Zollner JV could unlock Avalon’s next growth phase

shares surged over 10% to ₹2,424 after Nomura retained its Buy rating and raised the target price to ₹2,767, implying around 26% upside. The brokerage sees the company’s joint venture with Germany-based Zollner Elektronik as a key catalyst for improving long-term growth visibility and expanding Avalon’s presence in advanced electronics manufacturing. The JV will manufacture PCB assemblies, box-build products and system integration solutions in India for healthcare, life sciences, test & measurement, rail and other industrial sectors. Zollner brings a strong global customer base and expertise in complex electronics manufacturing, potentially helping Avalon access new international customers and higher-value segments. Nomura estimates $30–50 million of investment in the JV and expects the venture could contribute around 21% to Avalon’s FY29 EPS at the midpoint investment assumption, based on estimated asset turns of 10x and EBITDA margins of 15–17%. Avalon’s existing capabilities in cable harnesses, magnetics, plastics, sheet metal and machining could also support the JV’s localisation and scale-up. However, valuation remains a key concern after the stock has already gained around 172% in 2026. Execution, JV ramp-up, customer wins and achieving targeted margins will be critical to justify the premium valuation. Overall, the Zollner partnership strengthens Avalon’s long-term growth opportunity and could improve its global EMS positioning. Successful execution and earnings contribution from the JV will be the key triggers for further rerating.