Apollo Micro Systems Shares Rally 8%; Delivers Its Strongest Year As PAT Doubles to ₹107 Cr

Synopsis: Backed by a 61 percent jump in consolidated revenue to Rs. 904 crore and a near-doubling of net profit to Rs. 107 crore, Apollo Micro Systems delivered its strongest full-year performance in FY26  a result that now consolidates IDL Explosives Limited as a step-down subsidiary, absorbs a ₹107 crore acquisition, and carries Rs. 1,430 crore of pending capex on the balance sheet, all while issuing Rs. 432 crore worth of share warrants to fund the next leg of growth.

A Hyderabad-based defence electronics company just closed its best financial year on record, and the numbers tell a story that goes well beyond the top-line headline. The board met on May 18, 2026 approving consolidated results that reflect both a sharp revenue acceleration and the first full quarter of consolidation from IDL Explosives, a company acquired in November 2025 for Rs. 10,700 lakhs by subsidiary Apollo Defence Industries Private Limited.

With a market capitalization of Rs. 11,433.36 crore, the shares of Apollo Micro Systems Limited were trading at Rs. 320 per share, up 8.64 percent from its previous closing price of Rs. 294.55 apiece. It is trading at a P/E of 124.47.

Consolidated revenue from operations grew 61 percent year-on-year to Rs. 904.38 crore in FY26, from Rs. 562.07 crore in FY25. This is a meaningful acceleration: the company had taken multiple years to cross Rs. 500 crore, and has now added over Rs. 340 crore in a single year. Consolidated profit after tax came in at Rs. 107.38 crore for FY26, up 90 percent from Rs. 56.36 crore in FY25. Net profit attributable to owners of the company was Rs. 112.92 crore; the negative non-controlling interest contribution of Rs. 5.54 crore reflects losses at the subsidiary level, likely from IDL Explosives’ integration costs and operating ramp.

On a quarterly basis, Q4 FY26 consolidated revenue reached Rs. 293.26 crore  against Rs. 161.77 crore in Q4 FY25  an 81 percent year-on-year jump that signals the business is running significantly hotter entering FY27. Q4 consolidated PAT was Rs. 36.79 crore. The annualised consolidated basic EPS for FY26 stands at Rs. 3.18 per share (face value Rs. 1), against Rs. 1.86 in FY25  a 71 percent improvement.

Operating profitability held well through the year, with consolidated operating profit margins trending between 20 and 31 percent across quarters. Finance costs at Rs. 47.32 crore for FY26 reflect the higher borrowing base, while depreciation and amortisation expanded to Rs. 22.32 crore, partly from IDL Explosives’ asset base being absorbed into the group.

The most consequential structural change in FY26 was the consolidation of IDL Explosives Limited as a step-down subsidiary. Apollo Defence Industries Private Limited, a wholly-owned subsidiary of Apollo Micro Systems, completed the acquisition of 100 percent stake in IDL Explosives on November 15, 2025, for a total consideration of Rs. 10,700 lakhs. IDL has been included in the consolidated accounts from the date of acquisition. The purchase price allocation under Ind AS 103 was preliminary as at March 31, 2026, meaning goodwill on consolidation of Rs. 145.20 crore  a significant line on the balance sheet may be revised once the final PPA is completed.

The auditors, S.T. Mohite & Co., note that IDL Explosives was audited by a separate statutory auditor, and the consolidated opinion on IDL’s financials is therefore based on that other auditor’s report. IDL’s standalone numbers as included in the consolidated statement show total assets of Rs. 238.46 crore, total revenues of Rs. 379.80 crore for FY26, net profit after tax of Rs. 1.50 crore for Q4, and a net loss of Rs. 30.64 crore for the full year.

The acquisition thus adds significant revenue scale to the group but also imports a loss-making entity, which explains the negative NCI in the consolidated P&L. Management will need to demonstrate a path to IDL profitability before the strategic rationale fully translates into shareholder value.

The consolidated group comprises Apollo Micro Systems (parent), Annanya SIP RF Technologies Private Limited (51 percent subsidiary), Apollo Defence Industries Private Limited (wholly-owned), Apollo Strategic Technologies Private Limited (step-down subsidiary), and IDL Explosives Limited (step-down subsidiary via Apollo Defence Industries).

Balance Sheet and Capital Allocation

Consolidated total assets grew to Rs. 2,368.51 crore from Rs. 1,299.49 crore in FY25, an 82 percent expansion in a single year, driven by the IDL consolidation, organic working capital growth, and aggressive capex. Capital work-in-progress on the consolidated balance sheet stood at Rs. 196.29 crore as at March 31, 2026, against Rs. 72.28 crore a year ago, indicating substantial ongoing capacity investments. Property, plant and equipment grew from Rs. 172.27 crore to Rs. 315.26 crore.

Inventories increased to Rs. 795.29 crore from Rs. 600.64 crore, and trade receivables rose to Rs. 481.32 crore from Rs. 238.33 crore. At Rs. 481 crore in receivables against Rs. 904 crore in annual revenue, debtor days are elevated  broadly consistent with Screener’s flag of approximately 155 days, a number that is structurally common in defence contracting where milestone-based payment cycles are long, but one that demands monitoring as revenue scales further.

Consolidated current borrowings stood at Rs. 412.79 crore, up from Rs. 260.64 crore, and non-current borrowings at Rs. 119.62 crore, against Rs. 70.13 crore. Total debt on a consolidated basis is approximately Rs. 533 crore. Cash and cash equivalents on the consolidated balance sheet improved markedly to Rs. 89.50 crore from Rs. 40.27 crore, aided by the large financing inflows from warrants and equity issuance.

Dividend and Management Changes

The board has recommended a final dividend of Re. 0.25 per equity share (face value Rs. 1) for FY26, subject to shareholder approval at the AGM. At the current share price, this implies a dividend yield of approximately 0.09 percent  a token payout, but a first formal dividend recommendation that signals the board’s confidence in the sustainability of profitability. Company Secretary and Compliance Officer Ms. Rukhya Parveen has resigned effective May 31, 2026.

Her replacement, Mr. G. Seshadri Vasan, takes charge from June 1, 2026  a seamless handover with no compliance gap, in contrast to the situation at peer companies where KMP vacancies create transition risk. Cost auditors M/s G H Reddy & Associates and internal auditors M/s E Sateesh Reddy & Associates have both been re-appointed for FY27.

Business Overview

Incorporated in 1997 and listed on BSE and NSE, Apollo Micro Systems Limited designs, develops, assembles, and tests electronic and electromechanical solutions for India’s defence sector, covering missile systems, naval systems, avionics, satellite and space systems, and homeland security applications. The company participates in 150-plus indigenous defence programs and 60 DcPP programs as a sub-system partner.

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