Avalon Tech jumps 10% as Nomura ups target on Zollner JV growth outlook

Avalon Technologies shares surged more than 10 percent on Monday, continuing their impressive run for the year, after global brokerage Nomura raised its target price and reiterated a ‘buy’ rating on the electronics manufacturing services company. The rally followed Nomura’s positive assessment of Avalon’s long-term growth prospects, especially in light of its recent joint venture with Germany-based Zollner Elektronik AG.

In afternoon trading, Avalon’s stock rose as much as 10.35 percent, reaching Rs 2,424, a sharp gain from the previous close. So far in 2026, the shares have soared around 172 percent, leaving the stock just shy of tripling since the start of the year, even as the Nifty 50 has declined approximately 9 percent over the same period. Avalon’s market capitalisation has now climbed above Rs 16,000 crore.

Nomura’s new price target for Avalon stands at Rs 2,767 per share, which suggests a further upside of about 26 percent from the previous session’s close. The brokerage pointed to enhanced long-term growth visibility stemming from Avalon’s collaboration with Zollner, highlighting the opportunity to expand into advanced electronics manufacturing services. This joint venture is expected to increase Avalon’s exposure to global clients and expand its presence in Europe.

The partnership marks Avalon's entry into new business verticals, including healthcare and life sciences, as well as test and measurement, which Nomura noted are sectors with high-complexity manufacturing requirements and typically feature long product lifecycles. Avalon and Zollner's venture will focus on manufacturing printed circuit board assemblies (PCBAs), box-build, and system integration products within India, serving customers across healthcare, rail, industrial, and other sectors.

Under the terms of the agreement, Zollner will initially own a 51 percent stake in the venture, with Avalon holding 49 percent. Three years after commercial production commences, Avalon has the option to acquire an additional 2 percent stake to become majority owner. At the initial stage, the joint venture will serve Indian operations of Zollner’s established global customers, providing localisation support. Avalon will contribute a range of its existing capabilities, including cable wiring and harnesses, magnetics, plastics, sheet metal, and machining.

Nomura estimated total investment in the joint venture at between $30 million and $50 million. At a midpoint of $40 million, the brokerage projected that, based on asset turns of 10 times and EBITDA margins of 15 to 17 percent, the JV could boost Avalon’s FY29 earnings per share by approximately 21 percent.

Highlighting Zollner’s scale and global footprint, Nomura noted that the private German firm operates internationally and is involved in complex electronics manufacturing for sectors such as semiconductors, railways, aerospace, and automotive. In 2025, Zollner recorded revenues of roughly $3.7 billion and works with prominent companies including BMW, Bosch, Teradyne, Siemens, and National Instruments.

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