Motilal Oswal has issued a buy rating on Avalon Technologies with a target price of ₹1,490 in its research report dated May 07, 2026. According to the brokerage's analysis, the recommendation is based on 40x FY28E EPS, which implies a 0.8x PEG ratio. The target price represents significant upside potential from current market levels.
Avalon Technologies delivered robust 4QFY26 results with revenue growing 40% year-on-year. As reported by Motilal Oswal, this growth was primarily driven by strong performance in US businesses, which increased 64%, and healthy performance in Indian business, up 13% YoY. The growth was broad-based across segments, with Clean Energy segment growing 76%, Mobility and Transportation segment up 35%, and Industrials segment rising 53%.
Despite strong revenue growth, EBITDA margins contracted by 20 basis points during the quarter. According to Motilal Oswal's analysis, this contraction was primarily due to lower gross margins year-on-year, with a 110 basis point impact due to tariffs. The margin pressure reflects the challenging cost environment facing the company's operations.
Based on the strong FY26 performance, Motilal Oswal has raised its FY27/FY28 earnings estimates by 2%/8% respectively. As reported by the brokerage, this upward revision reflects confidence in the company's continued growth trajectory. The enhanced earnings projections support the maintained buy rating and ₹1,490 target price.
