New Delhi. Shares of integrated electronic manufacturing services (EMS) company Avalon Technologies Ltd jumped 20 per cent on Friday. A similar surge was seen in the previous session, due to which the stock exchanges have sought clarification from the company on this big rise in volume. On Friday, the stock rose 20 per cent to reach a 52-week high of ₹ 849.10. It had also gained 20 per cent in the previous session. The stock is now up 43.05 per cent in a week. After the exchange sought clarification, the stock came down and finally closed at ₹ 793.30 with a gain of 12.11%.

When stock exchanges notice a huge surge in trading volumes for a company, they initiate a process of seeking clarifications. This process ensures transparency and protects investors by providing timely information about unusual trading activities, thereby maintaining market integrity and investor confidence.

The entire clarification process is as follows:
Notification: The exchange formally notifies the company about the unusual trading activity.
Request for clarification: The company is asked to explain the reasons behind the volume increase, which may include any pending announcements or significant events.
Company response: The company conducts an internal review and must respond within a stipulated time frame, disclosing any relevant information.
Exchange evaluation: The exchange looks at the company's response. If the response is satisfactory, trading continues; otherwise further investigation may take place.
Regulatory oversight: If the spike indicates potential market manipulation or insider trading, regulatory bodies such as the SEC may investigate.
Public notice: The exchange or regulator may issue a statement about their findings or actions taken.

About Avalon Technologies Stock
Earlier this week, Avalon Technologies reported a 140 percent year-on-year rise in net profit from ₹ 7.30 crore to ₹ 17.5 crore. The company's sales also grew 36.80 percent from ₹ 201 crore to ₹ 275 crore during the same period.

The company's EBITDA stood at ₹30.10 crores in this quarter, which is 139.60 percent higher than ₹12.60 crores last year. The EBITDA margin stood at 11 percent, which shows an increase of 470 basis points from 6.3 percent year-on-year.

Avalon Technologies reported that its order book grew 19.4 percent YoY in the September quarter. Net working capital days improved by 27 days, from 161 days in March 2024 to 134 days in September 2024. The company also reported that the new plant for exports has become operational and the second phase of the brownfield expansion for domestic demand is expected to start early next year.

Did the new CFO do wonders?
Apart from this, the company informed that Suresh Veerappan, who has been leading business finance and investor relations for the last 2.5 years, has been appointed as the new CFO. Established in 1999, Avalos Technologies has complete capabilities to provide box-build solutions in India and focuses on high-value precision-engineered products. It has a total of a dozen production units in the US and India, which provide various solutions and services.

The company's scope of work involves complex designing, engineering, component procurement and production, which results in long lead times and high entry barriers.