Apollo Micro Systems Q2 Results: Defence Stock Posts 140% Growth In PAT; Sales Rose 84.39%

Apollo Micro Systems' stock began Monday at Rs 104.55 per share, up from the previous closing of Rs 102.13, following the company's announcement of exceptional results for the quarter that ended on September 30, 2024. Apollo Micro Systems' net profit increased by 139.33% to Rs 15.70 crore in the September 2024 quarter compared to Rs 6.56 crore in the September 2023 quarter. Compared to Q2FY24, when sales were Rs 87.16 crore, they increased 84.39% to Rs 160.71 crore in Q2FY25.

"We have secured significant Transfer of Technology (ToT) agreements with various DRDO laboratories, including Research Centre Imarat, Terminal Ballistic Research Laboratory, and Instrument Research and Development Establishment. These agreements encompass a range of advanced technologies essential for enhancing our defense capabilities. The technologies acquired include the Unified Interface Computer, Rotary Electro Mechanical Actuator, Guidance and Navigational Kit, Payload Electronics, and a SAM System for UAV-Launched Precision Missiles. Additionally, we have obtained critical components such as Warheads for the UAV Launched Precision Guided Missile V2 (ULPGM-V2) and the Weaponization of Hand Held Thermal Imager with Laser Range Finder (WHHTI). These advancements significantly bolster our capabilities in defense technology and reinforce our commitment to innovation in this critical sector," said Apollo Micro Systems in a statement.

With the exception of orders that were acquired and completed in the same quarter the year before, the company won new orders totalling Rs 1,309.60 million in the second quarter that have not yet been executed. Also during the quarter under review the members authorised the preferential issuing of 2,45,00,700 convertible equity warrants at a price of Rs 108.15 each during the Extraordinary General Meeting (EGM) on August 16, 2024.

Commenting on the performance, the management team of Apollo Micro Systems (AMS) stated "In our analysis of the quarterly and half-yearly performance for Q2 FY25 and H1FY25, we achieved a revenue growth of 84.38%, reaching Rs 1,607.07 Mn in Q2FY25 compared to Rs 871.63 Mn in Q2 FY24. This change can be largely attributed to execution of order book. Our EBITDA (excluding Other Income) mirrored this performance, increasing by 77.73% to Rs 328.95 Mn in Q2 FY25, compared to Rs 186.16 Mn in the same quarter last year. On a positive note, our PAT for Q2 FY25 increased to Rs 157.30 Mn, up from Rs 65.59 Mn in Q2 FY24, with marginsreflecting an increase of 139.92% to 9.8 % from 7.52% Y-o-Y."

"When assessing our half-year performance, we observed a revenue increase of 73.91%, totaling Rs 2,519.09 Mn in H1 FY25 compared to Rs 1,448.54 Mn in H1 FY24. Our EBITDA improved by 75.02%, amounting to Rs 552.66 Mn in H1 FY25 versus Rs 311.09 Mn in H1 FY24, with margins recorded at 21.94% in H1FY25 as against 21.48% in H1FY24. Notably, PAT showed a significant increase of 194.19%, reaching Rs 241.59 Mn in H1 FY25, up from Rs 82.12 Mn in H1 FY24, with margins improving to 9.59% compared to 5.67% in the previous year," they further added.

"As we conclude Q2 FY25, we are pleased to report significant progress in our operations and a robust order book that reinforces our position in the defence sector. The expansion of our order pipeline, driven by strong demand across multiple industries, underscores the confidence our clients place in Apollo Micro Systems. The diversity and quality of our orders not only ensure a stable revenue stream but also enhance profitability, strategically positioning us to capitalize on emerging opportunities and sustain our growth momentum," the management of AMS said.

"We are encouraged by the government's ambitious target of exporting over Rs 50,000 crore worth of defence equipment by FY 2028-2029. The substantial increase in defence production, which reached Rs 1,26,887 crore in FY 2023-24 an impressive 16.8 percent growth from the previous year highlights the positive momentum within the sector. The government's commitment to strengthening India's position as a global leader in defence manufacturing will further enhance our industry and support our strategic objectives," they commented.

"Looking ahead, we remain optimistic about our growth prospects. The rising demand for electronic solutions in the defence sector, coupled with our specialized technology offerings, positions us well to seize new opportunities. We are dedicated to fostering innovation, establishing strategic partnerships, and enhancing operational efficiency," the management team of AMS climbed.

Since its founding in 1985, Apollo Micro Systems Limited has grown to become one of India's top companies for engineering designs, manufacturing, supply, and electrical and electromechanical systems. Designing, creating, and marketing high-performance solutions that are essential for missions and time-sensitive activities is AMS's domain of expertise. It is one of the top producers and suppliers of a wide range of products for different industries in India. It provide COTS (Commercial Off-theShelf) solutions that are specifically designed to meet the demands of space and defence clients.