1. At a Glance
Apollo Micro Systems (AMS) Q1 FY26 net profit jumped 126% YoY to ₹19 Cr on revenue of ₹134 Cr. The stock trades at a nosebleed P/E of 81.5 – apparently, the market thinks every PCB they solder is made of gold.
2. Introduction
Imagine a startup geek who builds drones in a garage, but now supplies systems to DRDO. That’s AMS. Over 700 onboard technologies, 150 indigenous programs, and a stock price that thinks it’s HAL’s cousin.
3. Business Model – WTF Do They Even Do?
- Segments: Electronic manufacturing, embedded software, electro-mechanical systems.
- Clients: Defence, aerospace, homeland security.
- USP: Indigenous solutions under “Make in India” but with working capital cycles that make banks sweat.
4. Financials Overview
- Q1 FY26 Revenue: ₹134 Cr (+46% YoY)
- PAT: ₹19 Cr (+126% YoY)
- OPM: 31% (defence margins flexing)
Verdict: Strong growth, but receivables at 155 days say “collecting cash is harder than making missiles.”
5. Valuation – What’s This Stock Worth?
- Current P/E: 81x (investors clearly see HAL 2.0)
- Fair Value Range: ₹140 – ₹200
Punchline: Priced like a stealth jet – you don’t see the risks until it’s too late.
6. What-If Scenarios
- Bull Case: Big defence orders + PLI benefits → ₹220.
- Bear Case: Delay in payments + promoter pledges bite → ₹120.
- Base Case: ₹160–₹180 remains grounded reality.
7. What’s Cooking (SWOT Analysis)
Strengths: Strong defence pipeline, indigenous tech, fat margins.
Weakness: Promoter pledge (38.6%), high debtors, low ROE.
Opportunities: Rising defence capex, export potential.
Threats: Regulatory delays, receivables turning into “neverables.”
8. Balance Sheet 💰
| Particulars (Mar’25) | Amount (₹ Cr) |
|---|---|
| Equity Capital | 31 |
| Reserves | 578 |
| Borrowings | 295 |
| Total Liabilities | 1,262 |
| Comment: Liabilities growing faster than a TikTok trend. |
9. Cash Flow (FY23–FY25)
| Year | CFO (₹ Cr) | CFI (₹ Cr) | CFF (₹ Cr) |
|---|---|---|---|
| FY23 | -16 | -35 | 51 |
| FY24 | -80 | -57 | 138 |
| FY25 | 12 | -98 | 87 |
| Snark: CFO has mood swings – sometimes cash in, sometimes cash out like a bad relationship. |
10. Ratios – Sexy or Stressy?
| Metric | Value |
|---|---|
| ROE | 10.2% |
| ROCE | 14.5% |
| D/E | 0.5x |
| PAT Margin | 14% |
| P/E | 81x |
| Punchline: ROE is “meh”, P/E is “whoa”. |
11. P&L Breakdown – Show Me the Money
| Year | Revenue (₹ Cr) | EBITDA (₹ Cr) | PAT (₹ Cr) |
|---|---|---|---|
| FY23 | 298 | 64 | 19 |
| FY24 | 372 | 84 | 32 |
| FY25 | 562 | 129 | 57 |
| TTM | 604 | 148 | 68 |
| Comment: Topline rockets, but profits are still in small-satellite orbit. |
12. Peer Comparison
| Company | Rev (₹ Cr) | PAT (₹ Cr) | P/E |
|---|---|---|---|
| HAL | 30,981 | 8,360 | 36 |
| Bharat Electronics | 23,965 | 5,499 | 52 |
| Data Patterns | 708 | 215 | 67 |
| Apollo Micro Sys | 604 | 68 | 81 |
| Peer check: AMS trades richer than its bigger brothers – small size, big ego. |
13. EduInvesting Verdict™
Apollo Micro Systems is the scrappy defence player with stellar growth but messy finances. If they can fix working capital and reduce pledges, the stock might actually earn its lofty multiple. Until then, it’s a high-flying drone – exciting but risky.
Written by EduInvesting Team | 28 July 2025
Tags: Apollo Micro Systems, Defence Electronics, Q1 FY26 Results, EduInvesting Premium
