Avalon Technologies Ltd (NSE: AVALON) Q4 2025 Earnings Call dated May. 07, 2025
Corporate Participants:
Kunhamed Bicha — Chairman and Managing Director
Suresh Veerappan — Chief Financial Officer
Analysts:
Deepak Agarwal — Analyst
Deepak Krishnan — Analyst
Praveen Sahai — Analyst
Aditya Bhartiya — Analyst
Bhoomika Nair — Analyst
Meet Jain — Analyst
Jalaj — Analyst
Chirag — Analyst
Rahul Gajare — Analyst
Uttham Kumar — Analyst
Vipraw Srivastava — Analyst
Vipin Goel — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to the Avalon Technologies Limited Q4 and FY ’25 Earnings Conference Call hosted by Axis Capital Limited. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr Deepak Agarwal from Axis Capital Limited. Thank you, and over to you, sir.Good afternoon, everyone, and a warm welcome to the Q4 FY ’25 earnings call of Avalon Technologies. To take us through the results today, we have with us from the management, Mr Vicha, Chairman and Managing Director. I’m sorry to interrupt Nicol, you’re not audible. Ladies and gentlemen, the management’s line has been disconnected. Would request you to stay online while I reconnect.
Thank you ladies and gentlemen, the management has been reconnected. I now hand the conference over to Mr. Deepak Agarwal. Please go-ahead.
Deepak Agarwal — Analyst
Good afternoon, everyone, and a warm welcome to the Q4 FY ’25 earnings call of Avalon Technology. To take us through the results today, we have with us from the management, Mr Kuna Vicha, Chairman and Managing Director; Mr Bhaskar Srivasan, President; Mr Suresh Vir, Chief Financial Officer; and Mr Shriram Vijar Agawan, Chief Operating Officer; Mr Venki Venkatesh, Chief Sales Office; and Mr Michael Robinson, Chief Operating Officer for the US operations. MR. MR. Will give an overview of the business performance and will be followed by Mr Suresh’s remarks on the financial performance, post which we’ll open the floor for Q&A. As we move forward, it is important to bear in mind any forward-looking statements made during this call are subject to potential risks and uncertainties. Both known and unknown.Now, without any further delay, I’ll hand over the floor to Mr for any initial remarks, the CMD. Thank you and over to you, sir.
Kunhamed Bicha — Chairman and Managing Director
Thank you. Thank you, Deepak. Ladies and gentlemen, on behalf of Avalon Technologies, we extend a very warm welcome to our Q4 FY ’25 earnings call. I will quickly introduce Avalon Technologies, especially for the ones who are joining us for the first time. Avalon Technologies established itself as a key player in electronic manufacturing services with a global reach. We take pride in our leadership in high-mix flexible volume manufacturing. We currently operate across 14 manufacturing facilities in India and United States.
Our three key differentiators are: one, vertical integration, we offer a complete solution from PCB design, new product Development to final product manufacturing. Two, our global presence, both in terms of manufacturing presence and customer-base. Three, optimal mix of established industries like industrial, rail, aerospace, communication and emerging industries like clean energy. Now turning to our business performance. I would like to begin by thanking all our investors for your continued trust and confidence in Avalon. As we celebrate our 25th anniversary, it is not only a time to reflect on our journey, but also look-forward. Over these years, India has evolved to be a well-established global manufacturing hub. With this shift, the outlook for electronics manufacturing service industry and for Avalon in particular is very encouraging. We believe the road ahead holds even greater opportunities. In Q4 FY ’25, our revenues grew by 58.1% year-on-year. For the full-year, we achieved 26.6% year-on-year revenue growth. This growth was — has been broad-based, well-diversified across sectors and geographies and consistently deliver in a dynamic environment. We continue to see strong demand from our customers, both in India and the US and remain confident in our strategy for sustainable and profitable growth. On gross margins, we are pleased to report that Q4 FY ’25 came in at 35.1% at the upper-end of our guidance of 33% to 35%, supported by operating leverage, our EBITDA margins for the quarter stood at 12.1%, profit-after-tax came in at INR24.3 crore, marking a 244% increase over Q4 FY ’24. As of March 31, 2025, our order book stood at INR1,761 crores with an average execution period of 14 months. In addition, long-term contracts with execution timelines of 15 to 36 months grew by 18.3% year-on-year to INR1,123 crores. Our year-on-year order book growth improved from 11% in FY ’24 to 29% in FY ’25. This order book growth has been well-balanced and diversified across industry verticals and geographies. We have also made meaningful progress in optimizing our working capital. Net working capital days improved from 161 days in March 2024 to 124 days in March 2025, an improvement of 37 days, better than our guidance of 10 to 15 days. This reflects our ongoing efforts to drive operational efficiency. In Q4 FY ’25, our manufacturing plant — our US manufacturing plant contribute contributed 16.6% of total revenue. Meanwhile, our India-based operations, which catered to both domestic and global customers accounted for 83.4% of revenue during this quarter. The India operations remains highly profitable, delivering an EBITDA margin of 14.8% and a PAT margin of 9.6%. We had previously outlined our three key drivers of growth, our existing US business, new US businesses and our ever-expanding India businesses. We are encouraged by the traction across all three, which reinforces our confidence in growth opportunities ahead over the next decade. At the same time, we are closely monitoring evolving global trade dynamics, including tariff negotiations and macroeconomic developments, which could influence manufacturing flows worldwide. India continues to benefit from strong industry tailwinds and we are seeing sourcing additions include increasingly moving towards India’s favor. Avalon’s dual manufacturing presence in both US and India positions us well to navigate these shifts. On one-hand, higher on imports from select countries are driving opportunities to India to merge as a preferred manufacturing hub. Resulting in an increased engagement from global customers aiming to diversify their supply chains. At the same time, our US manufacturing facility offers strategic flexibility to support customers looking to localize production and meet regional requirements. On the other hand, policy uncertainty and its impact on the US economy call for continued agility and disciplined planning. Considering this, we are adopting a more measured outlook for the first-half of FY ’26 with expectations of improved momentum in the second-half as visibility strengthens. Accordingly, we are approaching FY ’26 with measured optimism, mindful of the macroeconomic environment influenced by policy additions. We are guiding for a revenue growth of 18% to 20% for FY ’26 and will reassess this as the year progresses, in-line with market developments. Now moving to our key wins, we are making meaningful progress towards volume production across several ongoing projects. These include products for global auto components, home electrification systems. We are also developing new products across industry verticals, including rail, industrial, infrastructure, clean-energy and communications segments. Some examples include backup power systems, transmission systems, aerospace cabin products and locomotive — locomotive engine systems. Over the past year, we secured several new projects across industry verticals, which are progressing in-line with our expectations. Moving from design of prototype stage to production. Many of these are expected to ramp-up during the current financial year and support our strategy of deepening customer engagement across diverse end-markets. In addition, we entered — we are entering new sophisticated advanced technology segments that are — that play a critical role in enabling next-generation electronics and digital infrastructure. While these initiatives are still at an early-stage, we see encouraging potential and we’ll share further updates in the coming quarters. To support this series of new product introductions and the anticipated growth, we are scaling up our operations in advance of the project ramp, as a result, we expect the second-half of FY ’26 to be stronger than the first. While FY ’25 has been a pivotal year in setting the foundation for growth in FY ’26, we are going to focus on scaling capacity, deepening customer engagement and building strategic partnerships. On the infrastructure front, we are pleased to share that the new export-focused manufacturing plant in Chennai is now complete and has fully commenced production. In parallel, Phase-2 of our brownfield expansion in Chennai aimed at addressing rising domestic demand has also been initiated. We continue to strengthen our capabilities and capacities. As part of this, we are enhancing our technical competence through strategic collaborations, including our partnership with Zepco Technologies. Involved the design and manufacture of motors, drives, controllers and power solutions serving sectors as drones, electric vehicles and defense. This collaboration supports our efforts to gradually build capabilities in select emerging technology areas. In summary, unique business model anchored in its dwell manufacturing presence across India and US offers customers the flexibility. Our ability to serve diverse end-markets, adapt to changing trade dynamics and invest ahead of growth puts us in a strong position for the future. With that, I would like to hand over the call to our CFO, Suresh Veerappan, for a detailed overview of our financial performance.
Suresh Veerappan — Chief Financial Officer
Thank you so much. Thank you. Thank you, KB, and good afternoon, everyone. Thank you for joining the call today. FY ’25 has been a pivotal year for us marked by profitable growth. Let me begin with our Q4 FY ’25 performance. We recorded revenue of INR343 crores, year-over-year growth of 58.1% compared to INR217 crores in Q4 FY ’24 and a sequential growth of 22.1% over the previous quarter. For the full-year FY ’25, revenue from operations stood at INR1,098 crore, reflecting a 26.6% year-on-year increase, exceeding the guidance we had provided earlier.
Our geographical revenue split for the quarter was INR47 and 53 with India contributing INR160 crores and the US contributing INR193 crores. For FY ’25, our geographical revenue split was 43 and 57 with India contributing INR477 crores And US contributing INR621 crores. Our gross margin for Q4 FY ’25 stood at INR120 crores, reflecting a 47.7% year-over-year increase from INR81 crores in Q4 FY ’24. Sequentially, gross margin grew by 14.7%. For the full-year, we delivered a gross margin of 35.8%, which remains among the industry’s leading levels. EBITDA for Q4 FY ’25 stood at INR41 crores, reflecting an 139.6% increase from INR17 crores in Q4 FY ’24. This resulted in an EBITDA margin of 12.1%, up by 410 basis-points from 8% in the same-period last year. For the full-year, EBITDA stood at INR115 crores, representing a year-on-year increase of 83.7%. EBITDA margin for FY ’25 was 10.5%, marking an improvement of 325 basis-points over the previous year. PAT increased to INR24 crores, a 243.8% year-over-year increase from INR7 crores with a PAT margin of 7%, up by 380 basis-points from 3.2% in Q4 FY ’24. For FY ’25, PAT stands at INR63 crores, an increase of 126.7% from INR28 crores in FY ’24. Our profitability continues to strengthen, delivering sustained growth. Net working capital days improved to 124 days in March ’25 from 161 days in March ’24, an improvement of 37 days exceeding the guided reduction of 10 to 15 days. Net inventory days improved to 86 days in March ’25 from 118 days in March ’24. Trade receivables increased slightly to 84 days in March ’25 from 79 days in March ’24. Trade payable days improved to 46 days from 36 days over the same-period, reflecting better terms with our vendor partners. For FY ’25, cash-flow from operations reached INR25 crores, up from INR17 crores in FY ’24. The improvement is due to better working capital management and profitable growth. As of March 31, our total outstanding debt stands at INR141.7 crores. With cash equivalents and investments at INR134.7 crores, resulting in a marginal debt position of INR7 crores. Our capex for Q4 FY ’25 and FY ’25 was INR25.1 crores and INR57.8 crores, respectively. With a capex-light model, our asset turns are at 7.5 times. Building on FY ’25’s revenue growth, we are approaching FY ’26 with measured optimism mindful of prevailing macroeconomic environment. To conclude, we are encouraged with the consistent momentum across all three of our growth engines. Our continued focus on operational efficiency, working capital management and strategic execution positions, we are well-positioned to capture the opportunities ahead and creating lasting value for our shareholders. Thank you. Over to you Deepak.
Questions and Answers:
Deepak Agarwal
Thank you sir ladies and gentlemen we will now begin with the question-and-answer session. Anyone who wishes to ask a question may press star N1 on their touchstone phone. If you wish to remove yourself from the question queue, you may press star N2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.
Operator
The first question comes from the line of Deepak Krishnan from Kotak Institutional Equities. Please go-ahead.
Deepak Krishnan
Hi, sir, am I audible? Yes, sir. You are. I just wanted to sort of understand, obviously, we’ve given a slightly measured guidance of 18% to 20% given near-term uncertainty. But just wanted to understand both from a near-term perspective as well as you know, from a medium-term perspective, like is there any disruption in terms of orders shorter-term or you seeing work getting stalled because of tariff uncertainty?
And secondly, on the medium-term, is that leading to more conversations of volume sort of shifting and who they want to do it in India or US or any sort of commentary around both the shorter-term impacts as well as longer-term conversations that we are having with our clients with respect to this tariff uncertainty that is there.
Kunhamed Bicha
Thank you, Deepak, for your question. See, we are uniquely portioned in this scenario because we have factories in the US as well as in India. So I think either way, what we see is that taking India, for example, is a better pushioned than most other countries as it stands today, changes every day, but as it stands today. And if customers want to make it in the US before the transfer to India, the new customers I mean want to make in the US before transferring to India in the — in the mid or longer-term, that is also possible. So we are seeing different parts of this play-out.
And customers are also cautious because they are not sure how they are going to — the whole policy situation is going to play-out. So I think as of now, we are fairly confident with all the news around, we want to be cautious, optimistically cautious, let me put it that way. But I think there’s a lot of growth ahead for us with the programs which we have signed-up for with customers, especially the new programs. Did answer your question, Deepak?
Deepak Krishnan
Yeah. So for FY ’26, should we assume sort of a higher in the percentage in terms of the overall mix because of maybe 1Q there is uncertainty and then things gradually recover, does India become like a 60% contributor this year? Is that what you are looking at in terms of order book or that’s not the case today?
Kunhamed Bicha
So let’s — if you go back three years, Deepak, we are an export-focused company where it was 30%, India, 70% export. And our goal in the last 18 months is to have the 50-50 mix, 50% export and we keep looking at domestic, which is India. And as you can see over the few quarters, we have come to 47% India in the last quarter and 53% export.
And we see the trend continuing. As India evolves, we are seeing a lot of our customers in rail. You’re seeing a lot of customers in the infrastructure side of things and industrial. And we are confident that the India number is going to go up and that’s where it’s just not an export focused — US focus.On the other side, we are seeing a lot of activity in our US factory with customers was requesting what it will take for new programs to build-in the US with a cost over-time and they see an easier path to India once the tariff situation settles down.
Maybe just one final thing, you know, is tariff an element that can be passed-through customers in your contract or a you know in a worst-case outcome, would we have to take some impact on our end or is it mostly like a for us once we get some certainty on tariffs?
Deepak Krishnan
It’s 100% pass-through, okay. And in the US, we have also been dealing with the Chinese tariffs for US customers, which is 35% 40%. For the last couple of years, we’ve been passing it through.
Sure. Sure, sir. Those are my questions and best of luck for future quarters.
Kunhamed Bicha
Thank you, Deepak.
Operator
Thank you. Participants, please restrict yourselves to two questions. If you have any more questions, you may rejoin the queue. The next question comes from the line of Praveen Sahai from PL Capital. Please go-ahead.
Praveen Sahai
Yeah. Thank you for opportunity. My question is related to the order book, which is you had some 29% of a growth. If you can give some more detail on that, how is the geographical mix in that or a sector bifurcation? And also related to that, even after 29% of a growth, you are talking about, 18% 20% of a growth in revenue because the customers are a little cautious. So you are seeing some delay in the order as well from the customers?
Kunhamed Bicha
No, Pravir, we are — we are cautious. The customers — so-far, we don’t see — it’s not like what we had seen with the destocking situation. so we don’t see too much of a slowdown from customers. But if the economy slows down, there could be some slowdown is all that we are planning for. And as you’ve seen last year, every quarter, we had come back and revised our guidance. We’d like to follow-through and do that as things progress.
Praveen Sahai
And on the first part of the question is. On the order book mix, it closely resembles the revenue mix. So India will be approximately 45% and US will be 55%. And sector is also similar in the order book, sector bifurcation.
Kunhamed Bicha
So if you actually look at what by sector, we have seen growth across every one of them, all the five sectors and these are significant growth across-the-board. So that’s why we are confident in projecting this. It’s just not a for example, clean-energy is at 66% growth. Communication is 53% growth. Industrial is 35% growth. Mobility is 13% — 113% growth.
Praveen Sahai
Okay. Okay. Okay. And on your receivable part, which you.
Operator
Please to those was your two questions. I would request you to rejoin the queue for further questions. Thank you.
Kunhamed Bicha
Thank you.
Operator
The next question comes from the line of Palaash Gandhi from Investec India. Please go-ahead.Hello, please go-ahead. Yes, please go-ahead.
Aditya Bhartiya
Hi, sir. This is Aditya from Investec. Sir, just wanted to confirm once again. So you mentioning so-far you haven’t really seen any major slowdown. It’s only going-forward that you’re fearing that the US economy may slow-down and therefore, you are building in such a conservative estimate. But as far as April and whatever little we have seen in May is concerned, you’re not seeing customers pushing back on deliveries or at this stage going.
Kunhamed Bicha
Aditya, historically, we’ve been light on Q in the first-half and heavier on second-half, which will continue to go through. But to answer your question, we are not seeing anything significant happening, but it’s just the news every day is just throws it off of bed. But we just be cautious, but there is enough growth in the system, okay. We are just not — we just not what a say committee and we always committed for the last year or so that we will double in three years and we are still sticking to that commitment.
Okay. So it may be a one slow quarter, but it’s still there in the past. And some of the customers signing-up are fairly large.
Aditya Bhartiya
Sure. Understood, sir. And sir, given that our capacity has also now increased, what does this 18% to 20% growth mean in terms of capacity utilization? Do you think we’d be left with the — with excess capacity and therefore risk of uninsorbed overhead.
Kunhamed Bicha
We’ve been — it’s — we’ve been planning for a growth in the sense of people and building earlier than it’s coming. So a good sign or bad sign, I’m not sure. We built this new export facility, which is supposed to take care of us for 12 to 18 months. But I’m happy to say that in four months, it’s filled out and different projects have started there. So we’re building a newer facility or updating a newer facility. The same goes with India. We are building up the buildings earlier and getting the people in for the projected projects to come in a bit earlier, there’s going to be a couple of months of lag before the projects kick-in. So that’s going on. So we are confident of the growth. And you’ve seen as we managed 50%, 58% growth quarter-over-quarter — year-over-year quarter and we didn’t break a sweat doing that.
Aditya Bhartiya
Perfect, perfect. Thank you so much, sir. Helpful.
Kunhamed Bicha
Thank you.
Operator
Thank you. The next question comes from the line of Bhoomika Nair from DAM Capital. Please go ahead.
Bhoomika Nair
Good afternoon, sir, and congratulations on a good set of numbers. Sir, my first question is on aspect of the new client additions that we’ve done in the last year, year and a half. How is that progress moving, which clients are you seeing scaling up quite sharply, both in US and in India, which has moved to now from a prototype to a mass production kind of a phase? And which areas are you seeing really new client additions happening per se, if you can just give some more of qualitative color on which segments are seeing improvement in terms of the trajectory? That’s my first question.
Kunhamed Bicha
Thank you,. So it’s broad-based, but let me just put it in perspective. So clean-energy, for example, was slower last year, but that can be able year before ’25. So you’ve seen a growth of 66% last year and we’ll continue to see that with this addition of new customers. On the infrastructure side in India is where the larger growth piece is going to come in and we are setting up for that. It is not yet coming and we believe that will play-out in, I think late part of Q2, if not earlier, of Q3 for sure. We are seeing that piece. Rail, we’ve got six or seven new products in different types of NPI to production, which will kick-in later part of this year.
Industrial, multiple customers in both the geographies, we are seeing significant growth. It’s a little bit lower than the other two, but it’s broad-based. And most of these customers are Fortune 500 type customers and not startups or anything. And clean-energy, I thought it we’re going to see significant growth in the US, especially.
Bhoomika Nair
Okay. And in the quarter, we saw very strong growth in terms of the mobility segment. You know, is this something now as a steady run-rate that we should look at as we move into the next year because we’ve seen growth on new customer additions and a scale-up in both and aero. So should that kind of continue into the next quarter — next year as well at this run-rate?
Kunhamed Bicha
Yeah. But on yearly basis for sure because there’s multiple projects which are going to come in also. And this is not including Kavaj and all that, okay. And that is all-in progress, progressing very well, okay. And on the aero side and rail side, multiple projects have kicked-in and some of it you see already playing out. We have few more coming in. So I would assume that it is going to continue and that’s all-India.
Bhoomika Nair
Sure. And if I might just squeeze in one more question on the margin profile. India margins are doing quite well. We’ve reported about 14.5% kind of margin as such out there. I think the US business to some extent remains a drag. How do we see that progressing, particularly when we’re seeing perhaps with the trade tariffs, et-cetera, a lot of clients actually looking to do more prototyping in US. Do you see that kind of turning around or will that kind of remain a drag? What kind of timelines, if any, should we look at?
Kunhamed Bicha
Yeah. So we’ve always mentioned US because we are present in the US in for the long-term and today this is unique situation where it’s just not cost, it’s location. So I think it will play-out well. The margins won’t be as high as what we see in India, which is 14.8% EBITDA and 9.6% last quarter. But in ’26, I’m fairly sure that it is going to make a reasonable amount of money.
Bhoomika Nair
Sure, sir. Great. All the best. I’ll come back-in the question queue. Thank you so much.
Kunhamed Bicha
Thank you,.
Operator
The next question comes from the line of Meet Jain from Motilal Oswal Financial Services Limited. Please go-ahead.
Meet Jain
Hi, sir. Congratulations on the good set of numbers. My first question is regarding our order book and our revenue guidance. Seeing the order book, like we mentioned the order book is average 14-month order book like it just to around, let’s say, INR1,500 kind of crores, but what we gave a guidance is far less than that. And when you give a commentary on the segment-wise, we are estimating a very strong growth across segments.
Just want to understand, is it really optimism like a conservative number or are we seeing an early signs in the US slowdown what we have seen in the past two years because of the order book and everything. Can you just highlight — give some more color on that?
Kunhamed Bicha
Yeah. So you used the exact two words, Meet, we are cautiously optimistic at this point, right. And you use that. So that’s what exactly we are — I think there’s a lot more growth in the system. We are just making sure that things settle down with the macroeconomics and there’s enough new customers to fill the growth. So it is more of you know erring on the side of caution rather than going out and saying a number and chasing it. And for us, see, we’ve never had a strong India pushion when we — a couple of years back when we got into the US slowdown and that time India was probably around less than 30%.
Today, India Is 47% and growing. So between the two economies, we should be okay.
Meet Jain
Understood. So just as a differentiator, what mitigating factors are will we have implemented in-place to avoid that kind of period like last two years if the US goes into slowdown or something like that.
Deepak Agarwal
So we are seeing substantial pieces coming to India itself and there are new customers coming to US. So even if there is a slowdown in existing customers, it’s not going to be a stocking — destocking situation where they stop. So instead of taking 100 parts, they may take 80 parts, okay. So it’s not an alarming situation like what we went through a couple of years back.
Kunhamed Bicha
So we are just being cautious and not — I think the orders are there. It’s broad-based, it’s exciting for us on both segments and they are more coming. And so that’s the key.
Meet Jain
Understood. The second question is on the margin part. So can we expect FY ’26 to show some positive buyouts on FY ’25 levels in terms of margin going ahead?
Kunhamed Bicha
So we will still continue to say 33% to 35%, okay. In certain quarters, you may see a little bit higher. Certain quarters will be in that range.
Meet Jain
And what about EBITDA margin?
Kunhamed Bicha
So you want to answer that?
Suresh Veerappan
We generally do not provide the guidance at the EBITDA level, PAT level, but like what KBC would like to reiterate that 32% to 35% is a reasonable number for us to look at the gross margin level. Some quarters may be higher, some quarters may be at rates.
Meet Jain
Okay. Also just to clarify, like this in this year FY ’25, we ’25.
Operator
Meet, those were your two questions. If you have any more questions, please rejoin the queue. Follow-up.
Meet Jain
Okay.
Operator
Thank you.
Kunhamed Bicha
Thank you. Thank you, Meet.
Operator
Thank you. The next question comes from the line of Jalaj from Swan Investments. Please go-ahead.
Jalaj
Yeah. Hope I’m audible.
Operator
Yes, yes, please go-ahead.
Jalaj
Yeah. First of all, thanks for the opportunity and congrats on a great set of numbers. Sir, my first question was, what exactly happened or what went through in the gross margins for this quarter in particular? Could you help us understand that because that will help us to project 4th-quarter going-forward? There is a drop-in the gross margin this quarter. So what helps? What explains that?
Kunhamed Bicha
So the guidance range, what we mentioned earlier is 33% to 35% of gross margins. We are there at the upper-end of that guided range. The previous quarters may have been little higher because of the product mix, but we’ve always maintained that 33% to 35% is a reasonable number to look at. From a full-year perspective, we are at 35.8%. So I think that is a reasonable number to look at, Jalash.
Jalaj
Okay. Understood. So basically — so just a little bit be hopping onto it a little. So considering the order book we have in-hand in the product and the industry-wise mix, 33 to 35 looks a reasonable one. Is that my understanding correct going-forward also?
Kunhamed Bicha
Yes. In certain quarters, you will see an upside. I mean like I know where you’re coming from. We’ve always said 33% to 35, but a few quarters we’ve been 37% and odd. And we’ll — of course, our endeavor is to be higher and we will try to get there. But I think you should take 33% and 35 as your range.
Jalaj
Got it. That was sir. And secondly, on your aspiration of 3x of double the revenue in three years, the base, what year base are we considering? And what sort of mix should I see across US and the India business across it?
Suresh Veerappan
One, it is from FY ’24 to FY ’27. Yeah. And in terms of growth engines, like we mentioned earlier, we’re seeing growth opportunities across India, existing business in US, the new projects in US. We’re seeing growth opportunities on all three. The aspiration is to be 50-50 between India and US. Some quarters we may see some industry verticals growing little faster, some geographies growing little faster. But the aspiration is to be 50-50.
Kunhamed Bicha
And today we are at 47 India 53. It is little earlier than we expected.
Jalaj
So sir, I understand that India as an industry or the market is growing by those were your.
Operator
Two questions. I would request you to rejoin the queue for any further ones.
Jalaj
Thank you.
Operator
Thank you. gentlemen. The next question comes from the line of Chirag from Keynote Capital. Please go ahead.
Chirag
Yes, sir. Thank you for the opportunity. Sir, my first question is related to raw-material sourcing. Could you like — could you make me understand like do we procure bare PCB from India or is it from another country? And if you could provide the mix for the same answer that?
Suresh Veerappan
Yeah. So we are we source materials globally, so wherever available in India, we would source locally. And wherever sometimes it is required to import the materials, we would do that. So it depends on the commodity and depends on the particular build. And also sometimes complexity and type of product.
Chirag
Any ballpark number to understand if there is any dependence on a particular country at this point?
Suresh Veerappan
No, it’s — it’s all over the world. So it depends, right? A lot of it could be from India as well.
Kunhamed Bicha
So yeah, now with the PLI scheme for the PCVs coming out, our endeavor is to do more-and-more India. Only if we can’t do India, we go outside.
Chirag
Yeah. Perfect. Second question of mine is related to the collaboration that you had with the new company. I just wanted to know what different things as R&D they are bringing on-table and what are the future thoughts related to for the same companies that are you willing to increase the stake in the same company or not?
Kunhamed Bicha
Okay. So our endeavor is always to do manufacturing, okay. So what Zepco Technologies brings to us is a design arm for our clean-energy customers who are looking for doing more-and-more designs out of India. And what that helps us is a funnel to get our production. These are some of the large customers we already deal with and some of the future products will be designed by us in association with Zepco.
And number two, they are into one of the — I don’t know the exact statistics, one of the key companies making drone motors and controllers, okay. And in the same case, we will be doing the manufacturing into the future. So that is one of the reasons why we have this close association with them. They also have a EV solution for three-wheelers, which we completely made and design-in India, which we want to see if we can partner with some of the OEMs.
Did I answer your question.
Chirag
Just yes, that was clear. I just have one last question and I joined back the queue. Hi, as you have said that you are being cautiously optimistic related to revenue guidance. Is it — is it possible for you to make us understand? Is there any kind of seasonality in sales that takes place? Because from the perspective that last year Q1 was at around INR200 crores run-rate. At this moment, we are almost INR340 crores run-rate on a quarterly basis and the ARR is almost about INR110 crores per month.
So just wanted to have a set, is there any kind of seasonality? As achieving the 12 months or 14-month average order book guidance, we could have easily thought about doing a top-line of INR1,400 crores INR1,500 crores from just a number perspective, but it would be great if you could throw some light on that.
Kunhamed Bicha
So let me put it this way, the order book is strong. We anticipate growth which is there. You’ve seen in the last 3/4. In Q2, we grew 38% last year. Q3, we grew 31% and Q4, we grew 58%. So we’re just being cautiously optimistic. I think — and I believe that the growth is there. And like I said, every quarter, we’ll try and update you as the big programs kick-in. So some of these programs are — there could be delays. We don’t want to go out and say that it’s going to kick-in June, let’s say, it could be August, because we burnt our fingers couple of years back doing that. But it’s all there. So we’ll update as we go.
Suresh Veerappan
But to add a point, there is no seasonality per se, but H2 tends to be little stronger than H1 for us.
Chirag
Thank you so much. I’ll rejoin the queue.
Kunhamed Bicha
Thank you, Chirag.
Operator
A reminder to all participants, please restrict yourselves to two questions. If you have any further questions, kindly rejoin the queue. The next question comes from the line of Rahul Gajaria from Securities. Please go-ahead.
Rahul Gajare
Hi, good evening, gentlemen, and thanks for the opportunity. Firstly, congratulations on your Q4 performance. Now the first question that I have is on your Chennai facility, which have become operational. So can you talk about the potential peak revenue that can come out of Chennai factories? And based on your thoughts on the capacity, et-cetera, when do you think you will have to start adding or think of adding more manufacturing? That’s the first question.
Kunhamed Bicha
So it’s — let’s put it this way, being cautiously optimistic on one-side, but this fact is already spoken also. Some of our products are larger in size. So we believe that the capacity is getting utilized, but over the period of this year, you will see, you know, we always look for certain tons of I would say 8% to 10% and we continue to be the asset-light model. So you can do the math on that. I don’t want to say — because it’s not a specific product you’re making there, it’s a multiple set of products. So saying that we are also setting up two more factories, okay, in the next six to 12 months.
Rahul Gajare
Okay. And where are you planning to set-up these factories?
Kunhamed Bicha
So for export, we are looking at setting up in the same-location, which is in Chennai. And the Phase-2 is around 30 kilometers from where we are for the domestic tariff unit. That’s in Tamilado also.
Rahul Gajare
Okay. Fair enough. So you’re well sorted as far as manufacturing is concerned. My second question is you — yeah, you think something.
Kunhamed Bicha
Go-ahead.
Rahul Gajare
Yeah. Sir, my second question is on the segmental business. Now you’ve given a decent color on sector-wise what we expect from industrial, clean, energy, railway, et-cetera. I wanted to know your take on communication, especially given that we’ve seen a drop. How do you see this particular segment do in the next year based on the backlog or discussion visibility that you are having with customers in communication. Thank you.
Kunhamed Bicha
See, communication has also grown, but has not grown at a rate like the others and communication is primarily India and we have grown at what is the number, 53%, 53% in Q4. So that speaks for itself, right? And it is going to grow further. And we are in our of communication for the India market.
Rahul Gajare
Yeah. I was actually looking at from a full-year basis. We’ve done closer to INR90-odd crore compared to INR112. So it’s a small number, but I just wanted to know.
Kunhamed Bicha
Yeah, a lot of that will come in the Q3 and Q4, I would say Q4 primarily. So that will continue.
Rahul Gajare
Okay. Sure. Thank you very much.
Kunhamed Bicha
And again, this is in the 5G area, so you know what I mean.
Rahul Gajare
Got it. Thank you very much and all the very best.
Kunhamed Bicha
Thank you.
Rahul Gajare
Thank you. Thank you, sir.
Operator
The next question comes from the line of Chetan Kumar from Avendus Spark. Please go ahead.
Uttham Kumar
Good evening, sir. This is Uttham Kumar from Avendus Spark. Most of my questions have been answered, except for on the capex spend, I think a couple of — the first thing is, I mean two factors is something which you had highlighted that it’s going to be up and running over the next six to 12 months. Just wanted to know what kind of capex amount are we talking about? Because one-side we’re talking about doubling of revenue over the next three years.
So what is the overall capex which are planning to set-aside for this particular target.
Kunhamed Bicha
So we usually say our capex, everything including buildings and around INR40 crores to INR50 crores. It could just go over a little bit to be — if like the previous example, I said factories, what you planned for 12 to 18 months was kind of sold-off in four months. So it may be just preponed a bit, but we still maintain that INR45 crores to INR50 crores a year.
Uttham Kumar
So these two new facilities which you got stated, is it on and above the brownfield capacity expansion which is happening right now, which is as mentioned in the.
Kunhamed Bicha
No, no, it is the Phase-1 is over. Phase-2 is what we are building in the bottom phase.
Uttham Kumar
Got it, sir. That’s all from my side. Thank you.
Deepak Agarwal
Thank you, sir.
Operator
The next question comes from the line of Vipraw Srivastava from PhillipCapital. Please go-ahead. Viprah,
Kunhamed Bicha
We cannot hear you.
Vipraw Srivastava
One second. Hello, I’m audible now.
Kunhamed Bicha
Yes, you are.
Vipraw Srivastava
Right. Sir, quickly on the transport mobility business, which has shown a very rapid growth. So obviously, one of my question is that, does the margin profit of your Indian business is similar to US business on gross margin side?
Kunhamed Bicha
Because we couldn’t hear the last part of your question. I know it’s on mobility. Could you repeat the last part of it?
Vipraw Srivastava
Sir, what I’m saying is, sir, is the margin profile of your Indian business similar to US business and gross margins?
Kunhamed Bicha
There’ll be some difference for sure. But since we are in mission-critical product lines in rail or in air, so they more than — more than make-up for it. So we’re not doing consumer or communication that way, right? So that makes up for.
Vipraw Srivastava
Right, sir. And sir, one more question. So quickly on the clean-energy business, obviously US, that segment, all the stocks in that space are not doing well, there has been IRA funds blockaged by Trump. So you see — you continue to remain optimistic on the Clean energy segment?
Kunhamed Bicha
Yes. So because we are in the right part of the clean-energy business, we are not in rooftop solar, a small part of it is there, but mostly in storage, which is growing at 70% in the US,
Vipraw Srivastava
Okay. So storage and product mix, right, for clean-energy?
Kunhamed Bicha
Excuse me.
Vipraw Srivastava
Our storage and inverters, am I right? That’s the product mix for a clean-energy.
Kunhamed Bicha
Storage systems and we’ve also got new customers in other — see, because of the what do you call the data — data requirements of AI servers, a lot of clean-energy going-in the US with the data centers coming up. So that’s why you’re seeing a lot of uptick in that, especially in storage.
Vipraw Srivastava
Right, sir. And sir, lastly, the storage mix is for your — this storage which you cater to is for commercial partners, it’s not for rooftop owners or homeowners, it’s for industrial and commercial partners.
Kunhamed Bicha
It’s industrial and commercial? I mean not commercial. There is home also, but that is where they can actually make use of the solar, because by storing it, because there is a different price tariff for different times of the day-in the US.
Vipraw Srivastava
Sure, sure. That’s all from my end. Thank you.
Deepak Agarwal
Thank you, Viprav.
Operator
The next question comes from the line of Praveen Sahai from PL Capital. Please go-ahead.
Praveen Sahai
Thank you for a follow-up. So first question is related to your receivable, which has increased to 84 days. So for a year. So where you are going to see this number to be is — because your mix change has — is like that, which has reached — which has actually lead to the increase in the receivable days increase and will be here or where you will see?
Suresh Veerappan
No, our receivable days have a slightly increased from 79% to 84%. But if you look at it, there is a decline in receivable days when you compare December ’24. I think between 75 to this current 85 days is a reasonable range to look at. It depends upon the quarter it changes, but yeah.
Overall, if you look at our working capital — net working capital days, there has been a March improvement from 161 days in March to 124 days in March 21.
Praveen Sahai
And we will try to maintain this.
Suresh Veerappan
We’ll try to improve it, but then lastly maintain.
Kunhamed Bicha
And internally to improve.
Vipraw Srivastava
Okay. And one clarification, sir, because one on the expansion part, the new export plant and the brownfield domestic, those are operational or commenced. Apart from that, two new you are expecting.
Kunhamed Bicha
No, no, let me clear it. There’s one export which is already functional. The brownfield, the second phase is getting started and we are looking for starting on a new export.
Vipraw Srivastava
Okay. Okay, okay. Fine. And any utilization number if you can say right now?
Kunhamed Bicha
Yeah. So, we’ve always said we — anytime we hit around the 70% number, we will expand, okay. We will build the buildings, which has got the longest lead-time.
Vipraw Srivastava
Thank you, sir, And all the best.
Kunhamed Bicha
Thank you,.
Operator
The next question comes from the line of Ashutosh Parashar from Design. Please go-ahead.
Vipin Goel
Yeah, hi, sir. Thank you for the opportunity. Vipin Goel from webside. So I had two questions on broadly on the current quarter Unti. So first was on the mobility execution, since it’s a strong execution that we’ve seen this quarter. I wanted to understand what is the nature of the project, which is leading to such a strong execution. So you can give some qualitative commentary on the — either on the nature of the product or the customer or the geography, which led to this strong number.
Kunhamed Bicha
A lot of this is India, okay. And lot of this is in rail and aero. Okay, multiple sites. We are in the cabin, we are in the engine, in the aero side, multiple different projects, multiple customers. On the rail side, again, we are in braking, we are interlocking, we are in the engine controls. So it’s well broad-based and diversified in the — in the segment itself.
Vipin Goel
Got it. Okay. And also a similar commentary if you can give us on the order intake this quarter, which — which is about INR500 crore order intake that we have got. So if you could just highlight — I understand that you have already made a commentary that it’s largely broad-based. But again, if you can just highlight, let’s say, the large top the largest two orders in this — in this intake either on basis of the kind of product or are these on for new customers or existing customers.
Kunhamed Bicha
The largest intake I would say is in mobility.
Vipin Goel
Okay. And this is not the two-wheeler EV?
Kunhamed Bicha
No, no, no mobility is more rare and rare.
Vipin Goel
Okay. Okay. Sure, that’s it from my side. Thank you.
Kunhamed Bicha
Thank you,.
Operator
The next question comes from the line of Jalaj from Swan Investments. Please go-ahead.
Jalaj
Yeah. Thanks for the opportunity again. So this was with regards to the India business specifically. The — if I understand the industry sales is growing at somewhere around 30%, 35% because of the migration from exports to the domestically. But still our growth has been regarding that sense. Any specific reason for that or are we changing any outlook or the way we are working for at least India business?
Kunhamed Bicha
So we are — India growth quarter 30% as will 70%, yeah.
Jalaj
I’m talking more so from a Y-o-Y complete year I was looking at those numbers. And most of from maybe a two-year perspective, if you could share your thoughts around that.
Kunhamed Bicha
Yeah, so see, what we’re trying to equate is the both export and India. And India is growing faster as far as we are concerned because in the last three years, we have worked in India to get these projects to come in. And we also need the export. We just don’t — we want to have it both geographies doing well. And apart from that, 24% of our business is Japanese with Japanese customers. And today what we are looking into the future growth is Europe and GCC.
Vipin Goel
Does that answer your question, Jalaj?
Kunhamed Bicha
Jalaj, is hello.
Operator
Yes, did I answer your question,?
Jalaj
Yeah, yeah. And sir, the second question was on the margins. So I understand that we usually talk about the gross margins, but on the EBITDA level or it’s flowing through, is there a possibility of eventually the operating leverage playing out or — because traditionally in these businesses of EMS beyond the point, we have not seen it playing out the operating leverage. So how should we understand that? Have we reached out to a peak wherein the shifting of — from the US facility to India has reached to a level of — at the level of maturity right now. Incrementally, no more shift will happen and the margins are stable going to be stable here or there is much more — there is enough lever for there to grow that.
Kunhamed Bicha
So, we always look at profitable growth and not growth at any cost, okay. So certain businesses we actually don’t do because of — we can’t achieve the profitable growth. That’s why you will see us even worldwide, we’ll probably have one of the best gross margins there. And then as the top-line increases, you will start to see some flow-through below that. But today, we are investing or getting ready for the future where some projects, though it’s kicking-in three or four months later, we need to start training our people to get ready to do that. So there’s a lag before the revenue comes through.
Jalaj
And on the part of shifting from the US to the India facility, the margin being margin keep us from that side, have we reached to an optimum level or there is more scope to it.
Kunhamed Bicha
See, ideally when we sell or do our sales, the ideal situation for us is a US customer. I’m talking about export since you’re talking on that, US customer coming directly to India. But sometimes they want to stop over in our US facility. The ultimate goal is to get everybody to India and the US facility is a beachhead. But today, being in this unique situation, we can — in case the customer is adamant to do it in the US, we can do that. But always our goal is to move the products to India.
And last year, it was a short-term thing where we moved whatever existing product we did. Actually, we are lucky that we did that. So in case new projects come in the US, we can do that in the US.
Operator
Thank you, sir. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to the management for the closing comments.
Kunhamed Bicha
Thank you, Deepak and Nikhil. FY ’25 has been a pivotal year for Avalon, marked by strong revenue growth, margin delivery and operational improvements and strategic progress across markets and customer segments, as we step into FY ’26, we remain focused on executing with discipline, scaling responsibly and investing ahead of growth to capture long-term opportunities. With a robust order book, diversified customer-base, expanding infrastructure and a clear roadmap supported by strategic partnerships, we are well-positioned to build-on the momentum and continue delivering sustainable profitable growth. We thank our investors for their continued support and look-forward to updating you on our progress in the quarters ahead. Thank you. Thank you very much.
Operator
Thank you, sir. Ladies and gentlemen, on behalf of Axis Capital Limited, that concludes this conference. You may now disconnect your lines.