A company of a ‘fundamentally strong’ nature portrays certain characteristics, viz, strong and consistent financial performance, lower leverage ratios, and many more.
Listed below is one such fundamentally strong stock in which Foreign Institutional Investors (FIIs) increased their stake by 5.74 percent in Q3FY23-24:
Apollo Micro Systems Limited
With a market capitalization of Rs 3,365.43 crores, the stocks of Apollo Micro Systems Limited (AMS) are currently trading at Rs 120.45, gaining approximately 1.40 percent as compared to the previous closing levels of Rs 118.75 apiece.
The latest shareholding pattern data for the quarter ended December 2023 exhibits an increase of 5.74 percent in the FII holding, i.e., an upward shift from a 5.27 percent stake during the September 2023 quarter to an 11.01 percent stake during the December 2023 quarter.
Having a glance at the financials of the company, the prime indicators of business, i.e., operating revenues as well as net profits, were on the rise during the recent financial quarters.
The former rose from Rs 57.69 crores during Q1FY23-24 to Rs 87.16 crores during Q2FY23-24, and the latter, keeping the timeframe the same, rose drastically from Rs 1.65 crores to Rs 6.56 crores.
In addition, the basic profitability ratios such as the return on equity (RoE) as well as the return on capital employed (RoCE) increased consistently with the former recently moving from 4.68 percent during FY21-22 to 5.71 percent during FY22-23 and the latter rising from 8.71 percent to 10.68 percent.
The net profit margin (NPM) of the company, too, rose from 6.01 percent during FY21-22 to 6.3 percent during FY22-23. During the same period, the company’s debt-to-equity ratio, though an increase, stayed within the desired limits shifting from 0.36 times to 0.42 times.
Keeping a purview of six months, the company’s stock has delivered multibagger returns of 161 percent to its stakeholders, i.e., if someone had invested Rs 1 lakh into the company’s stock six months ago, it would have converted to Rs 2.61 lakhs.
As per the recent presentations, the company announced about establishment of a 2.50 lakh sq ft “Defense Electronics and Electromechanical” manufacturing facility in Hyderabad with a total investment of ₹150 crores envisaged for the said plant.
Moreover, the company established a subsidiary company, viz, “Apollo Defence Industries Private Limited”, signaling potential diversification/expansion into the defense industry.
Founded in 1985, Apollo Micro Systems Limited is engaged in the business of offering design, development, and assembly of custom-built electronics and electro-mechanical solutions. The company serves various sectors, i.e., defence, naval, aviation, aerospace, space & homeland security, avionics, etc.
Written by Amit Madnani
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