Whalesbook
Apollo Micro Systems shares climbed 8% to a new intraday peak of ₹368.70 on Wednesday, with heavy trading volumes on the BSE. The aerospace and defense company's stock has surged 104% from its March low of ₹180.80. This latest advance, a 25% jump in just three trading sessions, saw it outperform the broader market as the BSE Sensex declined.
Strong Q4 Performance Fuels Rally
The company's impressive performance in the January-March quarter (Q4FY26) has powered the stock's rise. Revenue increased by 81% year-on-year to ₹293.3 crore, driven by strong execution in defense and aerospace programs. Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) grew 88% year-on-year to ₹67.6 crore, with margins improving to 23.1%. Profit after tax rose sharply by 163.5% year-on-year to ₹36.8 crore.
Strategic Investments and Future Outlook
Apollo Micro Systems has utilized ₹595 crore from its modified IPO allocation for working capital and research into future technologies. The remaining funds are dedicated to R&D and subsidiary investments. The company's consolidated order book now exceeds ₹1400 crore, which is about 1.5 times its FY26 revenue. Management called FY25-26 a breakthrough year, noting record revenue and profitability, the acquisition of IDL Explosives, a UAV manufacturing license, and its first export order.
Expansion into Key Defense Sectors
Looking forward, Apollo Micro Systems plans to enter key defense sectors by FY2026-27. These include armament electronics and fire control systems for main battle tanks and artillery, plus vehicle-mounted counter-drone systems. The company is also developing indigenous rocket systems and next-generation artillery platforms.
Analyst Views Remain Cautiously Optimistic
Analysts at Choice Institutional Equities reported that the strong Q4 results surpassed their expectations. They believe the company's focus on system-level integration will benefit medium-term margins. However, they noted that near-term margins might be stable due to the ongoing integration of IDL, product mix changes, and scaling operations. Exports are seen as a significant medium-term growth driver, though a slow ramp-up is expected due to long approval times and partnership needs. The brokerage had previously set a target price of ₹365, which the stock has now surpassed.