PSU Missile stock with ₹2,500 Cr orderbook guidance by December 2025 to keep on your radar

During Friday’s trading session, the shares of a pioneer in design, development, assembly and testing of electronic and electro-mechanical solutions surged by around 3.4 percent on BSE. The company’s management expects the order book to reach Rs. 2,500 crores from Rs. 500-550 crores, along with announcing the greenfield expansion plans, along with margin guidance and more. Here’s a look at it:

Price Movement

With a market capitalisation of Rs. 3,759 crores, the shares of Apollo Micro Systems Limited closed in the red at Rs. 122.65, down by around 1 percent, as against its previous closing price of Rs. 123.85.  The stock has delivered positive returns of nearly 29 percent over a one-year period, as well as around 9 percent returns in the last one

Greenfield Expansion

The company’s Unit 2, a 40,000 Sq.ft facility located in Adibatla, Hyderabad, is ready, with operations expected to commence from Q1 FY26. Meanwhile, the construction of Unit 3, a 350,000 Sq.ft facility in Hardware Park II, Hyderabad, is currently in progress, with completion expected by Q2 FY26. 

As part of its backward integration strategy, AMS has initiated the construction of its Integrated Plant for Ingenious Defence Systems (IPiDS), which is expected to be completed by the end of FY25. Once operational, this facility will significantly enhance the company’s production capacity and strengthen its position as a leading Tier-1 OEM manufacturer, enabling it to scale up production and better cater to the growing demand.

Management Guidance

The company’s current order book is valued at Rs. 500-Rs. 550 crores, primarily from the missile and naval defence sectors. Management aims to increase the order book to a minimum of Rs. 2,500 crores by December 2025. Significant contributions are expected from upcoming programs in artillery, bomb systems, and naval torpedo systems. 

EBITDA margins currently range between 25 percent and 30 percent, with expectations for improvement as production orders increase. At present, 70 percent-75 percent of the orders are development-focused, with the goal of shifting towards a more production-oriented mix (expected to be 60 percent-40 percent for FY26).

The management also stated that, from a revenue perspective, the company had previously communicated an internal target to double its revenues. However, as a guidance point, they plan to continue increasing revenue by 45 percent to 50 percent.

Also read: Green energy stock jumps over 4% after receiving order for supply of transmission line material

Strategic Partnerships & R&D Investments

The company recently entered into a consortium agreement with Redon Systems Private Limited to manufacture Loitering Munition. Additionally, an MoU was signed with Garden Reach Shipbuilders and Engineers Limited for joint R&D, co-production and export of underwater weapons and vehicles.

The company consistently invests 7% to 8% of its revenue in R&D annually, with plans to increase this investment in line with product development requirements.  Additionally, joint development MoUs have been signed with Bharat Dynamics Limited and GRSE to advance technology development and expand access to deeper markets.

Financial Performance & Ratios

Apollo Micro Systems experienced significant growth in its revenue from operations, showing a year-on-year rise of around 62.5 percent from Rs. 91.3 crores in Q3 FY24 to Rs. 148.4 crores in Q3 FY25.

Similarly, its net profit increased during the same period from Rs. 9.96 crores to Rs. 18.2 crores, indicating an impressive rise of around 83 percent YoY. In terms of key financial metrics, AMS has a Return on Equity (RoE) of 6.9 percent and a return on capital employed (RoCE) of 11.8 percent, with a debt-to-equity ratio of 0.37.

About the Company

Incorporated in 1985, Apollo Micro Systems Limited (AMS) is mainly engaged in the supply of electronics and electro-mechanical systems and components including the design, research & development of systems which are used in missile programmes (weapon systems electronics), underwater missile programmes (weapon systems electronics), avionic systems, ship-borne systems, submarine systems, etc.

The company offers product-based solutions within aerospace systems, including on-board electronic weapon systems and ground support equipment for missile systems, catering to the Missile Defence sector.

AMS has issued Equity Shares and Equity Warrants on a preferential basis, totaling up to Rs. 816 crores. The funds will be used to meet working capital needs, fund R&D expenses for future technological innovations, invest in subsidiaries, and cover general corporate expenses.

Written by Shivani singh

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