Apollo Micro Systems Receives Indian Army Project for Counter-Swarm Drone System

Apollo Micro Systems’ shares surged by nearly 5% to Rs 109.80 today, after the company announced a project from the Indian Army, which involves the procurement of a Vehicle Mounted Counter Swarm Drone System (VMCSDS) under the Make II category of DAP-2020.

Project Details

The VMCSDS project is Apollo Micro Systems’ first under the Make II category, and as a Make II project, there is no cost obligation for the company. The contract stipulates an 85-week delivery period for single-stage composite trials and staff evaluation.

Financials

Apollo Micro Systems’s Q4FY24 showcased a good performance as the company’s revenue grew by 26.7%, while profits soared by 79.3%. Operating income rose 20.9% quarter-over-quarter and 37.9% year-on-year. The company’s Q4 earnings per share (EPS) increased by a good 256.1% year-on-year, reaching Rs 0.48.

Market Performance

With a market capitalization of Rs.3,281.54 crore, Apollo Micro Systems falls under the SmallCap category. The stock’s 52-week high is Rs 161.70, and its 52-week low is Rs 51.25. Today, the stock hit its upper circuit of 5%, rising to Rs.109.80. The company’s shares have delivered remarkable returns, rising 87% in one year and over 1000% over the past five years.

Growth Outlook

In June this year, the Securities Allotment Committee of the Board of Directors approved the allotment of 76,24,700 equity shares at Re. 1/- each upon the conversion of warrants, generating a total amount of Rs.10,63,64,565 as the warrant exercise price. Looking at FY25, the company’s management forecasts a 25% revenue growth driven by possible opportunities in the defense sector and the government’s focus on boosting domestic defense production capacity. EBITDA margins are expected to be between 22%-24%, supported by the increasing scale of operations.

Conclusion: In conclusion, Apollo Micro Systems’ new project with the Indian Army has highlighted its technological expertise and potential in the defence sector. With Q4FY24 revenue up 26.7% and profits soaring 79.3%, it forecasts a 25% revenue growth in FY25  driven by increased opportunities in this sector as the market cap of the company currently stands at Rs.3,281.54 crore. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.