I wonder why he exited entirely. Maybe he was getting better deals in Turkey as someone said earlier in this thread.

I do not think there is anything adverse going on with Avantel. I also don’t have any suspicion on the management. Also, this is a company with clean accounting practices, is my belief.

I welcome ESOPs. One of the key concerns I have with this company is employee retention. I was looking forward to knowing what they do to identify and retain people, which I believe is key to the company’s future. I mentioned earlier in this forum that the lower salaries relative to software industry (yes, not exactly same industry, but this is how employees tend to compare their potential salaries), and also the location (Vizag) could be holding the company back in the regards. Since then, the company made significant progress towards these concerns. Now the company has R&D facilities at Hyderabad. This alongside ESOPs are steps in the right direction, in my opinion.

I do have other concerns. Typically, a company which wants to retain employees should also pay attention to strengthening feedback systems. But I suspect defence companies tend to be hierarchy heavy and the top management tend to miss critical feedback from much lower levels. I don’t know if the quality of mid/lower level management being supportive and motivational to the subordinates at Avantel. Improving on these aspects and employee friendly policies will be required for this company’s future.

I have another significant concern. It is well known by now that the defense companies, in India, have significant potential for growth and Avantel is definitely one of them. But do they have processes, capabilities, and capacity building to keep up with this growth? I remain skeptical. I’m not sure if the company is agile enough to take on the flood of orders. The systems and processes that sustained the company this far, may not be suitable in the new reality and expectations.

If my fears about defence companies are true, orders will come, but deliveries will suffer. I’m not sure if these companies even can recognize the need for an overhaul of their processes to get there.

I’m sorry if these thoughts are vague or shooting in the dark. I’m afraid that the current valuations simply assume that delivery is a given. I think the potential order growth is the correct assumption. I’m just not sure if ability to deliver can also be taken for granted about these companies unless they adapt and evolve themselves.

Disclaimer: Invested and potentially biased views.

A thing in the results i noticed was a Rs 3.64 Crs charge on account of ESOP. This was not there in any of the results in the past ( as per qtrly filings). So PAT was down, if we remove this then the PAT woull have grown 25 – 30%.

This is my limited understanding from the results.

thanks sir @visuarchie

I note your views but have a different take on this. The lack of engineering degree does not make the person a bad owner, there are multiple promoters in the market who have made it big with a commerce degree. Vedanta is the biggest example.

The fact that he is the owner and face of the company, it makes him responsible for the statements done by and on behalf of the company. Just because he is purpotedly seen as a part time “employee” it does not absolve him of the performance. A qtr of good performance and he will be hailed. In concalls he is the one doing all the talking.

The results were below average. He has gone on record to keep saying multiple times that becasue of some accounting standard the profit is lower. How is this restricted to only Sealmatic, the AS is same for all.

Sending a business update when they win an order makes sense but sending business updates on the TAM is ridiculous. The best thing is that the market got the stock to move 10%. In the final say the collective actions of the market decide the price but the actions of Mr. Balwa, in my view, clearly show that he is trying to manage the price.