Any current/future capex/capital investment/strategic investment?

The company is undergoing significant capital expenditure (capex) in a major expansion. Unit 3 facility is expected to start occupation from October, with operational listing targeted by December. Phase two of the capex has already started and is progressing smoothly as per schedule, with no delays reported. The ongoing capex aims to support increased production capacity and improve working capital efficiency, targeting a reduction of 100 to 120 days in the working capital cycle from FY27 onwards. Consultants including ex-DRDO senior scientists have been appointed to aid in technology

Future growth expectations in sales/revenue/volumes?

The company expects revenue to grow at a CAGR of 45% to 50% over FY26 and FY27, driven solely by its core business excluding recent acquisitions. Growth is supported by a healthy order book and multiple products entering the production phase. Broadly, similar to defense PSUs' past 30%+ CAGR growth due to Atmanirbhar initiatives, the private sector defense companies foresee comparable growth, albeit with joint execution alongside PSUs. By December, significant new orders (potentially worth INR2,00,000 crores across various programs) are expected to be released by the Ministry of Defense. Op

Future growth expectations in earnings/operating earnings/profits/EPS?

Revenue expected to grow at a CAGR of 45% to 50% over FY26 and FY27 driven by core business and new products entering production phase. Operating margin to improve in the first half of FY26 due to better operating leverage and product mix. Margin expansion to moderate in latter half of FY26 and into FY27 due to ongoing capex. From FY28 onwards, margins expected to expand further as systems enter core production and facility utilization improves. PAT margin improved to 13% in Q1 FY26 from 9% in Q1 FY25, indicating strong margin trajectory. Promoter is cautious on making specific quant

Current/ Expected Orderbook/ Pending Orders?

Current order book stands at around INR 735 crores as of the latest update. Expecting significant orders from defense programs like QRSAM, MIGM, Akash-NG, and others. Ministry of Defense projected INR 2,00,000 crores worth of orders to be released in the next six months. Orders likely to be shared between public sector units and private players, including Apollo. Specific large orders such as QRSAM expected before December; BDL expected to place orders to vendors soon after. MIGM order expected within the financial year but exact timeline and quantum not finalized yet. Orders for components in

Apollo Micro Systems LtdQ2 FY26Aerospace & Defense

Apollo Micro Systems Ltd Q2 FY26 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹390P/E: 131.3Market Cap: ₹14.8K CrSector: Aerospace & Defense

Management growth scorecard

Revenue

N/A

Margin

N/A

Fundraise

N/A

Order

N/A

Capex

N/A

0 of 0 growth signals are positive — mixed outlook.

Full analysis

Revenue guidance

→The company expects revenue to grow at a CAGR of 45% to 50% over FY26 and FY27, driven solely by its core business excluding recent acquisitions.
→Growth is supported by a healthy order book and multiple products entering the production phase.
→Broadly, similar to defense PSUs' past 30%+ CAGR growth due to Atmanirbhar initiatives, the private sector defense companies foresee comparable growth, albeit with joint execution alongside PSUs.
→By December, significant new orders (potentially worth INR2,00,000 crores across various programs) are expected to be released by the Ministry of Defense.
→Operating margins are projected to expand starting FY26 due to production ramp-up, despite some moderation in later FY26 and FY27 due to ongoing capex.
→From FY27 onwards, working capital cycle days are expected to reduce by 100 to 120 days, enhancing liquidity and operational efficiency.

Margin guidance

→Revenue expected to grow at a CAGR of 45% to 50% over FY26 and FY27 driven by core business and new products entering production phase.
→Operating margin to improve in the first half of FY26 due to better operating leverage and product mix.
→Margin expansion to moderate in latter half of FY26 and into FY27 due to ongoing capex.
→From FY28 onwards, margins expected to expand further as systems enter core production and facility utilization improves.
→PAT margin improved to 13% in Q1 FY26 from 9% in Q1 FY25, indicating strong margin trajectory.
→Promoter is cautious on making specific quantifications beyond FY27 but indicates steady growth in margins and profitability thereafter.
→Working capital cycle expected to reduce by 100-120 days from FY27, improving cash flow and operational efficiency.

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Fundraise plans

No information is provided regarding the same in the latest conference call.

Order book

→Current order book stands at around INR 735 crores as of the latest update.
→Expecting significant orders from defense programs like QRSAM, MIGM, Akash-NG, and others.
→Ministry of Defense projected INR 2,00,000 crores worth of orders to be released in the next six months.
→Orders likely to be shared between public sector units and private players, including Apollo.
→Specific large orders such as QRSAM expected before December; BDL expected to place orders to vendors soon after.
→MIGM order expected within the financial year but exact timeline and quantum not finalized yet.
→Orders for components in programs like MPATGM are pending and expected before September.
→Emergency procurement and naval sector orders also anticipated to contribute to the pipeline.
→The company is actively participating in multiple missile and mine programs, with expected large-scale order inflows in the near term.

Capex plans

→The company is undergoing significant capital expenditure (capex) in a major expansion.
→Unit 3 facility is expected to start occupation from October, with operational listing targeted by December.
→Phase two of the capex has already started and is progressing smoothly as per schedule, with no delays reported.
→The ongoing capex aims to support increased production capacity and improve working capital efficiency, targeting a reduction of 100 to 120 days in the working capital cycle from FY27 onwards.
→Consultants including ex-DRDO senior scientists have been appointed to aid in technology transfer and operational improvements, particularly related to the IDL acquisition.
→The acquisition and integration of IDL will enable backward integration and expansion into propulsion and warhead capabilities.
→Capex and system production ramp-up are expected to positively impact operating margins from the latter part of FY26 and beyond.

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