Why Apollo Micro Systems Share Price is Rising

Imagine a single, determined ant toppling a towering mound of sugar. In the stock market, a similar phenomenon can occur. Even a single piece of news can have a massive impact.

This is exactly what's happening with Apollo Micro Systems right now. The company designs and builds custom electronic and electro-mechanical solutions. Throughout 2024, its share price had been on a steady downward trend.

However, a recent announcement seems to have reversed this course. Its share price is now up 1.2% in 2024.. So, what was this game-changing news?

Let's find out what sparked this turnaround for Apollo Micro Systems and boosted investor confidence.

Significant Order Win

On 12 July 2024, Apollo Micro Systems announced it was shortlisted for a Make II project by the Indian Army.

This project involves the procurement of a vehicle mounted counter swarm drone system (VMCSDS) (Version I) under the Make II category of DAP-2020. It is the company's first Make II project and is considered very prestigious.

The systems developed for this project are state-of-the-art and highly futuristic. There is no cost obligation involved for the company in this project.

The Directorate General of AAD, IHQ of MOD (Army), awarded the contract. The nature of the contract is categorized under Make II of DAP-2020, and the order is to be executed within 85 weeks for single-stage composite trials and staff evaluation.

This order boosts the company's share price by increasing investor confidence. It highlights the company's capability and potential for future growth in defense technology.

Apart from the big order, the company was also under focused as it announced that it has converted some share warrants into shares.

Conversion of Share Warrants into Equity Shares

On 16 July 2024, the company announced listing of further issue of shares on preferential basis pursuant to conversion of warrants.

Trading approval for 7.6 million (m) equity shares of Re 1 each, was granted by the National Stock Exchange of India (NSE) and BSE (BSE) on 16 July 2024. Such share warrants were issued and allotted on a preferential issue basis to non-promoters.

These share warrants which are now converted to equity shares are listed and available for trading on the Exchange from 18 July 2024. Details are as follows:

• 2.1 m shares (distinctive numbers 298864861 to 301024860) are locked in until 30 January 2026.
• 5.4 m shares (distinctive numbers 301024861 to 306489560) are locked in until 30 January 2025.

What Next?

Apollo Micro Systems is set for continued growth following its strong performance in FY24. The company's revenue and profit have seen significant increases, driven by robust order execution and increased operational scale. This positive momentum is expected to carry forward into FY25.

Its order book is strong, with many contracts moving from development to production. This shift provides greater visibility for future revenue growth.

The company continues to focus on developing innovative defense solutions with significant export potential. Participation in Make-II defense projects and potential collaborations for larger platforms will further support this growth.

The company is expanding its manufacturing capabilities with the development of new facilities, including the Integrated Plant for Ingenious Defense Systems (IPiDS) in Hyderabad. This plant will enhance its capabilities in missile and unmanned systems development. The additional facilities under development will significantly boost production capacity to meet growing demand.

The company is well-positioned to capitalize on the increasing demand for defense exports, particularly in the Middle East. With continuous investment in manufacturing, manpower, and technological capabilities, it aims to seize these emerging opportunities.

Looking ahead, the company expects revenue to grow by 25% in FY25, driven by new defense contracts and increased production capacity. In FY25 EBITDA margins are anticipated to be between 22% and 24%.

The order book is expected to grow with recent defense orders, ensuring a steady stream of future revenue. Additionally, its subsidiary, Apollo Defence Industries, is exploring potential acquisitions to further strengthen its market position.

The company remains committed to innovation and excellence, with a focus on creating value for its employees, customers, and shareholders. It is confident in its ability to contribute to India's self-reliance in defense technologies and achieve continued success.

How Apollo Micro Systems Share Price has Performed Recently

In the past five days, Apollo Micro Systems share price has rallied 14.3%. In the last month, it is up 11.1%.

In 2024, so far, its share price is up 1.2%. Additionally, the stock has rallied 97.2% in the last one year.

The stock touched its 52-week high of Rs 304 on 20 November 2023 and a 52-week low of Rs 52.1 on 06 November 2023.

About Apollo Micro Systems

Apollo Micro Systems was established in 1985. It is pioneer in design, development and assembly of custom built electronics and electro-mechanical solutions.

It offers solutions based on state of the art technologies for aerospace defense and space as primary customers and also caters solutions for railways, automotive and home land security markets.

Its wide spectrum of technological solutions and end to end design, assembly & testing capabilities gives the company edge over the competition.

For more details about the company, you can have a look at Apollo Micro Systems factsheet and quarterly results on our website.

For a sector overview, read our engineering sector report.

You can also compare Apollo Micro Systems with its peers.

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And to know what's moving the Indian stock markets today, check out the most recent share market updates here.

Happy Investing

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...