed the quarter as "Revenue Up 37.4% YoY" with a bullish outlook; the numbers agree on the topline but understate that the India standalone business's profitability actually contracted this quarter. Going into Q3, the open questions are whether the Zollner JV and the warrant-funded capacity start contributing to standalone numbers (closing the gap with consolidated growth), how the U.S. subsidiary's path to the "late FY27" breakeven management guided to is tracking, and whether the raised 26-30% FY27 growth guidance holds for the remainder of the year given this quarter already ran well ahead of it.