Shares of Apollo Micro Systems Limited, a prominent player in the defence and explosives sector, witnessed a sharp uptick on Wednesday, December 31. The multibagger stock rallied nearly 5% following the announcement of significant new orders collectively worth over ₹420 crore, which includes a major contract from a subsidiary of Maharatna public sector undertaking Coal India Limited.
Breaking Down the Major Order Wins
In a regulatory filing to the stock exchanges, Apollo Micro Systems disclosed that its step-down subsidiary, IDL Explosives Limited, has been awarded a substantial Running Contract (RC) valued at ₹419.39 crore. This contract is for the supply of bulk explosives to various subsidiaries of Coal India Limited, a giant in the Indian coal sector.
Additionally, IDL Explosives secured an export order worth ₹1.5 crore for supplying cartridge explosives to an international client. The company stated that the cumulative value of these orders amounts to ₹4208.96 million (₹420.896 crore). This development comes close on the heels of another order win announced just last week.
On December 26, the company had revealed an order worth ₹100.25 crore from a private entity. This order involves the supply of Unmanned Aerial Systems (UAS) destined for the Ministry of Defence, further cementing Apollo Micro's role in India's defence modernization efforts.
Strengthening a Robust Order Pipeline
These consecutive order wins significantly bolster Apollo Micro Systems' already impressive project pipeline. At the close of the September quarter, the company's total order book stood at a formidable ₹7,850 crore. Analysts view a strong order book as a critical indicator of future revenue visibility and earnings stability, which in turn fuels investor confidence.
The company's financial performance has been equally robust. For the second quarter of the fiscal year, Apollo Micro Systems reported a 40% year-on-year surge in revenue to ₹2,253 crore. Its profit growth was even more spectacular, jumping 91% to ₹300 crore compared to the same period last year.
Stock Performance and Market Reaction
The market reaction to the new orders was immediately positive. On the BSE, Apollo Micro Systems' share price climbed nearly 5% to hit an intraday high of ₹272.50 per share. This rally helped the stock snap a two-day losing streak.
Prior to that brief dip, the defence stock had been on a sustained upward trajectory, gaining for six consecutive sessions—a run that likely prompted some investors to book profits. The stock's performance in 2024 has been nothing short of extraordinary, reflecting the broader bullish sentiment around defence sector stocks.
On a year-to-date (YTD) basis, Apollo Micro Systems has delivered multibagger returns, soaring 124%. Over a one-year period, the gains are even more impressive at 134%. The long-term wealth creation for investors is staggering, with the small-cap stock registering an astronomical 2079% rise over the past five years.
The latest orders from Coal India and for defence purposes underscore the company's diversified growth drivers, spanning both the industrial explosives and high-tech defence manufacturing sectors. This dual engine of growth continues to attract significant investor interest, positioning Apollo Micro Systems as a key stock to watch in the evolving Indian defence and infrastructure landscape.
