SYNOPSIS –
Apollo Micro Systems, a defence and aerospace solutions provider, delivered 153 percent returns in 2025. With Rs. 735 crore order book and 45-50 percent revenue CAGR guidance, expansion and integration initiatives strengthen growth visibility.
An electronic, electromechanical and engineering design, manufacturing and supplies company for India’s defence and aerospace sectors – making it one to watch closely.
We’re talking about Apollo Micro Systems Limited (AMS), mainly into the supply of electronics and electro-mechanical systems and components, including design, research & development of systems which are used in missile programmes (weapon systems electronics), underwater missile programmes (weapon systems electronics), avionics systems, ship-borne systems, submarine systems, etc.
The company plays a key role in advancing national defence capabilities across strategic areas, including missile systems, naval platforms, avionics, satellite and space systems and homeland security.
In this article, we’ll take a closer look at the company’s financial performance, order book position, expansion initiatives, management guidance, and other key aspects.
With a market cap of Rs. 10,174.4 crores, shares of AMS closed at Rs. 305.05 on Friday. The stock has delivered multibagger returns of nearly 194 percent over a one-year period, while delivering over 70 percent of positive returns in the last month.
Management Comments & Guidance
During the quarter, the company reported a major strategic development with the acquisition of IDL Explosives Limited, marking an important step toward becoming a fully integrated Tier-1 defence OEM. The acquisition is expected to strengthen manufacturing capabilities and expand the company’s solutions portfolio across key areas of India’s defence supply chain.
Management has guided for revenue growth in the range of 45–50 percent CAGR over the next two years, driven entirely by the core business and excluding any contribution from the recent acquisition. This growth outlook is supported by a healthy order book and several products progressing into the production stage.
Operating margins are expected to improve in the first half of FY26, aided by favourable operating leverage and a stronger product mix. However, management also noted that ongoing and planned capital expenditure may temper margin expansion in the latter half of FY26 and into FY27.
Order Book and Expansion
As of June 2025, the company reported an order book of around Rs. 735 crores. Meanwhile, as part of its greenfield and brownfield expansion, Apollo Microsystems is scaling operations to nearly three times its current capacity. Its manufacturing units in Hyderabad are equipped with ESD-compliant infrastructure, controlled environments, and a complete ESS testing facility, with inspections carried out in line with DGQA standards.
In line with its backwards integration strategy, the company has begun construction of the Integrated Plant for Ingenious Defence Systems (IPiDS). This facility is expected to enhance in-house capabilities, expand production capacity, and support the company’s role as a Tier-1 OEM manufacturer.
The company has also invested in a new weapon integration facility at Unit III. Unit I will focus on R&D, while Units II and III will handle production. Unit III is being developed as the consolidated manufacturing hub, aimed at streamlining and integrating operations. For Unit III, civil work for Phase 1 has been completed, while Phase 2 is currently in progress.
Financial Performance
In Q1 FY26, Apollo Micro Systems reported a consolidated revenue from operations of Rs. 134 crores, a decline of around 17 percent QoQ but a growth of nearly 47 percent YoY. This growth has been driven primarily by the robust order book execution and successful transition of multiple high-value systems into the production phase.
Similarly, the company’s net profit for the quarter more than doubled to Rs. 18 crores, representing an impressive rise of nearly 29 percent QoQ and 125 percent YoY.
EBITDA (excluding other income) rose by 83 percent YoY to Rs. 40.9 crore, compared with Rs. 22.4 crore in Q1 FY25. More notably, our EBITDA margin expanded by 600 basis points, reaching 31 percent in Q1 FY26, up from 25 percent in Q1 FY25, reflecting operating leverage and improved cost efficiency.
Written by Shivani Singh
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