Nomura raises target price of stock that’s up over 150% in 2026; stock soars another 6%

Shares of Avalon Technologies rallied 6% to their day’s high of Rs 2,326 on the BSE on Monday after Nomura raised its target price on the stock to Rs 2,767 from Rs 2,211 and maintained its Buy rating. The revised target implies 23% upside from current levels.

Nomura said Avalon entered a joint venture with Zollner Elektronic AG, an unlisted leading European electronics manufacturing services (EMS) company, for PCBA, box-build and system integration manufacturing in India. The JV intends to serve customers across geographies and sectors including healthcare and life sciences, test and measurement, rail and other industrial verticals.

Zollner will initially hold a 51% stake in the JV. However, three years after commercial production starts, Avalon will have an option to acquire an additional 2% stake, subject to certain conditions, which would make it the majority shareholder with a 51% stake in the JV.


For Avalon, Nomura said the partnership adds global customers, supports expansion into Europe and helps the company enter two new verticals—healthcare and life sciences, and test and measurement—which are characterised by high-complexity manufacturing and long lifecycle products.

Nomura said Zollner expands Avalon’s capabilities across multiple fronts, which it sees as a key long-term positive. The brokerage noted that Zollner is a privately held company headquartered in Germany with a presence across 17 international locations.

While details remain limited, Nomura’s analysis across various media sources indicates that Zollner is involved in complex EMS builds for critical applications across semiconductors, railways, aerospace and automotive. It supplies leading customers such as BMW, Bosch, Teradyne, Siemens and National Instruments, with revenues of around $3.7 billion in 2025.

For Avalon, Nomura said the partnership further expands its capabilities in complex EMS, including medical and test instruments, and takes it deeper into the semiconductor ecosystem. The JV should also aid diversification into the European Union, which the brokerage expects to further improve Avalon’s long-term growth outlook and be margin accretive.

Nomura estimates total investment of around $30-50 million by the JV. Assuming the midpoint of this range at around $40 million, an asset turn of around 10x and EBITDA margins of 15-17%, the brokerage estimates that the JV would boost its FY29F EPS by around 21%.

Nomura maintained its target P/E multiple of 45x and rolled forward its valuation to December 2027F from September 2027F earlier, resulting in the higher target price of Rs 2,767, implying 23% upside from current levels. The brokerage said the stock is currently trading at 35x FY29F EPS, which it says is attractive given the positive growth prospects.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)