900% Returns In 3 Years: Multibagger Smallcap Defence Stock Hits Upper Circuit On Board Meet Announcement

Shares of Apollo Micro Systems have been on a rally, hitting the upper circuit for the third consecutive day. This Hyderabad-based smallcap stock has drawn investor interest, leading to a strong buying spree. Let's delve into the details of what's propelling Apollo Micro Systems' stock and what lies ahead for this promising defence and aerospace company.

On Thursday, Apollo Micro Systems' shares opened at Rs 114, slightly below the previous close of Rs 115.25. However, strong buying activity pushed the stock to hit the upper circuit limit of 5%, closing at Rs 121. This marked the third day in a row that the stock hit its upper limit. Trading was halted shortly after this surge, and a substantial 1.36 crore shares changed hands during the session.

The recent rally has provided a solid return of 16% to investors over just three days. The stock is currently trading higher than its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages, indicating strong bullish momentum. The delivery volume also surged, with 13.1 lakh shares being delivered on July 16, up nearly 25% from the 5-day average delivery volume.

Apollo Micro Systems has announced a board meeting scheduled for July 23. The agenda includes considering the issuance of equity shares and/or convertible securities, including warrants, on a preferential basis. The board will also determine the issue price. This move is subject to regulatory and statutory approvals but indicates the company's intention to raise capital for future growth and expansion.

The performance of Apollo Micro Systems over the past year has been nothing short of stellar. According to BSE analytics, the stock has delivered a return of 97% in the last 12 months. The two-year return stands at an extraordinary 803%, while the three-year return is an even more impressive 895%.

Apollo Micro Systems is a player in the aerospace and defence sector. However, its operations are not limited to defence alone. The company also serves sectors such as infrastructure, transportation, and railways. Currently, the company operates from a 55,000 sq. ft. manufacturing facility in Hyderabad.

Recognizing the need for expansion, Apollo Micro Systems is planning to add two additional facilities. One of these will be a 40,000 sq. ft. facility, and the other will be a massive 350,000 sq. ft. plant. The total capital expenditure for these projects is estimated at Rs 1,500 million. These new facilities are under development and are expected to become operational within the next 12 months.

Apollo Micro Systems' focus on the defence sector is significant, especially given the current geopolitical climate. Defence stocks are often considered safe bets during times of uncertainty due to government spending on defence projects. Apollo Micro Systems' experience and capabilities in the aerospace and defence sector position it well to capitalize on this trend.

Moreover, the company's diversification into other sectors such as infrastructure and transportation reduces its reliance on any single sector, thereby mitigating risk and ensuring steady revenue streams. This diversification is likely a contributing factor to the stock's strong performance and positive investor sentiment.

The rising investor participation in Apollo Micro Systems is evident from the increased trading volumes and the consistent upper circuit hits. Investors are bullish on the stock, driven by its solid past performance, promising future prospects, and strategic expansions. The upcoming board meeting and potential issuance of equity shares could further bolster the company's financial position, enabling it to undertake more ambitious projects.

Apollo Micro Systems has been on an upward trajectory, reflecting strong investor confidence and strategic growth plans. The stock's recent rally, upcoming board meeting, and ambitious expansion plans underscore its potential for continued success.