SYNOPSIS: A defence electronics company involved in indigenous missile and weapon systems is drawing attention after strong Q3 growth, acquisitions, greenfield expansion plans and management projecting 45-50 percent revenue CAGR over the next three years.
An electronic, electromechanical and engineering design, manufacturing and supplies company is worth keeping in your radar, supported by its strong order book, recent acquisitions, and management’s long-term growth outlook.
We are talking about Apollo Micro Systems Limited, which is mainly into the supply of electronics and electro-mechanical systems and components, including design, research & development of systems which are used in missile programmes, underwater missile programmes, avionics systems, ship-borne systems, submarine systems, etc.
With a market cap of Rs. 6,916 crores, shares of Apollo Micro Systems Limited fell around 3 percent to close in the red at Rs. 195.15 on Monday, as against its previous closing of Rs. 200.8 on BSE. The stock has delivered positive returns of over 71 percent in one year, but has fallen by more than 15 percent in one month.
Company overview & Product Portfolio
Established in 1985 and headquartered in Hyderabad, Apollo Micro Systems Limited (AMS) is a leading technology provider of high-performance, mission-critical solutions for the defence sector. Its expertise spans weapon electronic systems across ground defence, missile defence and naval defence. AMS is the only company with the highest participation in the indigenous missile programs of DRDO.
The company’s existing portfolio comprises a range of weapon systems that have either completed qualification or are in advanced stages of the qualification process. These include underwater mines, underwater moored mines, anti-submarine warfare rockets, medium-range aerial rockets, limpet mines, and aerial bombs. All these systems have been indigenously developed and produced in-house.
During Q3 FY26, the company’s subsidiary, Apollo Defence Industries Pvt Ltd (ADIPL), has completed a 100 percent equity stake in IDL Explosives Ltd for a total consideration of Rs. 107 crore, in an all-cash transaction. The company is engaged in the manufacture of a full range of packaged and bulk explosives specifically engineered for mining and infrastructure projects. Moreover, it also offers an extensive range of cartridge explosives.
This acquisition marks a significant milestone in its journey toward becoming a fully integrated Tier-1 defence OEM. The acquisition is expected to strengthen its manufacturing capabilities while also expanding its solutions portfolio across key segments of India’s defence supply chain.
Greenfield Expansion
The company is undertaking a greenfield expansion aimed at scaling its operations to nearly 12 times the current capacity. As part of this expansion, it plans to invest around Rs. 300 crore, which also includes the acquisition of a land bank of about 2,47,441 square feet. The land is strategically located adjacent to Unit 3 at the Industrial Park, TSIIC Hardware Park, Phase 2, Hyderabad, providing logistical and operational advantages for the upcoming facility.
The proposed facility is expected to support manufacturing, assembly, integration, and testing activities for a wide range of advanced weapon systems. These include Grad rockets, anti-submarine warfare rockets, anti-tank mines, artillery munitions, and other similar defence systems, strengthening the company’s capabilities in the defence manufacturing segment.
Management Commentary & Guidance
The company stated that it expects revenue to grow at a CAGR of around 45-50 percent over the next three years, driven entirely by its core business operations, excluding any contribution from the recently announced acquisition. According to the management, this growth outlook is supported by a strong order book and several products that are gradually entering the production phase.
In addition, the company informed that another acquisition is currently underway through ADIPL, which is expected to be completed before the end of the current financial year. Management believes that this acquisition will further strengthen the company’s organic growth prospects and overall operational capabilities.
The company also highlighted that the current geopolitical environment and the Government of India’s continued push for the ‘Atmanirbhar Bharat’ initiative have reinforced the importance of developing indigenous defence technologies. Going forward, the company stated that its core focus remains on innovation, precision execution, and strengthening strategic partnerships. Through these efforts, it aims to enhance its capabilities and contribute to building a more self-reliant, technologically advanced, and secure defence infrastructure in India.
Financials & Order Book
In Q3 FY26, Apollo Micro Systems reported a consolidated revenue from operations of Rs. 252 crores, a significant growth of around 12 percent QoQ and 70 percent YoY. This growth has been driven primarily by the robust execution of the order book and the seamless transition of several high-value systems into production.
Similarly, the company’s net profit for the quarter stood at Rs. 23 crores, representing an increase of nearly 23 percent QoQ and 28 percent YoY. Further, the PAT margin decreased to 9.1 percent in Q3 FY26, down from 12.3 percent in Q3 FY25 and 13.3 percent in Q2 FY26.
The company reported a consolidated EBITDA of Rs. 50.4 crore in Q3 FY26, a 15 percent QoQ decrease from Rs. 59.2 crore in Q2 FY26, but a 33 percent YoY rise from Rs. 38 crore in Q3 FY25. Meanwhile, the EBITDA margin contracted to 20 percent in Q3 FY26, compared to 26 percent in Q3 FY25 and 26.3 percent in Q2 FY26. As of 30th December, the consolidated order book of AMS stood at Rs. 1,305 crores.
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