*Avantel Ltd*
CMP: 456 T1: 600+ within 6 months tops
T2: will improvise based on valuations then.
Intro
They specialize in integrating technologies related to wireless front-end, Satellite Communication, Embedded systems, Signal Processing, Network management and Software developement.
Avantel is at the fore front of innovation in satellite communication.
Avantel developed customized solutions for INSAT based mobile satellite services with advanced microwave, digital wireless communications and signal processing products for military and commercial markets.
Avantel's esteemed customers include ISRO, Indian Navy and National institute of Ocean Technology.
Brief
A few of the company’s highlights are:
• In-house R&D is recognized by the Department of Scientific and Industrial Research, GOI to meet unique and special requirements of our Defense Services, GOI.
• Strategic alliances with national institutions and research establishments in India like Space Applications Center (SAC), ISRO and DRDO Laboratories.
• CEMILAC approval for Design and Development of products and software for Airborne Systems.
• Granted industrial License by GoI for Design, Development and Manufacture of EW, Radar, Radio Communication (HF, VHF, UHF etc) & Satcom systems
• Avantel has been honored with “Excellence in Indigenous Development” by Society of Indian Aerospace Technologies & Industries (SIATI), Bangalore on 13 September 2014.
• Awarded with “IEI Industry Excellence Award 2015” by the Institute of Engineers (India) in the 30th Indian Engineering Congress to be held at Guwahati on 18th Dec 2015.
Why Avantel?
It is particularly interesting that how I came across this script. I was tracking a PE investor who is known for fetching as much as 100x gains. That investor is not at all famous/ spoken of but holds 1-10 % stake in several companies. Avantel is one of the companies in that Investor's portfolio. They own 9.25% of this company.
They are absolute gem pickers.
I will forward the development at Avantel soon. 100X gains!
Defence Exposure
Smt Nirmala Sitharaman, Defence Minister of India was the Chief Guest at the programme organized for “Transfer of DRDO Developed Technologies to Industry” at Naval Science and Technological Laboratory (NSTL), a premier naval systems lab of DRDO at Visakhapatnam. Dr S Christopher, Secretary Dept of Defence R&D and Chairman DRDO handed over documents related to NSTL developed technologies to heads of industries & DPSU (Defence Public Sector Undertakings) from M/s Bharat Dynamics Limited, Bharat Electronics Limited, Larsen & Toubro and Avantel Limited, in the presence of Defence Minister. An event which marks the ‘Make in India’ capacities growing from strength to strength in the City of Destiny Visakhapatnam.
During the event, Transfer of Technology for Light Weight Torpedo (LWT) was done to M/s Bharat Dynamics Limited which will facilitate to meet the export order to Myanmar, Technical Solutions for Integrated Anti Submarine Warfare (ASW) Defence Suite to M/s Bharat Electronics Limited and M/s L&T Defence, Technical Solutions for Fire Control Systems solution and torpedo interface technologies for ASW Upgrade to M/s L&T Defence and TOT for “Ejection System for GPS Recovery Aid” to M/s Avantel Limited.
Directors of DRDO labs and DRDO Corporate Headquarters, leaders and representatives of industry, Officers and staff of NSTL and other DRDO Labs participated in the event at Visakhapatnam. A key policy that heralds the vision of the Prime Minister, ‘Make in India’ makes India a superpower in it’s own right.
Avantel while consolidating its position with its current portfolio of Satcom and RF sub systems, has indigenously designed the 1KW HF Power Amplifier & Antenna Coupler for Indian Navy & Indian Air Force upcoming requirement 1 KW HF Radios.
Aerospace Exposure
The Indian Space Research Organisation (ISRO) has signed the first contract for an industry-built spacecraft with a consortium of six companies based in Bengaluru.
The consortium includes Alpha Design technologies, Newtech Solutions; Aidin Technologies and DCX Cables from Bengaluru; Vinyas Technologies from Mysuru and *Avantel Systems of Hyderabad*
What is the Space Activities Bill, 2017? (Can skip this)
A Bill pending before the Parliament is to encourage both the public and private sectors to participate in the space programme.
A Bill pending before the Parliament is to encourage both the public and private sectors to participate in the space programme.
What is it?
It is a proposed Bill to promote and regulate the space activities of India. The new Bill encourages the participation of non-governmental/private sector agencies in space activities in India under the guidance and authorisation of the government through the Department of Space.
According to the draft, as few start-up companies in India have shown interest in space systems activities and as space activities need participation from private sector agencies, “there is an urgent need for a legal environment for orderly performance and growth of space sector.”
When, where, who?
The draft was posted on the website of Indian Space Research Organisation (ISRO) on November 21, 2017.
Why has it been posted?
The Bill seeks comments on the draft from stakeholders and the public. ISRO has given a month’s time to read the 20-page draft and send comments.
What does the Bill propose?
The provisions of this Act shall apply to every citizen of India and to all sectors engaged in any space activity in India or outside India
A non-transferable licence shall be provided by the Central Government to any person carrying out commercial space activity
The Central Government will formulate the appropriate mechanism for licencing, eligibility criteria, and fees for licence.
The government will maintain a register of all space objects (any object launched or intended to be launched around the earth) and develop more space activity plans for the country
It will provide professional and technical support for commercial space activity and regulate the procedures for conduct and operation of space activity
It will ensure safety requirements and supervise the conduct of every space activity of India and investigate any incident or accident in connection with the operation of a space activity.
It will share details about the pricing of products created by space activity and technology with any person or any agency in a prescribed manner.
If any person undertakes any commercial space activity without authorisation they shall be punished with imprisonment up to 3 years or fined more than ₹1 crore or both.
This bill will be unanimously passed in the winter session of parliament because of it's apolitical nature. And the opposition wouldn't want to go all out against the might ISRO.
This bill would make the scattered aerospace industry a highly organised sector and also give a momentum to their order books.
Alpha Design Technologies would be the pioneer. But unfortunately isn't listed, although there are talks of a 500 cr. IPO.
But Avantel is the best microcap pick for Aerospace and Defence sector as of now!
Back to Defence
Coming to Defence. Avantel Ltd. is pioneer in Comm. Satellite services, radios and Network Jammers. A major beneficiary of India's defence spending towards Electronic Warfare.
The company is a major Defence OEM and has recieved major contracts from companies like Boeing. Avantel has delivered the mobile satellite systems for the P-8I.
The Malabar exercise which happened in June-July, clearly outlined the dominance of P-8I aircraft in anti-submarine ops.
Boeing could expect more order from the Indian Navy.
Avantel will continue to be it's most favourite OEM if such is the case.
Avantel management is part of DIIA, a government body, to promote defence R&D in the country. So, the management has a dignified role in policy making as well.
Management is pushing for a seperate corridor for Intellectual Patent for Defence and aerospace tech.
If such a bill is proposed, it will allow the companies to grab patents faster than ever and generate significant amount of revenue from Royalty and Patent infringement Law suits.
Avantel, being so confident, undoubtedly has many Patents filed up.
Last time, I talked about patents, that script shot upto 300% (Yes, Sterlite Technologies).
Credit Rating
If anyone's interested in CRISILs credit rating reports:
https://www.crisil.com/mnt/winshare/Ratings/RatingList/RatingDocs/Avantel_Limited_September_22_2017_RR.html
CRISIL has been reaffirming their credit rating since 3 years now.
But the company did a significant financial restructuring in the past 3 quarters.
We can speculate a credit rating upgrade in the near future.
Credit rating upgrade means easy availability of credit.
And that means steep rise in scalability of the company.
Railways:
Also, Avantel is an approved vendor to the Indian Railways. The contract for conducting trial in Chennai Sub-urban region (MSB-TBM & MSB-VLCY sections) has been awarded to M/s Avantel Ltd. on single tender basis as it is the sole authorized license holder of DoT for utilization of S-Band MSS service.
The sections of Chennai Sub-urban region cover 364 train services running daily, and the system is operational since 18th Feb 2012, working satisfactorily (they claim).
This was just a trial, the same model is being replicated throughout the country. They will also use Avantel Data centre for the above purpose.
Finances:
Sales better than ever.
Net sales of 14.88 cr in 09/17 VS 7.37 in 09/16.
EBITDA at 4.5cr as compared to 1.37cr last quarter and 0.95 last year.
Depreciation and Interest at all time low. Operating Profit to Interest at 58.48. OPM highest at 30.26%
ROCE building up.
Inventory of 7.7 cr
Superb P/E of 11.84 compared to Industrial average of 20+. EPS of 38.76.
For the First time they declared an interim dividend that too of 20%. Final dividend expected in July/August 2018. Highest Dividend payout ratio at 82.90%
Annual PAT will mostly double for March 18. ( Already grown 2125.90% for 1st half).
Company to primarily gain from Railway Expenditure.
Current valuation is very attractive and the stock is in uptrend.
No shares pledeged.
Promoter stake low. But one can look at redington, no promoter's stake at all. So not an issue.
CMP: 456 T1: 600+ within 6 months tops
T2: will improvise based on valuations then.
They specialize in integrating technologies related to wireless front-end, Satellite Communication, Embedded systems, Signal Processing, Network management and Software developement.
Avantel is at the fore front of innovation in satellite communication.
Avantel developed customized solutions for INSAT based mobile satellite services with advanced microwave, digital wireless communications and signal processing products for military and commercial markets.
Avantel's esteemed customers include ISRO, Indian Navy and National institute of Ocean Technology.
Brief
A few of the company’s highlights are:
• In-house R&D is recognized by the Department of Scientific and Industrial Research, GOI to meet unique and special requirements of our Defense Services, GOI.
• Strategic alliances with national institutions and research establishments in India like Space Applications Center (SAC), ISRO and DRDO Laboratories.
• CEMILAC approval for Design and Development of products and software for Airborne Systems.
• Granted industrial License by GoI for Design, Development and Manufacture of EW, Radar, Radio Communication (HF, VHF, UHF etc) & Satcom systems
• Avantel has been honored with “Excellence in Indigenous Development” by Society of Indian Aerospace Technologies & Industries (SIATI), Bangalore on 13 September 2014.
• Awarded with “IEI Industry Excellence Award 2015” by the Institute of Engineers (India) in the 30th Indian Engineering Congress to be held at Guwahati on 18th Dec 2015.
Why Avantel?
It is particularly interesting that how I came across this script. I was tracking a PE investor who is known for fetching as much as 100x gains. That investor is not at all famous/ spoken of but holds 1-10 % stake in several companies. Avantel is one of the companies in that Investor's portfolio. They own 9.25% of this company.
They are absolute gem pickers.
I will forward the development at Avantel soon. 100X gains!
Defence Exposure
Smt Nirmala Sitharaman, Defence Minister of India was the Chief Guest at the programme organized for “Transfer of DRDO Developed Technologies to Industry” at Naval Science and Technological Laboratory (NSTL), a premier naval systems lab of DRDO at Visakhapatnam. Dr S Christopher, Secretary Dept of Defence R&D and Chairman DRDO handed over documents related to NSTL developed technologies to heads of industries & DPSU (Defence Public Sector Undertakings) from M/s Bharat Dynamics Limited, Bharat Electronics Limited, Larsen & Toubro and Avantel Limited, in the presence of Defence Minister. An event which marks the ‘Make in India’ capacities growing from strength to strength in the City of Destiny Visakhapatnam.
During the event, Transfer of Technology for Light Weight Torpedo (LWT) was done to M/s Bharat Dynamics Limited which will facilitate to meet the export order to Myanmar, Technical Solutions for Integrated Anti Submarine Warfare (ASW) Defence Suite to M/s Bharat Electronics Limited and M/s L&T Defence, Technical Solutions for Fire Control Systems solution and torpedo interface technologies for ASW Upgrade to M/s L&T Defence and TOT for “Ejection System for GPS Recovery Aid” to M/s Avantel Limited.
Directors of DRDO labs and DRDO Corporate Headquarters, leaders and representatives of industry, Officers and staff of NSTL and other DRDO Labs participated in the event at Visakhapatnam. A key policy that heralds the vision of the Prime Minister, ‘Make in India’ makes India a superpower in it’s own right.
Avantel while consolidating its position with its current portfolio of Satcom and RF sub systems, has indigenously designed the 1KW HF Power Amplifier & Antenna Coupler for Indian Navy & Indian Air Force upcoming requirement 1 KW HF Radios.
Aerospace Exposure
The Indian Space Research Organisation (ISRO) has signed the first contract for an industry-built spacecraft with a consortium of six companies based in Bengaluru.
The consortium includes Alpha Design technologies, Newtech Solutions; Aidin Technologies and DCX Cables from Bengaluru; Vinyas Technologies from Mysuru and *Avantel Systems of Hyderabad*
What is the Space Activities Bill, 2017? (Can skip this)
A Bill pending before the Parliament is to encourage both the public and private sectors to participate in the space programme.
A Bill pending before the Parliament is to encourage both the public and private sectors to participate in the space programme.
What is it?
It is a proposed Bill to promote and regulate the space activities of India. The new Bill encourages the participation of non-governmental/private sector agencies in space activities in India under the guidance and authorisation of the government through the Department of Space.
According to the draft, as few start-up companies in India have shown interest in space systems activities and as space activities need participation from private sector agencies, “there is an urgent need for a legal environment for orderly performance and growth of space sector.”
When, where, who?
The draft was posted on the website of Indian Space Research Organisation (ISRO) on November 21, 2017.
Why has it been posted?
The Bill seeks comments on the draft from stakeholders and the public. ISRO has given a month’s time to read the 20-page draft and send comments.
What does the Bill propose?
The provisions of this Act shall apply to every citizen of India and to all sectors engaged in any space activity in India or outside India
A non-transferable licence shall be provided by the Central Government to any person carrying out commercial space activity
The Central Government will formulate the appropriate mechanism for licencing, eligibility criteria, and fees for licence.
The government will maintain a register of all space objects (any object launched or intended to be launched around the earth) and develop more space activity plans for the country
It will provide professional and technical support for commercial space activity and regulate the procedures for conduct and operation of space activity
It will ensure safety requirements and supervise the conduct of every space activity of India and investigate any incident or accident in connection with the operation of a space activity.
It will share details about the pricing of products created by space activity and technology with any person or any agency in a prescribed manner.
If any person undertakes any commercial space activity without authorisation they shall be punished with imprisonment up to 3 years or fined more than ₹1 crore or both.
This bill will be unanimously passed in the winter session of parliament because of it's apolitical nature. And the opposition wouldn't want to go all out against the might ISRO.
This bill would make the scattered aerospace industry a highly organised sector and also give a momentum to their order books.
Alpha Design Technologies would be the pioneer. But unfortunately isn't listed, although there are talks of a 500 cr. IPO.
But Avantel is the best microcap pick for Aerospace and Defence sector as of now!
Back to Defence
Coming to Defence. Avantel Ltd. is pioneer in Comm. Satellite services, radios and Network Jammers. A major beneficiary of India's defence spending towards Electronic Warfare.
The company is a major Defence OEM and has recieved major contracts from companies like Boeing. Avantel has delivered the mobile satellite systems for the P-8I.
The Malabar exercise which happened in June-July, clearly outlined the dominance of P-8I aircraft in anti-submarine ops.
Boeing could expect more order from the Indian Navy.
Avantel will continue to be it's most favourite OEM if such is the case.
Avantel management is part of DIIA, a government body, to promote defence R&D in the country. So, the management has a dignified role in policy making as well.
Management is pushing for a seperate corridor for Intellectual Patent for Defence and aerospace tech.
If such a bill is proposed, it will allow the companies to grab patents faster than ever and generate significant amount of revenue from Royalty and Patent infringement Law suits.
Avantel, being so confident, undoubtedly has many Patents filed up.
Last time, I talked about patents, that script shot upto 300% (Yes, Sterlite Technologies).
Credit Rating
If anyone's interested in CRISILs credit rating reports:
https://www.crisil.com/mnt/winshare/Ratings/RatingList/RatingDocs/Avantel_Limited_September_22_2017_RR.html
CRISIL has been reaffirming their credit rating since 3 years now.
But the company did a significant financial restructuring in the past 3 quarters.
We can speculate a credit rating upgrade in the near future.
Credit rating upgrade means easy availability of credit.
And that means steep rise in scalability of the company.
Railways:
Also, Avantel is an approved vendor to the Indian Railways. The contract for conducting trial in Chennai Sub-urban region (MSB-TBM & MSB-VLCY sections) has been awarded to M/s Avantel Ltd. on single tender basis as it is the sole authorized license holder of DoT for utilization of S-Band MSS service.
The sections of Chennai Sub-urban region cover 364 train services running daily, and the system is operational since 18th Feb 2012, working satisfactorily (they claim).
This was just a trial, the same model is being replicated throughout the country. They will also use Avantel Data centre for the above purpose.
Finances:
Sales better than ever.
Net sales of 14.88 cr in 09/17 VS 7.37 in 09/16.
EBITDA at 4.5cr as compared to 1.37cr last quarter and 0.95 last year.
Depreciation and Interest at all time low. Operating Profit to Interest at 58.48. OPM highest at 30.26%
ROCE building up.
Inventory of 7.7 cr
Superb P/E of 11.84 compared to Industrial average of 20+. EPS of 38.76.
For the First time they declared an interim dividend that too of 20%. Final dividend expected in July/August 2018. Highest Dividend payout ratio at 82.90%
Annual PAT will mostly double for March 18. ( Already grown 2125.90% for 1st half).
Company to primarily gain from Railway Expenditure.
Current valuation is very attractive and the stock is in uptrend.
No shares pledeged.
Promoter stake low. But one can look at redington, no promoter's stake at all. So not an issue.
Superb and detailed information about the company. Really Thanks. Sir recently this company had 2 10%. UC and yesterday also it failed to make n settled down at 2% only. Do u still advice to go at CMP or wait till any correction or any support level is there. Thanks sir. Fortunate to come across this blog.
ReplyDeleteCan't say it's completely safe. Risk toh hai boss. But, only risky investments can get you fabulous returns. I entered in SJ at 57. People were saying that it'll fall to 16 again. Yet I entered. Not only that, you can cross verify, that I suggested SJ again at ₹73. My bet paid off.
ReplyDeleteIf you can bear some risk, it's worthy to enter the script now. As far as support and resistance are concerned, these technical aspects make sense for large caps. Technical Indicators fail when it comes to microcap. Microcap rally due to their core fundamentals like growth in sales, dividends, PE as well as News and optimism.
It's not that, that I can't give a support. It's just that the T1, T2, S1, S2 don't make any sense from microcap. One factor that I can dislose is that even I bought Avantel for one of my clients at 440.
Coming to two upper circuits. BSE tweaked the circuit filter to 5%. Once it is reinstated to 10%, we can expect more UCs.
Email me at aceinvestorvaibhavv777@gmail.com
DeleteI can answer the queries better through mail.
Thanks sir.
ReplyDeleteThanks for detailed reply
ReplyDeleteI warn... I observed pattern and trading for few days, there is something fishy..!! I suggest to be away from this.
ReplyDeleteNope. I can guarantee it's neither operated or manipulated.
DeleteHello Mr. Vaibhav
ReplyDeleteIs dere any other way to connect with you. Any whatsapp or FB group. Also I would like to know if u hv any paid subscription for your stock recommendations. I am a member of ur telegram channel.
Thanks.
Vaibhav sir Avantel fell from 554.20 to 475.20... Sir whats ur view on this... I bought at higher levels too.. (554.10).
ReplyDeleteSir whata ur views on railway order and results to be declared on 27.1.2018. Is it pre-result fall?
The PE investor you are talking about.. is it K Swapna Holdings?
ReplyDeletevery well describe.. Forex trading tips
ReplyDeleteHi Vaibhav,
ReplyDeleteIs it still a buy ??
Chief....would you still consider this a buy as of today ? Kudos to the intense details you dig up.Cheers
ReplyDeleteI got into this stock based on this recommendation around 450!but it’s looks there is nonstop fall on this stock , is there a risk in this or good time for average ? Vaibhav can you pls suggest ? Thanks
ReplyDeleteGovernment asks RBI to suggest on PSU Bank merger.
ReplyDeleteCapitalstars
Great article sir thanks for sharing this kind of information. Stock market is the easyest way to make profit but you want the best stock market advisor so i suggest the best stock market advisory is wealth research financial services.Stock Cash tips are the best part of making a small investment in a single day and make a profit easily.
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