Apollo Micro Systems Limited — Q4 FY26 earnings call

Call held 19 May 2026

Management summary

Apollo Micro Systems delivered a strong Q4 and FY26, marked by record revenues, significant profit growth, and margin expansion. The company highlighted its strategic Vision 2036, substantial R&D investments, and a robust order book of ₹1,432 crores. While organic growth slightly missed internal targets due to project approval delays, management expressed confidence in future growth, driven by large ticket orders, capacity expansion, and the transformation of IDL Explosives.

Highlights

  • Achieved highest ever quarterly and 12-month revenue, demonstrating consistent execution and operational discipline.

  • FY26 consolidated revenue grew 61% YoY to ₹904 crores, with EBITDA up 69% to ₹218 crores and PAT up 91% to ₹107 crores.

  • EBITDA margin expanded by 114 bps to 24% and PAT margin by 185 bps to 12% in FY26.

  • Made the highest investment in R&D, spending ₹72 crores (8% of revenue) in FY26, with zero attrition in the R&D team.

  • Order book of ₹1,432 crores as of March 31, 2026, provides strong visibility for future growth, with expectations of significant increase this financial year.

  • Successful 100% acquisition of IDL Explosives and progress on Unit 3 expansion to support future growth.

Concerns

  • Standalone organic revenue growth for FY26 was 36%, missing the internal guidance of 45-50% due to pending approvals for certain projects.

  • IDL Explosives was loss-making in prior years and is currently undergoing a transformation phase, with margin guidance expected only from Q3 FY27.

  • Promoter pledge was still around 39% at the time of the call, though management committed to bringing it to zero this financial year.

Key financials

2 periods

Q4 FY26

  • Revenue
    ₹293 Cr
    YoY +81%
  • EBITDA
    ₹68 Cr
    YoY +88%
  • PAT
    ₹37 Cr
    YoY +164%

FY26

  • Consolidated Revenue
    ₹904 Cr
    YoY +61%
  • Consolidated EBITDA
    ₹218 Cr
    YoY +69%
  • Consolidated PAT
    ₹107 Cr
    YoY +91%
  • EBITDA Margin
    24%
  • PAT Margin
    12%
  • ROCE
    18.2%
  • ROE
    11.2%
  • Working Capital Cycle
    359 days
  • Standalone PAT Margin
    16%
  • Standalone Organic Revenue Growth
    36%

What they filed

Q1 FY27: revenue up 87.3%, net profit up 38.9% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue161 148 162 134 225 +40%252 +70%293 +81%251 +87%
EBITDA33 38 36 41 59 +79%50 +32%68 +89%54 +32%
Net profit16 18 14 18 30 +88%23 +28%37 +164%25 +39%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Order book

high confidence

Total value

₹1,432 Cr

as of 2026-03-31 quantified

Execution

some orders will be executed this financial year, some will spill over to the next financial year

Management expects large ticket orders to come in this financial year, significantly increasing the order book size on both standalone and consolidated bases.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex ₹72 Cr
    • R&D expenditure (8% of revenue) ₹72 Cr
    • Unit 3 facility expansion (civil work, machinery, testing facilities)
    We made the highest investment in R&D within the industry during FY26 with R&D expenditure amounting to 8% of revenue, which is around INR72 crores in absolute terms.
  • M&A IDL Explosives Acquisition · Closed

    To complement organic growth and strengthen business, enabling full-fledged platforms for the company.

    IDL was loss-making in prior years but is undergoing a transformation phase; management expects significant improvement.

    100% acquisition of IDL Explosives... IDL last year performance stood at around INR380 crores, little less than INR380 crores. So, it will continue to maintain a similar level of performance. So, this is primarily a huge shift of management, which have been there for decades. Now, our outlook towards IDL is totally different.
  • M&A Undisclosed Acquisition · Pending regulatory

    To significantly complement organic growth and overall strengthen the business.

    We are pleased to announce that an additional acquisition by our subsidiary Apollo Defence Industries Private Limited is expected to be completed before end of this financial year, which will significantly complement our organic growth and overall strengthen our business.

Guidance & targets

Revenue

  • Consolidated Revenue Growth Revenue · FY27 and subsequent years · Medium confidence similar or accelerated pace
    we will continue to grow at a similar rate, in this particular financial year and the subsequent financial year backed by the size of the order book that we are going to have.

    — A. Krishna Sai Kumar

Order Book

  • Order Book Size Order Book · this financial year · High confidence significantly increase
    The order book size will increase significantly as we have been telling, and that something, which is going to happen in this financial year.

    — A. Krishna Sai Kumar

Profitability

  • Revenue and Margin Growth Profitability · coming years · Medium confidence similar pace
    We'll continue to grow at similar pace.

    — A. Krishna Sai Kumar

IDL Explosives

  • IDL Revenue Guidance IDL Explosives · from Q3 onwards · Low confidence will be vocal
    I think we will be quite vocal about IDL's revenue guidance and other things from Q3 onwards.

    — A. Krishna Sai Kumar

Promoter Pledge

  • Promoter Pledge Promoter Pledge · this financial year · High confidence zero

    Previously around 39% → zero

    in the last, you know, call, you know, we said that, you know, in the upcoming financial year, we are going to come out of this and we stand by that actually, which is this financial year.

    — A. Krishna Sai Kumar

What to watch in Q1 FY27

IDL Explosives Revenue and Margin Guidance

from Q3 onwards
Current INR 380 crores revenue (last year), loss-making, undergoing transformation
Target Specific revenue and margin guidance

Why it matters

This will provide clarity on the financial contribution and turnaround of the acquired entity, impacting consolidated profitability.

I think we will be quite vocal about IDL's revenue guidance and other things from Q3 onwards.

Risks & concerns

  • Execution delays due to pending approvals

    medium

    Certain projects expected to be executed in Q4 FY26 were delayed due to pending customer approvals, leading to a miss in standalone organic growth guidance.

    Analyst acknowledged

  • IDL Explosives profitability and integration

    medium

    IDL Explosives was loss-making in prior years and is currently undergoing a transformation, which could impact consolidated margins until it becomes profitable.

    Analyst acknowledged

  • Promoter pledge

    low

    Promoter pledge was around 39%, but management committed to bringing it to zero this financial year.

    Analyst acknowledged

Q&A highlights

4 direct, 1 evasive
Order inflows for FY27-28 and future growth sustainability Direct
So primarily, we are expecting a large ticket projects, which we have been quite vocal about for last one year. And the time has come, and the clocking of these large ticket orders are due to come, and anytime in this financial year we would be getting and our order book size also will cumulatively increase both on standalone, as well as on a consolidated basis.

Addresses concerns about sustaining growth beyond the current order book and indicates significant new order wins are imminent.

Asked by Amit Dixit

Financial parameters for Vision 2036 Partial
Regarding the FY36, we just wanted to give a glimpse of what we are trying to do. The more nitty-gritties of that, we will come back to all our investors and we will be start being more vocal about it and how the numbers will culminate and all from time to time.

Management defers specific financial targets for their long-term vision, indicating details will be shared later.

Asked by Amit Dixit

IDL Explosives revenue, utilization, and margins post-acquisition Partial
IDL last year performance stood at around INR380 crores... As of now I'm not able to give any guidance on IDL. It's presently undergoing a transformation phase... I think we will be quite vocal about IDL's revenue guidance and other things from Q3 onwards.

Highlights the current state of IDL Explosives as a company undergoing transformation and the lack of immediate financial guidance, which could impact consolidated margins.

Asked by Darshil Jhaveri

Global demand and supply situation for TNT/HMX and price trends Direct
Globally, the conflicts have been boiling at a highest peak level in last six years. You know, there's a huge depletion of stocks across the world in different various countries... So this brings a lot of opportunity for the explosive companies both in India as well as across the world actually.

Provides context for the strategic importance of the IDL Explosives acquisition and the significant market opportunity in the explosives sector due to global geopolitical events.

Asked by Ayush Agarwal

Revenue potential from new licenses (missiles, ATGMs, torpedoes, mines, aerial bombs) Direct
All variants of mine we have -- you know, two variants of mine, one shallow, one deep water... only these variants of mine alone would be a cumulative, you know, a market, you know, in very immediate market size of something like INR4,000 crores to INR4,500 odd crores...

Quantifies the significant market opportunity for specific product categories enabled by new licenses, indicating substantial future revenue potential.

Asked by Amit Kumar

Standalone organic growth missing guidance of 45-50% (achieved 36%) Direct
Certain projects which we expected to be, you know, executed in the last quarter of, you know, previous financial year, that couldn't happen because of the certain approvals, you know, which got pending actually from our customer, okay, which was still lying... So, that's how, you know, we couldn't meet that, you know, 8%, 9% of guidance, you know, we have just got missed.

Explains the reason for missing organic growth guidance, attributing it to external approval delays rather than internal execution issues, and reaffirms commitment to maintaining momentum.

Asked by Ankush Agarwal

Details on the 'additional acquisition' by Apollo Defence Industries Private Limited Evasive
As of now I'm bound by NDA, I'll not be able to divulge any much detail. In next few I mean to say, you know, before end of this quarter, you'll start getting to hear, you know, more significant news...

Management is unable to provide details on a significant upcoming acquisition, indicating it's a sensitive matter but promises more information soon.

Asked by Shreyansh

3 min read 6 chapters

Detailed narrative

Q4 & FY26 Financial Performance Highlights

Apollo Micro Systems reported its highest ever quarterly and 12-month revenue in FY26. Consolidated revenue for FY26 stood at ₹904 crores, a 61% year-on-year growth from ₹562 crores in FY25. EBITDA (excluding other income) grew by 69% to ₹218 crores, and PAT increased by 91% to ₹107 crores. Margins also saw significant expansion, with EBITDA margin improving by 114 basis points to 24% and PAT margin by 185 basis points to 12% in FY26. Q4 FY26 alone saw revenue surge 81% YoY to ₹293 crores, with EBITDA growing 88% and PAT an exceptional 164% YoY to ₹37 crores.

Strategic Vision 2036 and R&D Focus

The company unveiled a glimpse of its Vision 2036, aiming to become a global OEM in defense platforms across land, air, and sea domains. This vision is supported by four pillars: becoming a global OEM, diversifying revenue streams, deepening presence in Indian and global markets, and driving conviction-led innovation. Apollo Micro Systems made its highest R&D investment in FY26, spending ₹72 crores (8% of revenue) on developing advanced solutions like Mini Torpedoes, fiber optic gyro-based INS systems, and sensor suits for autonomous vehicles. The company also reported zero attrition in its R&D team.

Robust Order Book and Future Growth Outlook

As of March 31, 2026, the consolidated order book stood at ₹1,432 crores, providing strong visibility for future growth. Management anticipates significant new large ticket orders in the current financial year, which will further increase the order book size. The company expects to continue growing at a similar or accelerated pace in the coming years, driven by robust execution and the expanding order book. While some orders will be executed this financial year, others will spill over to the next.

IDL Explosives Acquisition and Transformation

Apollo Micro Systems completed the 100% acquisition of IDL Explosives, which reported revenues of approximately ₹380 crores last year. While IDL was loss-making in previous years, it is currently undergoing a significant transformation phase. Management expects substantial improvements in its operational performance and plans to provide specific revenue and margin guidance for IDL from Q3 onwards. This acquisition is strategic, aiming to support the company's expansion into ammunition and artillery, leveraging global demand driven by conflicts and unoperational plants worldwide.

Capacity Expansion and Operational Efficiency

Progress on Unit 3 expansion is underway, with civil work for phase one completed and phase two ongoing. Machinery has been received, and the company plans to shift operations from Unit 1 to Unit 3 phase-wise. This expansion, along with bringing in-house previously outsourced test facilities, is expected to improve operational efficiency and reduce working capital holding periods. The working capital cycle has already seen a significant improvement, reducing from 626 days in FY21 to 359 days in FY26.

Missed Organic Growth Target and Pending Approvals

The standalone organic revenue growth for FY26 was 36%, falling short of the internal guidance of 45-50%. This miss was attributed to delays in obtaining necessary approvals for certain projects from customers, which prevented their execution in the last quarter of FY26. Management clarified that these are timing-based issues and expressed confidence in bouncing back and maintaining similar momentum in the future.

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