Shares of Apollo Micro Systems, a multibagger defence sector stock, continued their upward trajectory for the third consecutive session on Monday, December 22. The stock surged to hit the 5% upper circuit limit, reaching a price of ₹249.80 per share. This marks the second straight session where the stock hit its upper price band, reflecting a significant improvement in investor sentiment.
DRDO Technology Transfer Boosts Defence Capabilities
The rally was triggered by a major strategic development announced by the company. In a regulatory filing, Apollo Micro Systems revealed it has received critical approvals from the Defence Research & Development Organisation (DRDO) for two distinct Transfers of Technology (ToT). The technologies pertain to Laser-Based Directed Energy Weapon (DEW) systems and the EO Tracking System for DEW, subject to the fulfilment of prescribed conditions.
The company stated that these transfers significantly bolster its capabilities in directed energy weapon subsystems. This includes advanced laser-based engagement systems and electro-optical tracking solutions. The development is strategically aligned with India's national objectives of defence indigenisation and the Atmanirbhar Bharat (self-reliant India) initiative.
Strategic Importance and Leadership Commentary
Directed Energy Weapons represent a frontier in modern warfare. Unlike traditional weapons that rely on kinetic impact, DEWs use concentrated high-powered lasers to heat, destroy, or disable targets. This technology is considered crucial for next-generation defence systems.
Commenting on this milestone, Karunakar Reddy, Managing Director of Apollo Micro Systems, said, "The Directed Energy Weapon technologies received through these Transfers of Technology will serve as an additional capability, complementing our ongoing development efforts. This is particularly important in view of the rapidly evolving threat landscape posed by aerial systems."
The company is already actively involved in developing critical anti-drone systems for the Indian Armed Forces under the 'Make' category. Its portfolio includes both soft-kill and hard-kill solutions, such as rocket-based interceptors, designed to counter swarm drone threats.
Expansion into Defence Explosives Manufacturing
In another significant development last week, the company announced that its step-down subsidiary, IDL Explosives Limited, has been granted a 15-year Industrial License for manufacturing high-energy defence explosives. Issued under the IDR Act, 1951, this license marks a major strategic expansion for the Apollo Micro Systems group into the specialized domain of defence materials manufacturing.
Despite the recent positive momentum, the stock has experienced volatility. Since October, the share price faced severe selling pressure, shedding about 30% of its value, in line with the weak sentiment surrounding mid- and small-cap stocks.
However, the long-term performance of Apollo Micro Systems remains exceptionally strong. Even after the recent correction, the stock is trading 165% higher compared to its price one year ago. Over a five-year horizon, the returns are staggering, with the stock up by an impressive 2,060%, solidifying its status as a multibagger for long-term investors.
Disclaimer: Investors are advised to consult certified financial experts before making any investment decisions.
