Shares of this multibagger small-cap stock associated with the ‘Defence’ sector jumped around 9 percent on Monday after entering into several agreements with DRDO. 

With a market capitalization of Rs 1,354.02 crores, the stocks of Apollo Micro Systems Limited started their trading session on Monday at Rs 56.68 and currently trade at Rs 58.37, gaining around 9 percent as compared to the previous close of Rs 53.88 apiece. 

Such bullish sentiments in the company’s stock prices were observed after a regulatory filing published with the Bombay Stock Exchange (BSE) announcing that the company has entered into several Transfer of Technology (ToT) agreements with the ‘Defence Research and Development Organisation’ (DRDO). 

The ToT agreement pertains to the Guidance and Navigation Technology, Weaponisation of Hand-Held Thermal Imager with LRF, Rotary Electro-Mechanical Actuator, and Unified Avionics Computer. 

The company, during recent financial years, reported an increase in the basic business parameters such as operating revenues as well as after-tax profits. 

The operating revenues went up from Rs 243 crores during FY21-22 to Rs 297 crores during FY22-23, and, the after-tax profits, in congruence with the pattern, rose from Rs 14 crores to Rs 18 crores during the same time horizon. 

Moreover, the profitability metrics of the company have shown decent improvements with the return on equity (RoE) marginally increasing from 4.57 percent during FY21-22 to 4.88 percent during FY22-23, and, the return on capital employed (RoCE) taking a shift from 8.56 percent to 13.24 percent keeping the timeframe the same. 

Keeping a purview of just six months, the company’s stock has proven to deliver multibagger returns of 122 percent, i.e., if someone has invested Rs 1 lakh into the company’s stock, it would have converted to Rs 2.22 lakhs within a period of six months. 

The latest shareholding pattern data, as per the June 2023 quarter, exhibits the Promoters holding a 59.1 percent stake, and the Foreign Institutional Investors (FIIs) holding a 0.17 percent stake in the company. 

Apollo Micro Systems Limited is engaged in the business of offering the design, development, and assembly of electro-mechanical solutions and custom-built electronics. The company caters to various sectors comprising Aerospace, Defence, Naval, and the Aviation sector amongst others. 

Written by Amit Madnani


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