Multibagger small-cap defense stock Apollo Micro Systems gained 46% in just 10 sessions. What is behind the rally?

Multibagger Defense Stock: shares of Apollo Micro SystemsA small-cap company by market capitalization The Rs 4,000-crore stock has made significant gains on Dalal Street in recent sessions, and has closed with impressive gains every passing day. Shares have risen in the last 10 trading sessions At the current level of Rs 93.32 per share 135.65, resulting in a handsome gain of approximately 46%.

demand for it defense related stocks This has gained momentum on the back of consecutive order wins achieved in recent months. In December, the company received several orders including a price Rs 21.42 crore from Bharat Electronics.

Additionally, during the month, it received orders worth 6.14 crore from Defense Research and Development Organization (DRDO). The company ended the second quarter of the current financial year with new orders. 130.96 crore (as per company’s earnings filing), it is well positioned for future growth and sustainability.

Hyderabad-based Apollo Micro Systems is engaged in the business of electronic, electro-mechanical and engineering design as well as manufacturing and supply. It designs, develops and sells high-performance, mission- and time-critical solutions for the defence, space and homeland security sectors, providing services to the Ministry of Defence, government-controlled public sector undertakings and private customers.

In Q2 FY25, the company achieved strong revenue growth of 84.38% Rs 161 crore as compared to Rs. 87 crore in Q2FY24. For the half year, it recorded overall revenue growth of 73.91% Rs 252 crore as compared to Rs. 148 crore in first half of FY24.

Its PAT increased significantly for Q2 FY25 above 15.7 crores 7 crore in Q2FY24. Notably, PAT witnessed a significant growth of 194.19%, reaching Above Rs 24 crore in the first half of FY 2015 8.2 crore in first half of FY24.

The shares have gained 1016% in the last four years, driven by steady order intake and a steady rise in fundamentals.

Strong momentum likely to continue

India is expected to defense market opportunity Valued at US$90-100 billion over the next 5-6 years, the defense industry is likely to grow at 13 per cent annually from FY14 to FY30.

Historically, India has been heavily dependent on defense imports, resulting in increased costs, delays and technological obsolescence. Over the past twenty years, India’s military has modernized its systems and incorporated advanced weapons and sophisticated weapon systems.

Ranked as the fourth largest defense spender worldwide, India allocated a significant amount of US$74.5 billion (Rs 6,21,540.85 crore) for defense in the 2024-2025 financial year, which is 13.04% of the total Union Budget. % Is part of.

The Positive Indigenization List makes it mandatory for the Indian Armed Forces, which include the Army, Navy and Air Force, to procure listed items from domestic private sector players or DPSUs.

These are exclusively for the defense industry. The Defense Ministry approved five such lists, consisting of 4,666 items, including 98 items valued at more than US$16.8 billion. 1,40,000 crore). This move not only reduces import expenditure from current account but also boosts MSMEs in defense sector.

Disclaimer, The views and recommendations expressed in this article are those of the individual analysts. These do not represent the views of the Mint. We advise investors to check with certified experts before taking any investment decision.