Share Price of Avantel, which is a small-cap defence stock, has surged by 2800% over the past 5 years. This phenomenal growth is due to various factors which include political developments in the state and strategic business decisions of Avantel.
Political Connections with TDP
Telugu Desam Party (TDP) led by Chandrababu Naidu recently achieved a significant victory in Andhra Pradesh’s legislative assembly elections. This political shift from YSCRP to TDP has affected the share prices of various companies like Amara Raja Energy & Mobility, Heritage Foods and KCP Limited. Avantel, which has its registered office in Visakhapatnam, Andhra Pradesh, has also benefited a lot from this. TDP’s promise to reinstate Amaravati as the capital of Andhra Pradesh has boosted confidence amongst the investors for Avantel.
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Avantel’s Financial Growth
Avantel specialized in the production of wireless and satellite communication products, defence electronics, and radar systems. It has shown an exceptional growth in previous years. Since its inception, Avantel has reported the highest turnover in FY 24 of INR 2.2 billion.
Recent Achievements and Projects
Avantel has led and completed several significant projects. Delivery of 6300 RTIS systems for Indian Railways and MSS helicopter version units to US Defence Company Lockheed Martin are some of the projects which were completed by Avantel. They have also developed MSS M II terminals for various ships and strategic vehicles. S-band hub stations and MSS terminals for the Indian Coast Guard were also developed by them. A 1 KW HF Software Defined Radio set for the Indian Air Force was created by them. Avantel is currently working on advanced HF Systems, manpacks, Ku band terminals and multi-band airborne SDRs.
Expansion Plans and New Centers
A new site is developed in Shamshabad, Hyderabad by Avantel. It is scheduled to be fully operational by October, 2024. This facility will focus on space technologies. Avantel is also establishing a new R&D and production center. Avantel’s subsidiary, Imeds Global which focuses on innovative medical solutions will use these new centers. They will be fully operational by Q3 of FY-25.
Government Support and Defence Contracts
As PM Modi’s government has been focusing a lot on self-reliance in defence, manufacturing and development in this field have increased significantly. ‘Make in India’ program and many other schemes have developed with the help of these initiatives.
Avantel has also been benefited by these initiatives as they have received several contracts by the government. Very recently, Avantel received an order worth INR 1.1 billion from the Ministry of Defence for SATCOM equipment and another contract of INR 53 million for satcom baseband equipment from the Naval Headquarters. They have also received an order from NSIL and ISRO for the supply of 30,000 MSS terminals for shipping boats.
Also Read | Surge in Shares of KCP and Heritage Foods as Chandrababu Naidu to Become Andhra’s New CM
Stock Performance
Avantel’s stock price has seen a significant increase. In the past month itself, there has been an 18% rise and over 180% in the past year. Stock Prices of Avantel reached a 52-week high of INR 140 on January 23, 2024 and a 52-week low of INR 42 on June 13, 2023. In the past 5 years, the share price of Avantel has surged by more than 2,800%.
Disclaimer
The content of this article is only for informational purposes and we do not offer any investment advice from our end. Please consult a SEBI-registered investment advisor before making any investment decision. The information does not necessarily reflect the views/opinions of the publisher.
About Author
This article has been written by Mr. Radhesh Tarang Shah, who is a third-year management student at Institute of Management, Nirma University. He has a passion for writing articles and poems. He has experience as a financial analyst, author, news writer, marketer and social worker
