Apollo Micro Systems Eyes Up To 45% Annual Growth After Robust Q3 Results

Hyderabad-based Apollo Micro Systems is expecting a strong growth trajectory driven by steady domestic order inflows and global expansion. The company is hopeful of a 40–45% annual growth rate, maintaining momentum after a record rise in net profit in the December quarter.

The defence solutions provider has also set internal targets to double its revenue in the near future, according to its director, Addepalli Krishna Sai Kumar.

Speaking to NDTV Profit, Sai Kumar said, “…We will be growing at a 40% to 45% rate every year. As you have seen in our Q3 results, this was the highest-ever Q3 performance in the company’s history. So, this growth momentum will continue.”

Apollo Micro Systems reported an 83% year-on-year increase in consolidated profit after tax to Rs 18.24 crore for the December quarter, up from Rs 9.96 crore in the year-ago period. Total income surged 62%, reaching Rs 149.37 crore in the third quarter compared to Rs 91.84 crore in the October-December quarter of the financial year ending March 2024.

When asked about the current order book and the expectation to reach the Rs 2,500-crore target by December 2025, Kumar said that the growth rate will hover around 45% while the exact figures may differ marginally.

“As a tier-two and tier-three supplier to many original equipment manufacturers, or OEMs, including private and public sector companies and DRDO, the company continues to receive orders, particularly for large-ticket missile and naval defence projects,” he noted.

He further said that currently, the company is focused on domestic orders, but international business expansion is underway. According to Kumar’s projections, in the next financial year, the company will be able to "clock a decent order book for the export market as well, which may be executed in Q3 or Q4 of next financial year.”

The company’s current manufacturing plant in Hyderabad spans 55,000 sqft. It is also expecting a new 350,000-sqft facility in Hyderabad, which will be fully operational in the next few quarters.

“Full capacity utilisation will take some time, likely four to six quarters, but this facility is unique compared to our existing capacities,” he added.

The company has also set up a 45,000 sqft second facility in Telangana, where its teams are expected to be shifted from the first quarter of the next financial year.

Commenting on the company’s balance sheet, Kumar said that the company currently has no long-term debt, but it has taken a term loan for capacity expansion. “The debt will be supplemented by the recent equity we raised and the pending preferential equity approvals. You know, in March, the funds will start flowing,” he added.

Shares of Apollo Micro Systems closed in the red at Rs 115.15 apiece, down 2.65%, on the NSE on Friday. In comparison, benchmark NIFTY50 settled 117.25 points, or 0.51%, lower at 22,795.9.