Apollo Micro Systems Ltd (AMSL) has secured fresh defence orders valued at over ₹100 crore for the supply of unmanned aerial systems.

The company disclosed in an exchange filing on 26 December 2025 that these orders, amounting precisely to ₹100.247 crore or ₹1,002.47 million, come from a private entity with delivery directed to the Ministry of Defence.

Execution of the contract must occur within a tight four-month window, underscoring the urgency of such defence procurements.

This development bolsters AMSL's standing in India's burgeoning defence electronics sector, where demand for indigenous unmanned aerial systems continues to surge amid self-reliance initiatives. 

Unmanned aerial systems, critical for surveillance, reconnaissance, and tactical operations, align with the company's expertise in aerospace and defence technologies. AMSL, a small-cap firm incorporated in 1997 and based in Hyderabad, already provides solutions across infrastructure, transportation, and defence domains.

Financially, the news arrives as AMSL demonstrates robust growth. For the fiscal year ending March 2025, consolidated revenue reached ₹564.95 crore, reflecting a 51.28% year-on-year increase that outpaced its three-year CAGR of 31.93%. Profit after tax climbed to ₹56.40 crore, up 81.23%, with net profit margins at 10.03%.

Such performance has propelled the share price, which traded at ₹285 on recent data, boasting a one-year return of 206.78% and a five-year surge of 2449.2%.

The order book expansion follows earlier wins, including ₹34.09 crore in November 2025 from DRDO (₹11.01 crore), a defence PSU (₹22.57 crore), and private firms (₹0.51 crore).

These contracts highlight AMSL's reliability in delivering advanced electronics for military applications. Peer comparisons reveal competitive positioning, though its PE ratio of 116.53 and PB ratio of 15.44 indicate premium valuations typical of high-growth defence plays.

Market reaction to the announcement propelled shares up around 5%, reflecting investor optimism in defence stocks amid India's modernisation drive. Key metrics like a beta of 1.78 signal volatility, yet ROE has risen consistently to 9.29% over five years, with reserves bolstered by retained profits. Employee costs stood at 3.91% and interest expenses at 6.09% of operating revenues for FY25, manageable amid low debt-to-equity of 0.55.

Challenges persist, notably operating cash flow of ₹10.24 crore lagging PAT, at just 0.18 times, which may raise liquidity concerns despite positive net cash flow of ₹40.07 crore. Investing activities consumed ₹91.29 crore, up 55% year-on-year, likely funding capacity expansion. Mutual fund holdings, such as LIC MF Flexi Cap at 4.07% of AUM, signal institutional interest.

In the broader context, AMSL ranks seventh by sectoral market cap at ₹9,565.73 crore, trailing peers like Genus Power but excelling in long-term returns. Dividend yield remains modest at 0.09%, with a recent 25% final payout. As execution progresses, this order could enhance quarterly results, with recent figures showing September 2025 PAT at ₹31.11 crore on ₹226.57 crore income.

Overall, the ₹100 crore-plus order reinforces AMSL's trajectory in unmanned systems, vital for India's strategic edge in South Asia's volatile geopolitics. Investors should monitor delivery timelines and cash conversion, given defence sector peculiarities like long gestation periods and order-dependent revenues.

Based On PTI Report



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