Detailed Narrative
Strong Q3 FY26 Performance and 9M Growth
Apollo Micro Systems reported its highest-ever quarterly and nine-month revenue. For Q3 FY26, revenue surged by 70% YoY to INR 252 crores, with EBITDA (excluding other income) growing 33% YoY to INR 50 crores, and PAT increasing 25% YoY to INR 23 crores. The nine-month performance for FY26 also showed robust growth, with revenue at INR 611 crores (up 53% YoY) and PAT at INR 71 crores (up 67% YoY), demonstrating consistent execution and operational discipline.
Strategic Evolution and Order Book Strength
The company is transitioning from a subsystem manufacturer to a full-fledged weapon system manufacturer, aiming to become a multidisciplinary defense system powerhouse. The consolidated order book stood at INR 1,305 crores as of December 31, 2025, with INR 500 crores attributed to IDL Explosives and INR 800 crores to standalone operations. Key projects like QRSAM, Akash NG, and various naval and missile programs, including a potential INR 2,500 crores MOORED Mine order awaiting DAC approval, underpin future growth.
Aggressive Capex and Acquisition Strategy
Apollo Micro Systems is undertaking significant capital expenditure to expand its capabilities. This includes a INR 150 crores outlay for Phase 3 at Hardware Park, partly commissioned, and plans for another INR 100-150 crores for expansion on 5 acres allotted by the Telangana Government. The company is also actively pursuing acquisitions, with an additional acquisition by ADIPL expected to close before the financial year-end, and 1-2 more companies from a pipeline of three targeted for acquisition to enhance its market presence.
R&D Investment and Operational Efficiency
R&D remains a core focus, with 9-10% of outlay allocated for R&D in subsequent years, supported by a INR 75 crores term loan. The company has allocated INR 100 crores for R&D, with INR 50-60 crores to be spent in the near future. Operational efficiency is being enhanced through SAP implementation, automation to Industry 4.0 standards across factories, and micro-level monitoring of manpower and machinery utilization across its expanding facilities.
IDL Explosives Integration and Profitability Outlook
The acquisition of IDL Explosives is strategic, aiming to enable the production of defense-grade explosives and support backward/forward integration. While IDL contributed INR 50.8 crores to Q3 revenue (for 45 days) and incurred a INR 4 crores loss, it is expected to achieve EBITDA break-even this quarter and become PAT/EBITDA positive from Q1 FY27. This integration is anticipated to improve consolidated margins in the long term, despite a short-term dip.